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Friday, August 13, 2010

My 'waterfalls'


A123 : It dived for the past two days as US markets losing grounds and also it reported bigger losses. So, runn runn ... just recently it shot up when Barclay upgraded it. It shot up 20+% ok? Today, it dive to US8 level and seeing 7.50 as that is its historical low. I will only buy when it dive lower, below 7.50 and OVERSOLD. Hmm ... another act of brave-heart or pure stupidity?!


EAH : At 0.515 today ... wow ... it was at 0.48-0.49 two days ago when I queued at 0.450. O.45 is its low. RSI below 30. I have written about it when I moved to buy during that LONG black candle. I have bought from 0.53-0.48 during one day buying spree. With average at 0.495, I will NOT sell this one until it is over bought. It is moving today.




Hai-O : At 3.35 level now ... RSI at 27, I bought it when it shown a white candles and first green histogram(I was taught about 4R1G signal to buy). So, I 'galdly' obey my TA rules ... BUY. It makes sense to me to grab Hai-O to diversify away from my tech and rubber. Hai-O may not rally soon ... but its downside(risk) is much lowered after the recent sell-down. This is a good stock which still give dividends. So, I m wont mind collecting more of it. But, a break of my purchase price at 3.25 might trigger my SELL signal. Stop-loss at 3.20. Long Hai-O.


TopGlove : I have written about a little about her as I m accumulating and seeing rubber-stock to bottom out soon. How soon? I wish I know so that I wont be buying at RM6+, right? Hey, at RM6, it is oversold. The whole sector-index is in oversold region for some time now, and TopGlove is one of the first rubber stock to retrace. It pulled others with her ... except for Supermax not in oversold region, most are now.

So, will you buy into rubberish sector when no one interested? Recently, Topglove shot up to 6.40 for one day(above chart, one white candle), before retracing again ... well, it is at RM6.15 level today. I will only look again at RM5.90 ... I received few comments and e-mail from concerned readers(about my stupidity, I guess) ... especially some TA 'experts' saying that TopGlove is not a buy yet tho RSI showing oversold. Thanks ... I m not using TA for TopGlove. Technically, TopGlove's RSI at 36, came up from below 30.

PT : Today I shown my young colleague-friend TopGlove's chart. Wow ... impressive run ... due to H1N1. Officially recently it is announced that H1N1 is OVER. Yes, investing in rubber last year was one of the smartest way of profitting in KLSE. So, will rubber-rally back again? H2N2? How long should I wait to see the rebound again? I dont know ...





JCY : An unloved stock in a rubbish sector at the moment. RSI below 20. Price at 1.15 level, touched 1.10 the day I bought it back. I bought at 1.36 and 1.26, only to released at 1.20 with a loss of Rm1k+. Now, the dust is cleared? Not really ... but I m starting to collect again. Fundamentally, anything much changed? The over-supply news, the competative price from Western Digital vs Seagate, also the strong MYR news have dampened investors confidence in this stock. Of coz, we need to add that the risk of HDD being obsolete!! Well, you heard it, iPad using 'flash memory' and anytime SOON, you will not see HDD being used in pc or mac. Hmm ... I m not a tech person, but I think those reports or news are to FLAME the FEARS in investors, in order to shake out those short-term traders. Then, someone is buying at the back of us.

Suddenly, when the sky is clear again(someone rainy season will be over), the SAME media will tell you the opposite stories!! By the time you want a piece of her, it is certainly at higher price and that 'someone' will be glad to distribute the stock to you, profitting handsomely.

So, I want to follow that 'smart' someone. BUT ... the FEAR is REAL. Think logically, not emotionally. I want to remind myself to BUY into oversold stocks and be brave and greedy when others are in FEAR.

So, I do like this so-called rubbish sector. Unisem was a strong BUY at 1.95 support level. Nice ... ENG is bottoming-up at 1.70 too, I think. I like Unisem too ... someone asked if Unisem below RM2 is a BUY. I wish I know. But, I bought it too ... too greedy. Unisem and JCY having different business, actually tho they are categorised in the same rubbish-sector, oopss ... it is moving today, so we can call it tech-sector AGAIN?

Confession : I prefer those oversold stocks!!


Comment by YJ

Hi Teh,

Just want to clarify something. Oversold stocks doesn't necessarily mean stocks that are in a downtrend. There are many stocks that are on an uptrend but can become oversold due to a minor correction.


TEH : Yes, of coz I know that(I think). RSI14 are using the changes of prices reactions for 14 days. I do look into RSI9 too. That could give me earlier signal if a GOOD stock are moving into oversold region soon.

A good example is Mamee-Double Decker. Earlier this week, it was in oversold region but rebounded when it hit its support. This ensure that the stock's uptrend will continue.


TEH : Yes, you are a technical person, so it is easier for those good in TA to understand trends. I wish to note that I DO NOT bother about trend, if the GOOD stock in my watch-list moving to oversold region, I will stalk it. Tho I may know a little of TA, I do not use it on TopGlove, HaiO or even JCY. I bought Unisem today after rebounded from support at 1.95(touched 1.88) to abouve RM2.00. Is TopGlove, JCY, Hai-O and Unisem uptrend or downtrend? I really dont know as I didnt check!! But, logically I think it is down trend ... if I need to check its MA lines and MACD lines.



Also, I would like to point out that some stocks also stay in oversold region for a "very very long" time and any rebound is limited. Take LCL Corporation for example. The stock has been in oversold territory from April to June and had a minor rebound in mid-June before going back to oversold from July until now. But of course, it can be argued that fundamentally this company is not doing well but I am sure there are other similar examples out there.


TEH : Yes, ONE of my MAIN criteria to trade is NO PN17 stocks. You wont see me buying into such even tho speculatively Stamford could give us 50% UP per day when edu-stock rallied. LCL used to the darling of KLSE, but when the founder sold his holdings, it is doomed. I wont care if it is oversold. I m NOT a PURE trader using TA. Hehe.

So, I need to clarify too. I m bought these 'waterfalls' with RISK attached. Not without. With clarity that they might not recover SOON(unlike technical person expecting uptrending stocks to stay uptrend and buy high to sell higher - I m opposite) but my stupid logic telling me IT WILL recover ... one fine day. Somehow, one day the SAME media and even same analyst will tell you how rosy the rubbish sector is(I know, these analysts are just WORKING, not analysing using brain).


So, if anyone buying into what I m buying, u r in the risk of being seen and stupid! Haha. Be ready to average down. If you are a short-trader, sorry ... I m not using TA. TA telling us NOT to buy into downtrending stock or wait for reversal, using CT strategy. It is said to be risky. But, I have found that trading uptrending stock without good knowledge of TA is much more riskier.


Well, thanks YJ for pointing that out for sharing with others. Yes, RSI in oversold region DOES NOT mean BUY in TA sense but I m using my logic. Nothing much. Is that called LA = logic analysis?


TEH

3 comments:

kvh said...

"US FED said it would begin buying government bonds as a way to stimulate the economy.... "

if FED continued his action in the following quater , what will happen to USD VS RM . Why ??

tailow said...

mr tey, very good analysis, i like yr style. i bgt jcy as well at 1.13 n 1.17, now waiting for my profit.

YJ said...

Hi Teh,

Just want to clarify something. Oversold stocks doesn't necessarily mean stocks that are in a downtrend. There are many stocks that are on an uptrend but can become oversold due to a minor correction.

A good example is Mamee-Double Decker. Earlier this week, it was in oversold region but rebounded when it hit its support. This ensure that the stock's uptrend will continue.

Also, I would like to point out that some stocks also stay in oversold region for a "very very long" time and any rebound is limited. Take LCL Corporation for example. The stock has been in oversold territory from April to June and had a minor rebound in mid-June before going back to oversold from July until now. But of course, it can be argued that fundamentally this company is not doing well but I am sure there are other similar examples out there.