Saturday, September 06, 2014

Is penny-stock rally over?

Morning ... yesterday was a full-day and we have tratles' meeting last night. I posted a question to the group : Is penny-stock rally over?

Many of us have been trading those speculative penny-stocks. Now, it is in everyone's mind if it is over ... in my opinion, the party is just started. This is how the last leg of the bull-run should ends ... more and more newbies into markets buying more of these speculative counters where more operators enticing these ignorant yet greedy retailers into markets. They need ... TIME to push it higher so that they could distribute at higher level.

Is it it high enough? NO ...

Bright is not so bright now ... last year Oct, it was pushed from 50cents to a dollar. Yes, doubled in 2 weeks ... but but ... err .. now it has retraced to 60 cents. Can we buy at 56cents?

Then ... we need to answer ... is the penny stock rally over?

Brahims lagi bagus ... 50cents last year and shot all the way up to RM2.50, that is 5 times!! Now, with news of MAS re-structuring, Brahims is no longer in favour and trading at RM1.20, lost 50% from the peak. Could it goes below RM1 and be a penny again?

I could point out so many of the penny small-caps (many are empty shells) being pushed few hundreds % and are we following these hot-money?

PDZ went up 20% in a day yesterday. Shot from 15cents to 30cents in 1-2 weeks!! Well, with MARA playing the back-ground music ... will Sanichi being pushed beyond recognition? Sanichi came from 7cents to hit 14 cents ...doubled in 1-2 weeks? See the play ... and when the music will ends?

The greatest fool theory applied. WHO will be the last fool who will be buying at the peak?

RETAILERS. Newbies and those greedy ones. Those ignorant without much experiences in market. Those who are winning and profitting well at current level, who will tell their friends or in forums how 'easy' they are profitting. We are NOT in that stage YET ... so, I do still think we have more upside to go ... wait till more and more so-called stock-guru coming to town, they could be found everywhere and even in many forums. If a mama-forum starts to talk about stock-markets, if my ex-colleagues start looking for me ... then, we are almost there(at the peak).

Then, why we have statistic of 80% could losers in KLSE? Is this real? YES.

Let us look at the larger pictures ... in years to come, say another 5 years ... those profitting in markets, many of them will give back the profits and even lose more!! How is that? Cant be happening as we are all mature traders/investors?

Only those been long enough in market could understand. Today ... we are seeing more profitting. Perhaps ... 80% winners now. In my trading group, more than 80% is profitting for past 2-3 years. Is that a sign of 'peakness'? NOT YET.

Now is not the time to put our money in FD or UT. Now it the time to move into stock-markets but remember, we need to pause when market-rally is over? Question would be : WHEN?

What will be the 'thing' that will pull the market to crash? KLSE is resilient ... we are not under-valued, we are not overly stretched yet. Putting part of money in SGX is a good diversification, with SGD expected to appreciate vs MYR.

cohort-13 : I will be conducting a trading workshop end of this month(Klang Valley), tentatively on 27th-28th weekend. I will want to explain the penny-rally to this new cohort as that is the 'play'. We can profit from the rally ...

For those interested, please contact me in facebook or e-mail to

Have a nice weekend ahead.


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