Tag Archives: gann

KLCI: Profit from the Rebound.

The local bourse started the year pretty badly with 2 consecutive days of dipping. At the close, the composite index had shed by 30+ points in the last 2 days. If we were to include the black candlestick on the last trading day of 2013, that’s a total of about 50 points from high to low. Not a small number. So, is this the beginning of a bear market since our local index had rose for about 3 months starting from 28th of August 2013? A number of analysts especially those from the west have been predicting that a recession will occur in 2013/2014. Gann’s disciple will tell you that 2014 will be a bear market (or at best in consolidation mood) in preparation for a 2 years bull in 2015 and 2016. My opinion? No idea. I will let the weekly chart tell me. As for the near term, I’m very bullish. Let’s take a look at the chart of our composite index.

Stock to Watch: GAB [3255]

The composite index edged higher today with oil and gas counters getting most of the attraction (Perdana, Penergy, Alam, and Dayang). Looking at the current market sentiment, the index is expected to stay strong and will re-test the 1793 resistance level again in days to come.

The focus of today’s discussion would be on GAB [3255], a brewing company which had dipped by more than 20% from it’s highest high in just a month. Investors who kept on adding their position as the share price eased are now worrying that their decision to buy could be a huge mistake. If you fall into this category of people, let me assure you that the share is about to rebound very soon. So don’t fret. As for the others who are looking to take a position… let us look at the chart first.

gab

KLCI: Getting Weaker

Yes. You read the title correctly. W-E-A-K.

While it’s not entirely bearish yet (the index edged only slightly lower today and the losers outnumbered the gainers just marginally, so for some people there’s still HOPE… Hey! It’s time to wake up!) several signals show that the bears are about to launch an aggressive attack on our market in days to come. If you are an active trader, you would have notice that majority of the shares that have rose for the past few days are starting to reverse. Some are even approaching lower support levels already. For shares that still manage to hold up, the momentum is obviously fizzling out. With the smart money booking in their profit since the first trading day of July, there is no way the market is going to move higher, especially when the regional peers are falling. A correction is needed before traders and investors are willing to take fresh position again. Let’s take a look at the chart.

klci (5)

Stocks to Watch: CCM [2879], Tebrau [1589]

The market is extremely bullish today. The index rose by a staggering 17.39 points, with gainers outnumbered the losers by 298 shares. Some of the shares had managed to create new highs (UOADev, Tenaga, Pwroot) and are definitely worth the look as they may continue their rise tomorrow. But let’s not discuss about these shares because despite their possibility of continuing their upward movement tomorrow, the risk-reward ratio will rise slowly as price increases, making any trades in these shares to be increasingly dangerous. We are more interested in finding out shares that have yet to join the hype and are preparing to surge. We shall begin our analysis with CCM [2879].

CCM

Padini [7052]: Ready for a Huge Directional Move

Padini’s year-long uptrend was broken in September and had been on a downtrend since. The wide swings during the downtrend offered a number of opportunities to believers of short-term mean-reversion and experts in candlesticks pattern. The downtrend ended in early December after completing the falling 5-way sequence of the Elliot Wave and it’s share price has been moving sideway since.

Padini
The range which the share price has been trading for the past 3 months is tightening slowly and is converging at around the Fibonacci confluence zone of RM1.82. This is not surprising given that Fibonacci confluence zone, being the price level where multiple Fibonacci ratios align, has always been the level where price equilibrates in the medium term. The price movements of Padini for the past 1 year have successfully form a D-shape, which according to Robin Mesch signals the end of a cycle of market activity and the beginning of a new one. This essentially means that the share price is poised to make a huge directional move and it is expected to happen anytime soon given that price has been moving sideway for 3 months. Such time prediction is in accordance to Gann’s observation that “majority of trends occur in time period of 3 (3 days, 3 weeks or 3 months)”.