Sunday, June 30, 2013

A Time to Remember

TimeCome started at RM3.49 when the market opened in the morning on Friday, 28.6.2013. It had a gradual uptrend,  and by 4.45 pm the stock was traded at  RM3.65.

 At 4.49 pm, the stock suddenly turned very active. On the sale side were selling of more than 30,000 lots,  and on the buy side were buying of about the same volume. The bid and offer price was at RM3.84. The sudden jump in the price from RM3.65 to RM3.84 was a great surprise to me. I quickly joined in the queue to sell. I keyed in at 4.49 pm to sell 100 lots,  4.50pm to sell 200 lots, and 4.51pm to sell 100 lots at RM3.84. 

When the market eventually closed, I managed to sell only 200 lots. I immediately called my remiser to enquire why the 200 lots I keyed in to sell at 4.50 pm were not sold. 

After some checking, I was told that because at 4.50 pm the computer was in the process of matching the orders, and so some entries to trade at that time were rejected. 

This taught me a valuable lesson. You should not key in at 4.50 pm to either buy or sell if you do want your orders to be rejected.

I was puzzled as to why the price jumped so much at 4.49 pm. Who was the buyer, and who were the sellers? The sellers were probably the small timers while the buyer was probably an institution that wanted to take a substantial take in the stock. 

Nowadays,  one must be extra vigilant at 4.45pm until the market closes on any trading day to make good use of any opportunity to make a fast buck.

Thursday, June 27, 2013

Gold Is Unsafe at Any Price: Dicker /By Jeff Macke | Breakout

Another day another beating for gold. The yellow metal fell another 3.5% overnight bringing it to prices unseen for almost three years. The SPDR Gold Trust ETF (GLD) is now down over 25% year-to-date as retail investors find themselves on the wrong side of what is suddenly looking like one of the great boom-bust cycles in precious metal history.
As for what's driving the plummet, MercBloc president Dan Dicker says it's all about Main Street coming to the sudden realization that there is no safety whatsoever in gold. "When the retail customer gets frightened, they get frightened in a hurry and they get frightened for big numbers," Dicker says in the attached clip.
Retail investors are scared for good reasons. Gold is an investment that should have worked when the inflation which was supposed to run rampant due to currency devaluation kicked into high gear. As the inflation thesis gets debunked gold is getting mercilessly hammered. There just isn't a compelling fundamental reason to own gold and the chart is broken. The only thing left to do is hope and panic; usually in that order.
Dicker makes the point that the GLD, as a massive ETF, is forced to buy and sell physical gold holdings as the size of the fund fluctuates. When sellers start dumping the GLD it forces banks to go into the market and sell physical gold into a weak market. The result is what Dicker calls a "cyclical death spiral" that makes calling a bottom an exercise in futility.
Those looking to buy the dip in gold are fighting the trend, a tide of so called "weak-hand" sellers and a broken fundamental investment thesis. The market doesn't give out badges for bravery; hundreds of years of gold trading history suggests there are better places to put your money right now.

Saturday, June 22, 2013

Is TDM on fire?

Some weird market activities happened in Bursa in the closing minutes of yesterday's trading. 

BKAWAN, TDM, CBIP, HSPLANT & COSTAL were all traded limits down in heavy volume immediately the clock hit 4.50 pm. On the plus side, we have JCY, up 24 sen, and Star, up 85 sen to
90 sen and RM3.71 respectively. 

TDM was the stock I was focusing on the whole day. It opened at RM4.09 and was traded up to a high of 4.18. In view of the weakness in Wall Street, I had sold some of my TDM shares at the average price of RM4.15 in the morning session.

At 4.45 pm, I saw big volume being quoted on the buy side and sale side at RM2.90. 

Initially, I thought someone was playing the fool with the bids and offer. Then at 4.50 pm, my computer screen blinked, and wow! more than 3 million shares were being done at RM2.90 per share. I couldn't believe what I saw. So I immediately called a remiser to find out what actually happened. I was told that the stock was indeed done at RM2.90 at the close of trading. He also told me that several stocks were also having the same unusual action.

I have no idea what had actually transpired. I think the following scenarios are more impossible than possible:
1. Someone hacked someone's account
2. Stock manipulation by traders
3. A malfunction of the computer
4. Key-in error by traders
5. Liquidation by foreign fund managers
6. Some planation lands in Indonesia are on fire

Bursa should do a through investigation into these unusual market activities and make its findings public.

What can we learn from what had happened? We learned that anything is possible in the stock market. This reminds me of the quote that if you want to achieve the impossible, you have to do the ridiculous. 

Friday, June 21, 2013

FBM KLCI to turn bearish

The DOW closed down 353.87 early this morning. This, coupled with the news that China is experiencing a slowdown will drive the FBM KLCI index down when the market opens. Support at 1742 is not likely to hold. It may come all the way down to 1720.

Sunday, June 16, 2013

Three Strategies To Riches

You need a car license to drive. Why? Because your mistakes can be fatal to someone else. Therefore, before you are allowed to drive, you must prove that you are competent in driving, and know the traffic rules as well.

In the stock market, you don't need a license to trade or invest in shares. As long as you are of age, 18 and above, you can open an account with a broker firm and start  trading. You do not need any special education for this purpose. In fact, the more foolish and loaded (rich) you are, the more you are welcome, simply because, your mistakes are only fatal to yourself, and to no others. 

The market is a zero-sum game. For someone to win, some others must lose. That's why you are  most welcome if you are the most foolish and have plenty of money to lose. 

There are many ways to build up wealth. In the stock market, I know of three. They are:
1. Buy low, sell high, 2. Buy high, sell higher, & 3. Buy high and sell low.

The first two strategies are logical, but the 3rd one looks ridiculous. How can one buy high and sell low and still makes a profit? Here's the explanation:

At the end of a bear market, prices will be at very low level with little volume transacted daily. Prices are likely to be moving sideway in a tight range. This sideway movement can continue for months or even up to a year or two. It is during this period of lackadaisical trading that  savvy investors are accumulating shares. 

For those who wish to buy high and sell low, they stay awake and alert. They are waiting for an upside breakout. So as soon as one appears, they buy. This is: buy high. Assuming that after they have bought, the stock moves up, they will buy more to make more as soon as the uptrend starts. As the stock moves up higher, their concern is to take profit. For those who know technical analysis, the best time to take profit is to wait for a downside breakout to sell. This is what I mean to sell low.

I hope the above explanation is clear about the strategy, " Buy high and sell low."

Different times call for the use of different strategies. Your temperament and financial standings will decide which one of the three strategies suits you best. 

For me, I use all of them.

Thursday, June 13, 2013

Smartag A Big Disappointment

Smartag is a big disappointment. Quarter after quarter, the company reported negative earnings. Investors of this stock are now cursing and wondering what is happening to the company. Last year, the company said that it had successfully tested its technology at Customs, and yet until today, the company is still running at a loss. 
The chart shows that the stock was traded to a low of 8.5 sen on April 30, May 2 & 3 this year before it was traded to a high of 20 sen on May 22. The stock then drifted down. It was well supported at 15.5 sen. 
On June 7, the stock opened at 14.5 sen, half a sen lower than the previous day's close. It was quickly pushed up to a high of 18.5 sen, and then heavy liquidation of the stock hammered unabated the stock down to 12.5 sen before closing off the day's low at 13 sen. To me, the stock was being manipulated and insiders are trading. What surprised me was that Bursa didn't queried the company of the unusual market activity on that day. 
The stock is now last traded at 10.5 sen with many red candles at its trail. If you wish to dabble in this stock, watch closely, the show is not over yet. Wait until you see a bullish signal before you buy.

Monday, June 10, 2013

Sunday, June 09, 2013

ECS Correction Over

At ECS, the run-up is as fast as the run-down. Last traded at 1.17, the correction looks to be over. The stock was well supported at 1.16 as shown in the chart. I don't think the stock will fall below 1.12. So the downside is small. Now is a good time to buy into the stock. As usual, you buy at your own risk.

Saturday, June 08, 2013

Multico All Set To Move Forward

Multico occupies a prominent position in my portfolio. The stock has been in a gradual uptrend  since June 7, 2012 when it was being traded at  1.14. 

Last Friday, June 7, 2013, the stock closed at 1.78. This means that the stock has moved up 56.14% within 1 year. This is commendable because the FBMKLCI moved up only 12.71% from 1575.3 to 1775.5. 

Going by the chart, the stock is now all set to move up higher. Watch it closely, come Monday morning; chase it at the opening bell. You will see the money within the next few days or even at the close of the day. 

Please remember that if you listen to me, you do so at your own risk absolutely.

Good luck and may God bless your every trade.

Friday, June 07, 2013

MHB Dead Cat Bounce?

The above chart of MHB (last trade at 3.41) looks dangerous. It is in the formation of a Dead Cat Bounce or a Bull Trap. The last two red candles portend further downtrend ahead. Be careful if you are playing this counter. It can go much lower. This is my prediction. Whatever you do, you do so at your own risk.