Saturday, July 30, 2005

Weekly Analysis

From my charts, it looks like KLSE is heading for a correction. Last few days up was just to dress up the index. Most probably it will stop sliding at 920. Historically, the index should make a 50% correction which puts it at 900.

Many stocks are push and dump. They dun usually survive T+3. Stocks that breaks new grounds (Mems) are too risky to buy as the daily indicator is overbought.

TA is in corrective mode. 3 Aug is the ex-date for the 5% dividend. Will it be push up?
Sumatec - Alamak, bad bet. It is still sliding down. Support at 0.63.
L&G - No clear signal that it will make a move. Better wait for breakout before buying.
FTEC - This is the only light I see. Slowly inching up. 0.245 is the support. Mmm....maybe buy with stop at 0.24. Try my luck.

Wednesday, July 27, 2005

Licking my wounds

Took two hits with my Kejora-WA and Talam-WA this week. These are counters that I'm trying to clear.

Warrants are good instrument to make great profits. The opposite is true also. You may think that you can make good money, so you choose a counter that is 2 years to death. But if your decision is wrong and you do not cut lost, then after 1 year, your warrant can become your expensive toilet paper.

If you want to play with warrants, make it a point of not holding for more than 1 month. If it doesn't move, most probably it won't. And always buy when you are pretty sure that it is a bull counter. You want to make the kill when it is moving and not sitting put. Don't make the mistakes that I have made. My first disaster with warrants was with Kulim-WA. I manage to recover most of it at the last minute with a slight lost. But I didn't learn my lesson. I forgot. I got greedy and now I have to suffer again.

So if you are wise, then learn from my mistakes. You can't affort to make it :p

Tuesday, July 26, 2005

More Young Bulls Counter

Everyone is expecting profit taking now. Nobody dares to buy when the risk is greater. The past week rally is all on Blue Chips. So called 2nd and 3rd liner all still stays in CI 600 price. Where are the retail investors?

Small gold nuggets from my list for this week:
FTEC (Very young, possible support at 0.24 for further uptrend)
L&G (Can collect some at <0.18, alternatively wait for breakout at 0.20)
Sumatec (Still struggling, can bottom fish, making an ascending trinagle? may shoot up when breaks 0.75)
TA (Overbought, at the higher end of uptrend channel, a little bit more to go?)
TA-WB (Laggard, possibly momentum ascellaration)

Saturday, July 23, 2005

Young Bulls

So I have rewritten my trading rules. First of all is to determine whether a stock is in uptrend or still in downtrend. I shall avoid all stocks that falls under the downtrend category. Rebound is impossible to play. It is so easy to get hurt with this strategy.

What is and uptrend stock? I shall define a stock that is in uptrend when it has broken the downtrend line and both the weekly MACD and 3/7 EMA are positive. From here, I will use the daily charts to time my entry. Sometimes, my hand are ichy and just afraid of missing the bus. So the first thing to do when the signal is spotted is to buy a little bit. Then increase my holding at every correction until the peak has been spotted. As the price ascend higher, the stop lost shall be moved higher to protect my profit. Once the peak has been determined or the price has hit my stop lost, then I shall sell off my entire holdings. No regrets. Move on and look for another bus. This is the slow in, fast out strategy.

My first stock that fulfills these conditions is:

The facts and rumour: AGM has just approve the rights issue. Current price is too low and the management indicate that the rights price will be around 55 cents. So they have to push up the price before the SC approves it.

Soul Searching

In the past 1 month, I had some successfull trade and some disaster. I have used the 1-2-3 formations method but most of them gives false breakout. Why? Then I notice my mistake, the 1-2-3 formations are more reliable when used on weekly charts. Daily charts gave too much noise.

For the successful trades, I didn't get the full profit as I have excited too fast. Ex: Ramunia, I sold at 0.87 when it rallied to 1.10 before stopping.

So I keep thinking, what have I done wrong? I want a simple method, spend my time minimally, and earn obcense profit. So I went back to my charts and look for patterns. Reread the technical analysis notes. Look for repeated patterns that gives the highest probability. Sacrificing some profit for sure thing is better than losing your capital. From the patterns, I have created new rules, hopefully, I can earn more after KLSE breaks new high at 940.