At Critical Support 910

The rebound was brief and weak. Everytime the bulls tried to push up, the bears pushed it down. So now we are back at the 910 area. RSI shows that the index is already oversold. No sign of reversal yet, but the chances are getting better for a rebound. No guarantee though.

My performance is not good for last week. My bet on Quest didn't work as well as I like it to. It did manage to shoot up, but quickly fall down back. Now I'm back to square one. Most probably I'll cut my lost.

Other counters which I plan to cut are Plus-CA (the mother is back to bearish) and Sumatec.

If you want to read other's analysis, then I suggest that you read the blacksheeptrading site (http://www.geocities.com/blacksheeptrading/)

Rebounding....

Looks like the BMCI (KLCI) index is rebounding as shown by the 14-day RSI (where the RSI downtrend channel has been broken). If the uptrend continues, then the next target will be >960 (predicted using Elliot Wave - wave no. 5). Is this the pre-budget rally? The strategy is to sell into this rally as prolong downtrend is expected until Nov-Dec period.

If it is only a small bounce, then 930 will be a resistance and may be the point of continuation of downtrend.

Let's see what will happen next week.

Dropping arrested, rebounding now?

Market seems to put on the breaks. Maybe rebound from here. Who knows? Technically has reach the 33% Fibonacci retracement level. IF breaks 935 region, then uptrend continues. If turn back at that region, than a downtrend channel has been formed.

Interesting counters:
Quest - Very high buy percentage. Last minute push. Maybe tomorrow more action? Will try to add on position when 0.35 is broken.
Tecfast - I have let go this one last week due to inaction, but looks like it is inching up again. Hmm....got potential.
Plus-CA - Hard to read this one. Maybe rebound more, maybe continue down. Plus needs to close above 3.26 for positive action.
FTEC - Hmmm...still supported by the uptrend channel.
Mptech - Bullish reversal candle. Rebound or change of trend?

Market still dropping

Alamak, where is the rebound? Looks like the market is going to drop to 900-910 region. Technically, it is still consolidating because no downtrend channel has been made yet.

My strategy is to bet that the uptrend will continue. If my bet is wrong, then I should cut many losses.

Interesting counters:
Quest - make a bullish reversal with volume but sentiment not good. Should rebound from here kua.
Ftec - supported by the uptrend channel? If so, then next target maybe 0.40 liao.

Temptations (2)

So how do you prevent yourself from being tempted to buy?

Well, the standard way is to plan your trading before the open of the market! Yes, you should write down at what price to buy, targeted price and stopped price before you enter any trade. This will prevent you from following your "feeling". Emotions are bad in trading. When price goes up, you feel "high". When price goes down, you feel "down". We must cut away these type of feelings from our trading. More like cold blooded trading. No emotions, no feelings. Just follow the rules that you have set. Nothing more, nothing else.

So what are the rules? It depends on your personality. If you are old, most probably you will like the fundamental counters that moves up inch by inch. If you are young, most likely you will play those speculative counters. If you are a daredevil, then you will use the buy high, sell higher strategy. We are humans, each of us are different. So find out what type of trader are you. Then apply the right technique that suits you.

Just remember, write down everything you do. Keep a journal of it. At least we can analyse our successes and failures later on. It's okay to make a mistake once. But it is lunatic to keep repeating it.

For me, I'm still searching the right technique that suits me.

FTEC oh FTEC!

This is the 2nd time this sort of things happened to me in 2 months. I sold FTEC at 0.305, "thinking" that it will not break the 0.31 resistance. I was very wrong, it break this barrier and zoom pass to 0.35. Imagine the lost profit!?

The first one was with Ramunia when I sold it at 0.87 (which eventually goes to above 1.00 in another 2 days time).

So why? Why do I always sell my winners and ride my losers? Why do I always sell early? What have I done wrong? Have I violated my own rules? More things to wonder....or is it a luck factor?

If anyone is reading this, please tell me the best exit strategy. I still have a lot to learn.

Temptations (Part 1)

Visited Amsterdam during the weekend. Walk around the Red Light District (RLD). It's full of sex sex sex. The prostitute display their goods behind a glass window for you to see wearing only lingerie. You can find young girls to old aunties. They are there to satisfy whatever fantasy that you have. What a temptation.

Playing stocks is also full of temptations. Price goes up, you feel regret because you didn't buy during the low. So you are very tempted to get in. Without thinking much, you got in and "Wham"! The price reverses. Now you feel uneasy. If it goes down some more, you will panic and sold it off. You will ask yourself why you have been trapped? Something to ponder.......

This is not right!

One day KLCI goes up double digit, then the next day it surrendered most of the gain. Didn't expect that the profit taking is so strong. The candle chart points to more downward pressure. If breaks 940, then it was a false break and we shall be slaughtered.

Nothing is certain in share market. Only probabilities. It is so easy to learn technical analysis. You learn about uptrend, downtrend, resistance, support, ascending formations, MACD, RSI, Stochastic, Elliot wave etc. But when comes the time to implement, it is not straight forward. If your analysis points to one direction and it goes the other way, you will be wondering what has gone wrong with your analysis. From my experience, technical charts don't lie. It is we who lie to ourselves. We always try to interpret the chart to be favourable to our situation. Only experience will minimise this impact.

At the time of writing this, US market shows a large drop. Don't know what will happen when market opens tomorrow, will 940 be breached? Anyhow, I won't be able to see the live action myself as I will be going to Holland for a holiday. Yes, the place and not the other "holland" (in Cantonese).

Turkey Can Fly!

Big funds buy blue chips. Small funds buy peanuts. Why do retailers always goes for penny shares? I think it is due to the good feeling of holding more of less value than less of more value. Or maybe retailers live in fantasy island? Buy 10 cents share, up 1 cent, earn 10% liao! Better than fixed deposit!!! But do the retailers have the power to push the price up? After buying penny shares, we always wait for the "syndicate" to push it up. Sometimes we may be lucky, but most of the time we will go to "Holland".

Today, 2nd liners all fly high. Push push push! After 942 has been broken convincingly, everyone rush in to buy. The fear of buying high and selling low still persist. The trick is not to buy when it is overbought. From my observation, when a share is in the overbought region, the probability of it going up more is not that high. Most probably it will take a rest first to flush out those with no holding power. So do keep the temptation away from yourself. There are still many more counters with better probability for us to hop on.

I have so many counters to monitor. Very kancheong now. But must still try to keep cool. Which counter to average down (so that can get out)? Which counter to take profit? Which counter to hop on? Aiyah, my mind cannot work that fast lah. Just a greenhorn in this share thing.

Today's analysis:
Plus - First time it manage to close at 3.40. RSI shows more room to go up. Maybe target 3.50. So I hopped into Plus-CA. The ex-price is 2.79, which means it should go to 0.70. If I use the triangle breakout computation, then the target will be at 0.65.

FTEC - Just manage to close below the resistance line of 0.31. Hmmm...if break, next target will be 0.38.

Sumatec - Will be challenging 0.745. If break, then target 0.86.

Talam - Debt problem solved? If break 0.66, then next target is 0.86. Is Talam-wa worth the risk?

L&G - Broken the RSI downtrend line. Should be able to break the 0.20-0.21 region.

Breaking new high

Seems that my analysis is wrong. Bursa is breaking new high. Both the daily and weekly charts shows that KLCI is overbought. Only blue chips are matching higher. 2nd and 3rd liners all still have no petrol to move. It is very dangerous to chase the price when it is overbought. Your probability of winning is getting less and less (risk increases). If we become emotional, then we may be the fools that buy at the highs (buy high sell low)

We must be patience. Remember, what goes up must comes down. Wait for the price to pullback and then only take a ride for the next trip up.

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.

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

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)

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:
FTEC.

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.

Restrategize!

Long time since I post anything. The market was terrible. I should not have traded in a downtrend. Rebound games are dangerous. It is not worth the risk. After 5 consecutive losses, I withdrew and reread all those trading techniques that I have learn. Ya, sometimes we need to remind ourselves about the basic principal of trading. Emotional trades will just destroy our capital, crippling our "army" to wage new battle.

Now I'm using the 1-2-3 method. The first candidate that fulfilled this condition is Nscom. Let's see what will happen.

KLSE is still in bear mode. No bull confirmed yet.

Stressful Trading!

What a stressful week! Talam-WA keep dropping until it is becoming toilet paper. That's why it is essential to cut lost early. I have still not able to do this. Maybe I'm just not a good trader. Maybe I should give up trading! Give up and admit defeat?

Jesse Livermore suffer more than me. I think that I will be able to recover from this darkest moment. I need to be disciplin. Implement my plan no matter what. I have learned technical analysis. But I find that interpreting the chart and planning my strategy is the hardest thing to do. That's why experience is very crucial. No matter what happened, I must have the confidence to stick to my analysis.

I expect the index to continue dropping now. All stocks are at their lows. So how low can they go? This is a period to concentrate on my Futures. Ya, after tremendous lost, I'm going back to Futures. That's the only game I can play when the market is in bear mood. Let's see how much have I learned.

White Hammer!

A sign that the bears are weakening. Looks like KLCI is poised to rebound after so many days of selling.

Talam: Selling pressure intensified. Highest volume in months. Is this the sign of the final sell off? It must be force selling. If not, I don't think that the price can plunge so fast.

Talam-WA: When you think that it cannot go any lower, it goes lower for you! In one week I already lost 50%. That's the danger of catching a falling knife. You need to have lots of pain killers to withstand the bleeding. Bought more to average down. Don't think that it can be lower than 0 :p

Bursa Malaysia - The only red dot

Everyone green, but we are the only one with red. The easing of capital controls has pushes the index down further. Why invest in Malaysia when other places are cheaper? KLCI is heading into 850 level. That's the 66% retracement level. Break this and bye bye liao.

Talam: Alamak! Drop another 10 cents. Very oversold liao. Bursa's announcement shows that the Big Boss is buying back. Does this indicate something? Historically, 0.80 is a good support. Now let's hope that the sellers has run out of steam.

Talam-WA: Still holding this chap. Making new low but manage to close with a doji. A doji in an ovrsold market is a very strong signal. Very high chance of this stock moving up tomorrow. Rebound target is around 0.10.

Sapcres: Hmm....SapuraInd is buying back. Strong support during such bearish scenario. It is trying to inch up slowly. Must pay more attention at this stock. Any indication of rally - buy the warrant.

Rebound soon

Ya, many stocks have been oversold. My TA shows that rebound is very nearby.

Talam-WA: going into junk status. Collected some on Monday and Tuesday. High risk high gain.

Puncak-WA: Puncak has broken it's downtrend channel. News of funding for Pahang-Selangor water project was the catalyst. Looking to buy into Puncak-WA for more gain.