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Wednesday, September 21, 2011

Technical Analysis : SIME

SIME : e-mail from Shiro

Shiro : Hi Teh, this is my first e-mail to you. It is better so at least I can keep track our conversation here.

TEH : Welcome ... but hope you could understand that I DO NOT reply e-mail unless for my turtles to learn. Do you know that I have 12 e-mails this morning, besides yours which related to KLSE, 3 from my turtles? Do you know that I have 4 hours of classes today to handle while another 3 stacks of paperwork to urgently do? If u could understand that, and being considerate, then ... this might be the last reply of e-mail. Sorry, I dont keep track of my conversations with my turtles. They are my priority. Not other readers. Certainly not someone e-mail me to check on THEIR stocks. I simply ignored MANY.

Shiro : I have check through many blogs available in the net I found out that there is a difference between you and Edwin, who taught me TA in early months.

TEH : That time was months ago, when things are BULLISH. So, I could tell you MBSB going to break-out(remember?) even way before it did. Today ... is different play. You dont expect breakout, do you? Yes, Edwin learnt from Chart-Nexus ... pure technical analysis. I have to mention here AGAIN, I am NOT from TA-school. I went to CHX to learn about TA, then I laughed(I still do ... cant help it). Look ... unless you are VERY veteran in KLSE, you could NOT talk about technical-analysis as TA FAILED during these times. UNLESS we could SHORT, we go the opposite way. Imagine IF I could short many. Hahha. There are VERY different methods of learning TA ...for example FR and EW. I dont even look at these and the 'guru' Bill shared with us that day ... and CONFIRMED my views into such technicalities. Haha. Talking about TA, it doesnt WORK in many environments. You can learn that from me, honestly.

Shiro : Please take note that everything I write here is purely based on my observations and my knowledge given from Edwin so far towards this field.

TEH : Good ... at least you are listening to Edwin(or me?) for good advices. DO NOT listen to your brokers, dealers and your friends/relatives. Most do not know charts, ok? Edwin is good and kind person to share with you all. What happen to the chat-box?

Shiro : 1. Based on Edwin's TA, whenever there's RSI broke into oversold region, it's a technical sell call. However, when I read your blog, you like to mention these oversold stocks and you are likely to buy them. As what you told me before, you have studied the stock based on historical data up to 3 years and its personality. Does this mean that the way you are trading is much more like 'punting', or put it this way, 'high risk, high reward' strategy? I understand that Edwin's TA is more to support and resistance analysis, and buy on support and sell on resistance, which leads to small profit if success, small losses otherwise.

TEH : Remember, I am doing what many WONT do. Buying into those diving like hell is stupid, in my opinion. Am I reating my stupidity here? Haha ... I do not believe in High Risk, High Reward. Ask my turtles how I teach them in first class to reduce RISK. I teach them NOT to lose money first. Profit comes later. Haha. I do mentioned buy at support too. Yup, I am a punter, a speculator, a trader .. whatever names they called it. Haha.

Shiro : 2. I have been following Edwin's and your blogs. Both of you have something in common, which is RSI. It seems that your hit rate is high enough by just using RSI and buy stocks based on low RSI. Is RSI really the most important indicator?

TEH : My first module with my turtles are MA and RSI. Haha ... yup, it is important to me. You dont get many know how to use such indicators well. I am still learning, actually. Yes, I told them that I learnt RSI for 6-8 months ... just ONE indicator!! Told you so, I am such a slow learner due to my stupidty? Hmm ... I believe in LEARNING things well, apply them in REAL actual trades. That is why last time, if you read my blog 2 years ago, I only mentioned about RSI blah blah ... If you are telling me RSI for a stock is low and it is a buy NOW, I find it very vague ... what? Since when I said LOW RSI = BUY?? With such markets now, of coz many are OVERSOLD la. Need to check RSI meh? hehe ...Yes, it is an IMPORTANT tool that I am using in my buying/selling.

Shiro : 3. Put SIME as our stock case study.

This is Edwin's SIME sell-call

http://edwinextremebullrun.blogspot.com/2011/09/sime-technical-sell.html

This is your quote taken from your blog , 19th Sep 2011

SIME : At 7.86 now? What's up SIME? Checked with doctor about your diarrhea? Do take a rest, no more hot-chilly for you, babe. Yeah, I dont really wait for SIGNALS? That is risk, I know. What signals? Most TA indicators are lagging. Will check on the candle-stick later. Sime touched 7.64, my 7.60 not done. Too bad.

And it seems that you have bought and average down SIME at 7.60+, and now it's close to 8.00. As you mentioned, SIME is a blue chip company after all, and it shouldn't drop that way. It is true that TA indicators are lagging, but what advantage that gives you to get ahead from such lag? I find it very really impressive enough.




TEH : Luck? Pure stupidity of catching a knife? OF COZ I do know it is a risky trade. But, I do buy hugely into her, releasing Axiata on Friday. SIME looks more interesting at that point of time. Hmm ... if I need to answer this one, it will be very lengthy. Technical indicators?

Check the chart above ... a nice white candle-stick formed yesterday. Histograms still in RED. Mind you, KLCI was in RED yesterday, remember? What indicator(s) to use, if any?? Support at RM7.50. Queue at RM7.50 will not be done, my RM7.60 also not done. I was in sms with my turtle BL on this when I bought SIME. What indicator again? Pure punting, right? Today, it is at RM8.16 now(12.25 pm ), touched RM8.20 ... and if manage to close in green, the first GREEN histogram wil be shown in MACD histogram. Then, that is a so-called buy-signal, right? More from TA start to buy in tmr above RM8.20. What is next? Waiting for MA lines to cross to give us BUY signals? Hmm ... or RSI above 40/50?

Sime will be resisted my 20MA at around RM8.40 level, that will be the time I might SELL(keep funds to buy something else) ... and what indicators again? Wait till it break 20MA for confirmation of uptrend to BUY?

Look ... the chances of it is DOWN is much higher in such market sentiments. TA doesnt work well in such situations. Only some indicators could be apply. Check out my whole blog ... since when I bought Axiata? Only recently. Do you know that this is only the second time I bought SIME? I dont like SIME(haha) as a counter, I dont like SIME as it wont double even in bullish of markets for two years!! It is a lagging giant(like IOICorp).

So, everyone look at TA in different manner, that is why TA is interesting. It is powerful for those use it well. Do explain to me HOW those many uncles-aunties could understand TECHNICAL ANALYSIS in four days attending courses in Chart-Nexus? The software is good, the indicators taught are in a right manner ... but who is using it? In the hand of novices, IT DOESNT WORK. Ask those MANY who have paid thousands to attend the course and fizzle out. There are a few very good and learn well, of coz. I am talking bout the 80%? YOu ask them to wait till BUY signals, right? Do you think they will listen? With their many years in market punting away, reading forums, listening to rumours, do you think they care about your indicators? Then ... they will say Technical Analaysis is stupid, a scam blah blah ... without checking on THEMSELVES. Yup, they are NOT matured enough to be in market, do u know what I mean? Technical as is it ... wont work for many of them. It doesnt make sense ... as markets are dynamic. It is always in a move(and manipulated too). Dont expect technical analysis to work in such cases, ok?

12.35 pm : SIME closed at RM8.23 for lunch. Time for my lunch too.

Shiro : 3. Do you actually use real-time stock indicator?

TEH : Nope ... I am a simple person. I do use KNOWLEDGE which MANY do not have. I am lack of experience in market. Give me another 5 years, will ya?

Shiro : As I am not your student,I hope you will still drop me a reply :). I am willing to learn more here.
Looking forward!

Take care!

TEH : I replied here for sharing with all. You are welcome. Perhaps you might want to join  my classes? hehe

Shiro : P/S: My initial last name is JL, and the person who give you crap e-mails, those weren't me. is another JL :).

Cheers!

TEH : JL was my good friend of 5 years in Sabah, ok? His wife was my colleague too. We stayed at same neighbourhood and he is a young medical doctor. He was a novice with TOTAL zero knowledge about market. So, I guided him for FREE and finally ... he left after bitten me. ouch. Read Mac 2009 to Aug 2009 posts. I wont like to put anyone as JL, so you are Shiro to me. :)


SIME : e-mail from BL


Well, 1 thing I've observed for these few days is.... Usually when a stock has been oversold massively, dun too greedy to wait for it to drop further until itz support line. Eg: I was smsing w mr teh tht day regarding SIME... I was waiting to queue up at 7.6 as itz a support line for this stock. Well, I've juz realised tht support line & resistance line is juz acting like a subjective indicator for us... It doesn't mean tht we have to follow bulat2 to go in at the point.... Lookin fwd to learn more bout risk& reward soon... If I wasn't so ignorant to wait till the 7.6 level& grabbed some at 7.65, would have gt some handsome profit to get it around 7.65- 7.75 & ready to sell off at 8.4 level or at the level when every1 thinks the massive sold off by foreign funds are over& time to ride on the boat... Lots more to learn... To grab on the deal during waterfall sold off b4 the u turn rebound's there or wait till the confirmation signal's there baru masuk, this's an important decision to b made, hopefully by learnin more& getting more trading experience, we will master it better in future. :)

TEH :  Yes, BL ... support-resistance is SUBJECTIVE. You see, we reduces our risk AFTER it shown signs of reversal. For example, I caught a knife in TopGlove recently at 4.35(thought to be support) and then have to sell for a loss(tho small). Are you are risk taker? Do you have the experience of catching a knife? What if it goes lower and lower? Checking the volumes-action is important point I taught you. I caught SIME at 7.75, ok? I asked you to check 7.80 level, remember? Yup ... way to learn. But again, I do not wish to give you the fish. I am just writing here what I bought. I couldnt explain why as the deal done, we still dont know if it is a good trade or else we have to cut again? This is a yo-yo market now, more punting than trading. Yes, TA indicators lagging ... are you up enough to cut-loss if trades fail? Do think about it.

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7.30 pm : SIME closed at RM8.24. Let's talk about TECHNICAL indicators. MACD first histogram, an early signal of reversal. It didnt indicating a BUY, ok? RSI hooking upwards now ... just another indicator of early sign of reversal MIGHT be in place. Stochastic bullish-crossover at oversold region. RSI at 40 level. So, I am giving you THREE positive indicators, ok? With a WHITE candle-stick shown, is that enough? Or perhaps some 'donkeys'(stubborn head) might want to check other indicators like ADX? How about MA? No need to check MA meh? Heck, we are still BELOW 20MA, ok? What does that mean? It is a short-counter trend waterfall catching!!

Luckily it rebounded .. unlike my Topglove where I have to cut-loss. Similar trade ... TopGlove a heavyweight in glove-stock, broken RM4.50 and dive ... I got caught at RM4.35 then. I average down before market closed at RM4.29 then. The next day, it dive further ... and I waited at RM4.20 and it broken RM4.20 for me to cut-loss at RM4.19 level. Then, I sms-ed MS as I think he 'followed' my trade. Today, TopGlove did not recover well YET. How do you see such?

SIME on the other hand broken my RM8 level, dive ... and I was watching. Then, at RM 7.75, it was intraday low in the morning(you may want to CHECK the validity). So, I placed RM7.75 and went for classes. I was surprised it was done. Then, I placed RM7.70, RM7.65 and RM7.60. My cutting loss is at RM7.50 as it SHOULD NOT breach RM7.50(I told BL that day as he queued at RM7.30, i think). RM7.30?? Gosh ... I will run like hell having caught at RM7.70 level. Wait a minute, this SIME. This is NOT DVM, ok? Do you understand SIME? Hmm ... think again.

Conclusion : SIME is a BUY now due to positive indicators. ALL POSITIVE. Buying tmr, it might go up to RM8.30+ and I shall be SELLING(as always, people rushing to buy, I started to SELL ... that happened to my Axiata too).

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Lai Shien Nang : MFI is still heading south, this rebound won't able to last long.... may be 2 days story...
22 hours ago ·

Alan Ch'ng : Up or down, won't hug BB too long. If undervalued, good bargain. Can anybody help in valuation?
22 hours ago ·

Lee TG : It was a bullish harami pattern, but it needs confirmation. But with this pattern with the white candlestick close at the high with reduced volume indicates supplies had slowed, and demand appeared. I would interpret the probability of a mo...re likely up move. But during this period, it is difficult to estimate how high is a rebound, if there is because there will be many profit taking to resist any up moves. Those who can take risk may plan for a trade with a plan. If I were to plan this trade, I would only buy when it moves up today with some initial good volume (not a few lots) at least to a price of 7.94 for an entry. I may set a stop loss of 7.72 and have my initial exit target at 8.45, or exit early if it moves up be fails to strike above 82.5. I am making my interpretation and making those numbers based on candlesticks analysis.

But as I said many times, it is always better to stand aside during this period of high volatility unless one is confident of a plan and execute the plan with discipline. those already holding positions may just set a trailing stop, but if bought at the top of the latest candlestick, better execute the stop loss should it drop rather than confirming the bullish harami reversal
16 hours ago ·

Lai Shien Nang : market today no strength at all....
12 hours ago ·

CP Teh :  Time for me to sell my SIME when many started to talk about SIME. Thx, Lee. hehe
11 hours ago ·

CP Teh : Alan, when I speak about valuations, I will talk about FA, not TA. I will speak about business, CPO and global demands. These are boring stuff for TA-kaki. They prefer to talka bout MACD or BB... which, in my opinion, FAIL. It is absurb to talk about RSI and Stoc. Do u understand? May be kind Lee will explain more?
11 hours ago ·

Lee TG : CP, you may notice from my earlier comment on Sime, and most of my technical analytical comments that I do not talk about technical indicators except moving averages. Now I only look at candlesticks which is a raw indicator, with trend line...s and chart patterns for price S&R, and volume to analyst SM. Price derivative indicators lagging, but candlesticks and volume together are ideal combination of leading indicators that will allow a technical analyst to look forward to make a trading plan ahead than others who depend on lagging indicators.
12 minutes ago ·

CP Teh : Yup, I tried to explain how TA failed in my blog for my buying of SIME. You are right, I used volumes and candlestick. Also, some experience in catching a knife. Haha. Yes, MA is my resistance as this is counter-trend. Whoever drawing a SIME chart with MACD, RSI blah blah showing lack of experience in TA. We all learn from each other. Thx Lee.
2 minutes ago ·

TEH

8 comments:

Anonymous said...

TEH,

Apart from chart, do u take % drop into consideration when extreme selling happen(when u compare stocks)? TQ

Ywc

CP said...

hi

that is FR? Nope. I do not use FR. I dont use things I dont know or dont believe in. haha

TEH

Anonymous said...

TEH,

After xtreme selling, then no doji, but stock recover a bit, is it time to buy?

If we wait for confirmation, will we miss the boat?

TQ

Ywc

CP said...

YWC ... good that u asked a lot of questions. Too busy to reply here and too difficult to explain in writings.

till I see u

TEH

Anonymous said...

TEH,

TQ for entertain my Q.

Two days ago i punt hapseng-wa at 0.31, today sold at o.325. Made some petrol $$$.

Then punt into wct-wb at 0.31 today. Doji appeared,hope reversal can hapen soon, but the mother no doji. Anyhow I just take risk, hope make $$ soon. hehe...

ywc

ccchow_55 said...

Many people equate doji with selling or buying. Certain criteria must be met first ... Is the Market overextended, is there a trend to reverse?
A doji merely tells us market is tired(if coming after a trend), it has changed the trend from up/down to neutral.
If doji Appears in a range Market it has no significance . We must look at doji in the prism of the overall Market. Same with all other candles..

ccchow_55 said...

Many people equate doji with buying/selling . It merely tells us trend has changed to neutral. We have to wait for next/or next few sessions to determine action.
Do you agree?

alwayswin111 said...

Another down day Hmm