Saturday, August 07, 2010

DOW down a little but A123 down to 10.58, earning reports out next Tuesday and expect a quarter loss. In fact, they have been making losses and many green-stock are not making profits, yet.

Waterfalls I like at the moment

1. TopGlove - RSI at 32 : Will BUY more.
2. Hai-O - RSI at 20 : BUY BUY BUY
3. Unisem - RSI 35 - WAIT
4. JCY - RSI at 25 : Doji seen, might rebound.
5. Kossan - RSI at 38 : still can wait for 30.
6. MudaJaya - RSI at 26 : Downside risk lowered. BUY.
7.Notion - RSI at 21 : Yelling at me to BUY more.
8. ENG - RSI at 16 : WHAT?? BUY BUY BUY me.

Waterfalls I like(in order)

1. TopGlove :
2. MudaJaya :
3. Notion :
4. Hai-O :
5. JCY :
6. ENG :
7. Kossan :
8. Unisem :

Rubber-stocks : Besides TopGlove and Kossan, Adventa is also in downtrend with RSI at 32 now. Supermax is the best perfoming stock in rubber now, holding at RM6.15 with RSI 52. So, I took profits from Supermax as it is NOT oversold(and jumped 4% in a day) and chanelling my funds to TopGlove. There are still MANY of them stucked in rubber-stocks when rubber-rally ended. Also need to note that recently many rubber-stocks here giving dividends and bonus. Yes, dividends DO NOT lie. TopGlove, Supermax, Kossan will still lead the sector into expansion and higher demands and growth seen. H1N1 is over? But, orders have been made and to meet with the demands, many of these huge rubber companies are at expansion level to meet future demands. Looking into 6 months to 1 year, rubber-stocks WILL outperform KLCI again. That is my belief. So, I will definitely like to see that such a correction in rubber-sector and its related stocks as HEALTHY.

Why rubber-stocks being abandoned or retracing? Few reasons and news given(please search it yourself or else ask me out for dinner, I will point out 5 pointers in my mind! LOL) but these are temporary. Buying during bad-news and will only sell when good news are back!! These are cyclical

Tech-stocks : JCY, Notion and Eng are badly hit by 'HDD' oversupply news(besides the strong MYR). Unisem over-valued too, so moving in tandem(downwards) with the sector.

TA vs FA

I m NOT using TA here as I think I know nothing much about TA and cant bear my own stupidity. What I still use is RSI(just as a simple indicator) to see how OVERSOLD it is. If I speak about TA with CN ... haha ... I m so lousy. You see, the rule stated that DO NOT BUY those downtrend stock unless it shown signals of reversal(through MACD and confirmation using Candlesticks and also using MA. Also the volume re-actions and also support-resistance level. Also bullish crossover in stochastic and/or MA lines. Also ... add in more ,please.) I FAILED ... I m not giving up, but I do not end up losing more in coming 3 months using my flawed TA skills. I will use this coming 3 months to learn more about TA. I know I m a VERY slow learner as I questioned too much. And it takes time to experience. Hence, I will use a simulator for my TA lessons but in the mean time, I m using my 'stupid' way of buying - BUY good stocks when they are in OVERSOLD region.

Hence, I m a buyer of TopGlove instead of cut-loss? Those short-term players must be VERY good in their TA. I am NOT. I still prefer to sit on my oversold stocks waiting for it to rebound.

Example : A bad news on GenM when they bought the losing UK casino from their kiasu's sister. GenM dived due to that news. IF I m holding to GenM at 2.70-2.90 level, say, then I will be VERY glad to collect at 2.50-2.60? Afterall, I bought it at 2.80, right? At 2.50 it is a bargain!! If I m buying GenM, it shows I m VERY conservative as I m holding to a stock which will not move beyond 10%(up or down) and sitting on cash-counter(which very kiam-siap, another reason I wont buy it). Now the dust cleared, it is back to Rm2.80 level now. IF you think it might move beyond RM3 soon, you might be disappointed again. What?? TA can be used for this counter too? The only time to profit was when it dived when the 'BAD' news was out. I was tempted to BUY on that day but too busy and my funds NOT in standby mode.

Example : MudaJaya dived on Thu is a good example for those following markets. It DIVED 30% or more(touched 3.75 in VERY fast pace) and at 4.00 now. Nothing to do with TA ... buy when there is FEAR. It is called contrarian trading or whaever name you want to put it. Today, Mudajay is oversold due to the BAD news. Nope, personally I do not llike MudaJaya due to lack of my knowledge in its FA but it DIVED. catching the knife?

So, back to our point .... TA for TopGlove? Hmm ... I know FA for TopGlove. In term of TA, it shows DOWNTREND ... so, short-term trader shoould have CUT loss if they bought early at 6.70(like me .... 4R1G seen then, ok?). But, to use CIS(I agreed with YJ), we need lots of BULLETS which we do not. Or at least, I do not. So, I need to clear most of my portfolios, changing it to few stocks I like which are OVERSOLD. I do know TopGlove is OVERSOLD and it is still a leader. I do know the strength of MYR is temporary and USD will rebound. I do know the demands still there and the sector is resilient. I do know they are still the leader in the sector, in fact in the world. I do know more FA and valuations than TA. Wait ... it is NOT cheap at RM6.20 now(with PE estimated at 20 level) but I do know leaders deserved to be valued higher.

I do know no foreign funds not inside KLCI and KLSE is one of the BEST supported markets. With good outlook, I do know MYR is second strongest(after Korean Won) vs USD at the moment. I do know ALL these are temporary.

Common sense telling me that good oversold-stocks will rebound. It may NOT see RM7+ soon, but it will rebound. How about the low?? Buying into downtrend stock risking getting our funds stuck in and registering paper-loss as the stocks move lower, right? YES ... with RSI 30 level, being a leader ... how low could it go? Yes, all out if RSI lower than 20. I might even clear most of my holdings for it if RSI at 20, ok? CUT LOSS is NOT in mind as TA not being used. Sorry to my trainer who teaches us E, P and S. S = stop loss. I didnt apply what I have learnt. Not in my TopGlove.

TopGlove is for INVESTORS with longer time-frame, positioning ourselves for the rebounds. Do you think rubber stocks will rebound and rally again? We shall check again ... wish me luck!! I needs lots of it!! Hehe

6.45 pm : Went shopping at Pyramid, our fav shopping place. A quick check on Aeon at 5.17 and Aeoncr at 3.79. I remember AeonCr IPO'd when I was still very RAW with KLSE. I do not know how to apply its IPO. Was it valued at 2.60? A check on it ... it was listed in DEC 2007 ... I have not officially in market yet, and still dont know what CDS a/c is. Haha. I even remembered I asked my best-friend(a banker) can I subscribed to BioOsmo IPO? He laughed and advised me to quit markets before I get badly burnt. He was badly burnt in 1997-1998 market crash and still holding to some stocks which no longer listed!! That was how naive I was ... I know nothing about IPO or what a sector is!!

BioOsmo : Since its IPO at 0.33 on 5th DEC 2007, it NEVER reach 0.30 level anymore ... it is at 0.125 NOW without trading. IF I bought at IPO and hold(as FEAR in me saying that IF I sell at the level now, I m losing more than 50% ok??)

Note : I have looked into KLSE(few counters ... AirAsia, NguiKee and INTI to mention few) back in 2007-2008, two years before I even opened my a/c with OSK. I was learning to read about INVESTMENTS.

If I m not mistaken, there was still one more IPO in DEC 2007, some paper or printing company. I asked stupid questions around and no one bother about me!! Hmm ... many IPOs when markets are bullish. We dont see many in 2009(is there ANY?). In 2010, we have many IPOs coming back to our market, even those companies from China seeking funds here! I read that there might be another 2 China-stocks in 2H. I dont know if they are next SHOE to drop. Many shoes are dropping here.

AeonCr : IPO priced at 2.60, shot all the way up to 4.40 in a week before crashing down when markets crashed ... and even at 2.10 NEW LOW in Mac2009. Today, it is well supported at 3.65 level. Slow and steady way of moving ... uptrend



David Ng said...

I noted that Topglove just came below it's 50 days MA. You may want to consider that in your TA. Cheers.

Anonymous said...

Hi, Do not buy stocks just based on RSI only..

bullish stock is normally having high rsi value..

CP said...


Thanks David for pointing that out but I m not good in TA.

Yes, I agreed that we should not look at RSI alone when buying a stock.