Volume was exceptionally high at 410,003. This kind of volume has not been seen for a long time at Redtone. The candle clearly shows that distribution is going on. For those who are contemplating to buy Redtone, now is definitely not the time. Wait for the distribution to complete first before you make any decision.
If I am long on this counter, I will immediately make my exit, come Monday morning.
Support for the stock is at 63c while strong resistance is at 91c.
The above commentary is my opinion accordingly to my reading of the chart of Redstone.
If you listen to me, you do so at your own risk. The writer disclaims all liability for your perusal of this blog.
Don’t chase momentum if you can’t find the exit. Assume the market will reverse the minute you get in. If it’s a long way to the door, you are in trouble.
18 comments:
Agreed.
People normally buy on rumors (read as expectation), and sell on news.
Yalor, things can get pretty scary.. cos people used to believe that prices will go up when there is good news about the counter.. but with speculators around, the opposite happens... the price goes up before the news and when the news is out, people buy cos they believe there will be demand.. but actually the price sinks faster than titanic... like what happens with UEMWorld and Tebrau...
hi, quite new to the bursa. still going thru the redtone and the ratios seems to be very promising to me. Just that can't really appreciate what you mean by the distribution.
kindly enlighten me here.
Every stock go through the phase of accumulation, public participation and distribution.
This is all written in the Dow Theory.
mr tee, Distribution here simply means that smart money that have bought the stock at lower prices are disposing of the shares and taking profit.
Hi Ben,
Thks for the answer. I think still new to this, not knowing taking profit also means distribution.
Actually I sometime feel learning stock market (even though started reading since 4 months ago)is more exhaustive than what I had been reading during my medical school days. No matter, will get grip o it soon, of course, with ur helps here.
Ben, when you say 'long on the counter' what does it mean? Does long here mean 1. Invested a lot in it. or does it mean 2. Invested with the wish to hold on to it for a long time?
cimb apparently has TP of 0.63 for redtone. I intend to sell off mine. why is the wimax acquisition not helping it? and Robert Kuok behind it some more.
hi Greenbull,
i just went thru the CIMB report on Redtone dated 19th.March.07. Hope that will answer ur doubts on that.
When I said that If I were long on the counter, I meant that if I had shares of the counter.
Before the news came out, the price had already discounted the news. Hence the price didn't move up when the news was announced.
Ben: Oh, I wondered 'cos sometimes I also hear ppl say "to be short on the counter". What would be the difference between the two?
chilaxis,
To short a stock means to sell a stock when you don't have it. The idea is to buy back and make profits when the price of the stock comes down.
To long means to buy and normally means with the idea to sell later for a profit when the price goes up.
I hope you get the idea.
Ben: Very clear now thanks :) So that 'short' there meant short-selling... no wonder.
Hi Ben,
I don't own Redtone (although I've been eyeing Redtone for some time after I-Capital's bullish outlook), but that's a pretty good call. Congrats!
I'm just looking at Redtone's charts now (30 Mar) and trying to figure out if the stock reached bottom yet. Yesterday (29 Mar) was a nice green candle after days of successive reds, but my gut feel tells me the sign is not so clear yet, because the closing at $0.67 is not even half of yesterday's fall (from $0.70-$0.655). However, if I look at the volume, yesterday is also lower than the day before, i.e. is this also another important sign that yesterday's "recovery" minght not have enough strength yet?
But what I find interesting is that if one looks at the TA indicators - e.g. Slow Stochastics, whilst the 2 lines have not yet crossed, both are very low (6.5 and 10, well below 20), suggesting a possible Buy. Also, Stochastics RSI (17, below 20) suggests a possible Buy.
As a new TA practitioner, I find this sort of situation unclear. Pure candlesticks coupled with volume suggests uncertainties in the trade, whereas TA indicators say now might be a safe time to buy. (According to my limited interpretation of TA).
Just wondering what is your call - how would you read Redtone, as of yesterday. Appreciate hearing your kind and experienced views.
Many thanks. And well done on your blog!
Kind regards,
Seng,
A small white candle appeared at the close on 29.3.07. This is not enough to read as reversal. In fact the downward trend is intact at this stage. The likely support is at 63c, This does not mean that at 63c, the stock will rebound. A better entry will be to have 2 white candles in favor with some pick up in volumes. As regards to other indicators, I do make use of them. In this respect, I suggest you refer to Max for the answer.
Regards, Ben
Seng, I mean to say that I do not use other indicators to interpret chart action. I use only price, volume and range. If you believe in indicators, please refer to Max.
Best,
Ben
Thanks Ben. I appreciate your generous insight. I understood what you mean about price and volume the first time - I now recall reading somewhere that you like to keep it simple, but thanks for your clarification.
With regards to waiting for 2 white candles, I noticed there seems to be another mini-support at $0.70? It doesn't appear to have been tested in last 6 months, but given that it's trading below $0.70, do you expect the $0.70 be a mini-resistance, or is it too hard to tell at the moment?
Thanks again.
Seng, Any top that is breached when the trend is on its way down becomes a resistance.
Max has an article on support and resistance at his blog http://fusiontrader.blogspot.com/
It's worth your while to read this.
Post a Comment