Friday, November 05, 2010

DOW up 200+ points ... KLCI closed, unfortunately. Otherwise more selling!!

I will like to continue with Mr Ooi's article before I write another lengthy post! Haha.

Ooi : In 1993, with the economy booming, the Government planned several mega projects, including the KL International Airport (RM8bil), Johor-Singapore Second Link (RM1.6bil) and Kuala Lumpur Light Rail Transit (RM1.1bil). The news of contract awarding immediately sent the market into speculative mood on those potential candidates. Similarly, the news of the Government planning on privatising some of the its own corporations, such as Petronas, KTM and Pos Malaysia had also driven these counters into prime trading targets.

TEH : Currently there are many mega-projects in line ... all the corridors and recently Najib announced the 100-storey building. Constructions, properties, building-materials are in play. Counters like Gamuda has been shooting up(ahead of its fundamentals?) and news about UEMLand, MRCB, MMCCorp are making head-lines. So, everyone is buying these counters ahead. As they said, market is about 6 months ahead!!

Recently too, many were wondering about those counters that will benefit from these said projects. Even counters like AZRB, Zelan are moving. This is a bull-run when you started to see small speculative counters in-play. What counters are you targeting?

Ooi : Besides, the ease of accessing bank credit by investors also contributed to the market rally. We noticed that a high percentage of loans was channelled to broad property sector as well as the purchase of securities.

As a result of massive inflow of foreign funds and the super bull run in stock market, Bank Negara introduced a number of selective capital controls in early 1994 to stabilise the financial system,

TEH : Yes, property-stocks are doing well. SPSetia leads ... Sunway, Sunrise, IJMLand, IGB ... these are good stocks but then ... smaller players like Malton ... to more speculative counters like Tanco or Keladi being used by syndicates in-play too. There are simply too many to mention here but you get the pictures.

Recently there is this property-tax la, now BNM said 70% loan only-la ... etc etc ... considered as 'capital controls' in view of property-bubble. Is there really a property-bubble currently? Many developers have denied such a bubble(of coz la). I do see it as 'too expensive' as I have been looking for a decent place(to buy and stay) but I could not really find anything below RM200k. So, I have to opt for apartments here. A low/medium income citizens like me could not afford a landed house anymore in locations like Subang Jaya.

Ooi :Recently, our Prime Minister Datuk Seri Najib Tun Razak unveiled the Economic Transformation Programme (ETP) with the aim to boost our gross national income (GNI) to US$523bil in 2020 from US$188bil in 2009. The programme is to attract investment not only from the Government, but also (more importantly) from domestic direct investment as well as foreign direct investment. In view of strong economic growth, our GDP growth is anticipated to increase by 6% this year.

In September, we notice that there was a net inflow of foreign funds again in our equity market. Over the past few weeks, the average stock market daily volume had been hovering above one billion shares per day. Almost every day, the top 10 highly traded stocks were those speculative stocks with poor fundamentals. In addition, we noticed that some retail investors had started to get excited again in the stock market.

TEH : Yes, I have wanted to write more about ETP but I m still reading more about it. While it is a fact that local funds have been supporting our KLCI index-linked counters, we are seeing influx of foreign funds. Many commented that KLCI is no longer cheap. Also, the low liquidity detering more foreign funds to invest here.

Ah-ha ... top 10 highly traded stocks were those SPECULATIVE stocks with POOR fundamentals. These lines speak my mind and you could see many in forums asking questions like "Bintai can buy ar? Or what is happening to Carotec?". Of coz, many have been laughing to bank due to their good fortunes with KBunai and/or HWGB. In-out-in-out of these counters in daily basis for small tokens. So, when markets get too excited, more aunties/uncles attending market talks(one of the reason I m attending market-talk is to see the amount of crowds and who are actually attending) ... more people looking for courses to attend, with a hope of getting HOT TIPS. Look at CNX's courses ... the huge increases in the number of members(new) and also those attending trader's meeting. Many retired aunties there learning TA(which I m still struggling to grasp! Wow!). I mentioned about a retired English teacher learning TA. Oh boy, beats me ... I m of a strong Math-based(and proudly considered myself as VERY good) but I m still struggling to adjust(or re-define) those indicators in my trading plans. How do you expect an English retiree teacher to learn TECHNICAL ANALYSIS to trade in markets??

It is AMAZING facts how marketing of a product(in this case, Chart-Nexus) works and generate income for the company. Who cares if they know how to use it to their benefits? And if it works for one or two stocks(bull la, anything also up, aunty), they will slowly yet STRONGly it works!! Then, they will market it to their friends!! Hey, I discovered a 'secret' way of profitting from stock-markets, friends. They called it TECHNICAL ANALYSIS or TA, in short. C'mon ... we will be rich pretty soon and could proudly show to our relatives!! Hmm ... deep inside us, GREED in play whether we aware or not!!

I m not discouraging anyone to join any courses but these are non-technical retirees who THINK they could learn TA and give them huge profits. Also, perhaps ... TIPS. Otherwise, how do I explain the 1000 clicks per day visiting my blog? Mine is not even the main ones compared with so many around. Mine is written with so many ah-chee-ah-chor and very cheong-hei(long winded) manners and many find it ridiculously irritating. ALL I WANT IS TIPS (TIPS to me stands for Think In Probability, Stupid which I wrote for Learning Purposes) la, you said so long for what. Who cares what you think or feel. Just tell me if MTronic will be a good punt next week!! Sigh.

The evidences of more retail punters getting excited are there now. Even in a property-forum, they have started to speak about stocks!! And there is a face-book page talking about stock-market!! Face it ... with the swift of internet, 2010 bull-run will not be equal to 1993 where rumours/news could spread so fast. We have MANY online-traders these days.

Ooi :According to Andrew Sheng in his book titled From Asian To Global Financial Crisis, there were two main indicators to irrational exuberance during the super bull run in 1993. The first was the amah (domestic maid) syndrome. We need to be careful when amahs got excited about the stock market. This was because they did not know what they were buying and would always be the last to sell. The second indicator was when businessmen began to speculate stocks in the stock market. This was because they might neglect their businesses and use some of their cash for speculation.

Note : I m one of the followers of Andrew Sheng's writings.

TEH : The amah-syndrome discussed ... the aunties/uncles going for courses, reading blogs(including mine and get offended - hey young man, dont call me 'uncle' and I have been in KLSE for 20 years. Who are you to tell what not to buy! I gained hugely in HWGB. If you are stupid, just admit it. These lines sent to my hp!!) ... started to buy The Edge for the first time(or again after hiatus for 2 years since the collapse). The second indicator is more important as 'insiders' started to PLAY with their own stocks!! Explain how MANY penny stocks(cheaper than 20cents) being played(besides the syndicates, of coz).

Ooi : Comparing our current market situation with the 1993 bull run, there are certain similarities that we see, such as strong economic growth, ringgit appreciation, inflow of foreign capital and ease of credit. However, our local retailer participation is yet to get boiling, which may be the last push factor towards the bull run. Hence, once the participation of the local investors starts to get heated up, together with more inflow of foreign fund, that may be the signs of the market heading for a ‘mini’ super bull run.

TEH : I will want to hear more from these local-retailers participation. They will buy high and dont sell type. Learn to SELL could be a good advice. Currently I m hugely in markets and letting the bull to run. I m still selling after RSI reaching 70-80 levels for my 10-20% profits.

Well, finally I've written more or less and commenting to Ooi's timely article. To me, he is MY sifu. I have 'sifus' whom I listened to. They MUST be a person I respected to read their writings. I missed Mr Choong KH(murdered) writings about 'small-cap'. I respected Sal.Dali and Alex Lu blogs the most as they have been un-selfishly shared their opinions about trading/investing. While there are many more trying to claim to be 'sifu' or 'guru', please NEVER mis-lead by my writing and believe that I m in that category! Please count me out ... I m only writing what I read and comment base on my shallow knowledge in markets ... and yes, I have LESS than 3 years in market. I have only joined the CNX for learning TA in June 2010(5 months old la).

You get me clear? I m a NOVICE in market, lost money in 2008, recovered in 2009 and learning TA in 2010. In 2011, I will start to share my limited knowledge to pure novices who want to learn and attend my small class, in sharing about FA + TA method of looking into stocks.

PT & WK : I m counting both of us in, ok? hehe

Registration is open for Jan intake, with freebies for early birds. Places are limited. Book you seats soon. For more information, please e-mail me personally. You have to be a total novice to trust learning from me, a novice! Haha.

counter : 1.20 pm on Wednesday was 256, 456 and now 1.20 Friday(public holiday) is 258, 252. That is 1796. So my count is right.

Plantation-stocks : This sector has been having party for 1 month pllus now. Uptrending confirm. CPO above RM3,000. Ok, considering my fav HSPlant for the ride.

O&G : This is a sector in play too as crude oil price at USD86 now. Whether if it could go to USD100 is up to everyone to see. It is likely now.

2.20 pm : Checking on the stocks I m stalking, starting with RSI. Here is my 'homework' using RSI-14 as initial check on 'health' of the stocks, technically.

RSI at high level - SELL

EAH : RSI at 69, as I sold off the portions I bought at 0.55 at 0.60-0.615. It touched 0.62. SELL if another day up, doji seen.

LionInd : Collecting around RM2 is over, now RSI at 63, at 2.07(touched 2.09). Still a few days to ride on it and sell when it is overbought.

SigGas : RSI at 70 ... ooppsss .. time to dispose. Considered sold.

KimLun : RSI at 67, touched 1.69 but back to 1.61. Those grabbing at 1.40+ was good time to sell.

BRDB : RSI at a high of 76, it is a SELL for me. Many more very much nicer.

Sunway : RSI still at a high of 70, support at RM2 level, at 2.06 now. SELL.

Kencana : RSI at 65, and testing resistance. Another SELL for me.

Kinsteel : RSI at 60, below RM1 is a good entry point.

CIMB : RSI at 66, hooking down. Due to bullish sentiment, I think it wont go too lower in its RSI.

AMMB : RSI at a high of 72, breached RM6 resistance. SELL was two days ago when RSI at 78. Ridiculous level.

SPSetia : RSI at 60 ... it was at 76 at one moment. Still one of the better property stock. SPSetia-wb shooting for the sky.

Bursa : RSI at 60 ... but still a few days down will be nicer.

KPJ : RSI at 63, testing resistance at 3.73. RSI high and at resistance is NOT a buy to me.

AirAsia : RSI at 62, from 77 level. Retracing a few more days will be good.

KFC : RSI at 81, one of the winner in my stalk list, shooting higher each day. BUY high sell higher?

Due to the bullishness in markets, many stocks are staying at high level of RSI. That is expected as everyone is bullish, hoping the stocks continue to move high.

RSI below 60 - hold/buy

HuaYang : RSI at 48, supported by 20-MA. Good.

AnnJoo : RSI at 55, starts to move up. Good.

Jaks : RSI at 48, nice to grab some at 0.720 level, support.

E&O : RSI at 53 ... with property sector in play, these still not moving stock have more rooms to run up.

TopGlove : RSI at 55, more upseide seen.

TWSCorp : RSI at 46, at support now too. BB squeeze in the making. Nice.

AZRB : RSI at 53 ... reasonable after the huge surge. Now it looks nicer.

RSI below 40

MEGB : RSI at 20 after another deep dive. Watch for technical rebound.

SEG : RSI at 25, has been drifting lower for more than a month now.

HELP : RSI at 38, way down to go ... for this is a better performing stock now.

MAS : RSI at 38, moving lower to support at RM2.15. MAS losing to AirAsia?

Evergreen : RSI at 31, no more green forever?



Anonymous said...

Hi Teh, great stuff for sharing. Keep it up. From time to time, there bound to be assholes talking shit on some one else blog, ignore la..

Imoogi said...

From what I see, we will have 6 to 8 more months in the is end of year push...then cny push...then general election push. In the coming weeks, media will start to harp that the bull market is here, forum/blogs will announce that the bull is here, everyone making noise that they have make more money in the market.
Foreign funds already in our market and cheaper dollar will push more of them into our market. With all these catalysts, more uncles/aunties will come, more newbies will come and that's when we have to be more careful.
Dont bother what they sms to you or talk to you or write to you....just enjoy the bull ride as long as you know when the ride will end.