dimpledbrain

The conceptual framework for a man's search for meaning

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Armada

September 15th, 2019 by dimpledbrain
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  1. I was first asked to check on Armada on 20/8. Refer to point A above.
  2. At that point in time, I said the chart is weak and there is no demand.
  3. Lo and behold on 30/8 (10 days later) demand came in and pushed the price up (Point B)
  4. It then retraces beautifully over the next 4 days. Observe how the closing price retraced into a tight spot and on decreasing volume (there is no further supply being pressed onto the market)
  5. The market went up above RM0.30 (the resistance line that I talked about in the last post)
  6. It still has the capacity to go up until demand is exhausted + supply comes in. What it does on the next retracement will provide clue onto the next likely movement

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Maybank

August 29th, 2019 by dimpledbrain
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  1. The worst place to trade is in the middle of a trading channel.
  2. Not surprisingly, this is the place where most retailers love to action.
  3. Looking at the chart above, a better trading price to buy is around RM8, i.e. the low of the downward channel.
  4. Trading at this price will also reduce price risk (refer to previous post)
  5. The probability of it going to RM9.30 (from current price) is there, albeit low
  6. David Weis, a master of Wyckoffian method, would call this as ‘fishing around the edges’.

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BTC

August 21st, 2019 by dimpledbrain
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  1. At its purest form, BTC is a pure technical play with no fundamental whatsoever
  2. So reading this kind of chart is also very interesting
  3. From the peak at year end 2018, BTC hit USD20,000 per coin before going down to USD3800/coin early 2019
  4. The recent high at USD13K/ coin got back many ‘experts’ talking before it fizzles out to the price now
  5. So what next?
  6. I expect this to go sideway for the next 3-6 months
  7. Let’s revisit this in due time

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Price Risk vs Information Risk

August 21st, 2019 by dimpledbrain
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  1. Most retailers confuse the concept between price risk and information risk
  2. Information risk means how much we know about an asset, example a publicly listed company
  3. If we know a lot about a company, we say that the information risk is low
  4. When retailers try to ‘research’ for more information about a company, the thinking here is to mitigate information risk
  5. However, the one factor that makes you money is price risk.
  6. The higher the price, the higher the price risk
  7. The golden rule to make money is Buy Low Sell High. Always. The second golden rule for the pro is Buy High Sell Higher. I do not know any other rule to make money than this.
  8. Price risk and information risk are inversely related, the more information is available in the market (and hence lower information risk), the higher the price will be (more premium attached to it and hence higher price risk)

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GenM

August 21st, 2019 by dimpledbrain
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  1. Like I said before in the Public Bank post, for blue chip counters, you have to buy on weakness (and bite the bullet)
  2. The current price is attractive to collect

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KNM

August 20th, 2019 by dimpledbrain
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  1. KNM has shot up fast and furious from the base at RM0.20
  2. At current level, it still has the opportunity to go up to about RM0.425 level (the final level before it slams down OR forms a base for the next move up), but one needs to be very nimble to trade this and get out FAST
  3. Notably insider has been selling this recently (profit taking)

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Bumi Armada

August 20th, 2019 by dimpledbrain
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  1. Without looking at the quarterly financials due latest by 31 August, this chart itself spells weaknesses
  2. One might think it has bottomed up and therefore represents a good buying opportunity but as at today there is nothing to say demand has come back in
  3. At best it will still be moving sideline for the next 3-6 months
  4. I will be looking at the RM0.30 level, which is an important Resistance line
  5. Let’s check back in 3 months’ time how accurate is this

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Support and Resistance

August 14th, 2019 by dimpledbrain
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The first step to successful chart reading involves identifying (and drawing) [perfectly] horizontal lines on the chart called support or resistance.

It goes like this:

  1. Imagine a stock price dropping from a high
  2. Once it is ‘low’ enough, it starts to move sideway
  3. A stock price dropping means sellers are overwhelming buyers. There are more sellers than buyers (and hence the price drops)
  4. Once it reaches an attractive base, buyers start to emerge.
  5. At this point in time, buyers absorb any remaining units sold by sellers
  6. Hence price will stabilize as early bargain hunters absorb any remaining units
  7. Price starts to move higher after some time (due to fewer units in the market) and this will attract even more buyers
  8. This gets into a loop – stronger price attracts more buyers until it reaches the top.
  9. Return to #1 and the process repeats
  10. A breached support line will turn into a resistance line and vice versa. (if buyer emerges to buy at RM2, and forms a support line, and only later to be overwhelmed by sellers flooding the market , price will drop from this point. Subsequently, this breached RM2 line is where a lot of weak hands who had previously bought at RM2 now turned to become sellers (and hence it becomes a resistance line)
  11. This is partly psychological – weak hands who say bought at RM2 will hold on to their dear life when stock slides down to say RM1. Once it gets back to RM2, they will quickly sell the stock (risk aversion) to break even from the stock and breathe a sigh of relief.
  12. I have drawn 5 horizontal line below on a real chart below. Think of them as either support or resistance. Observe how once the support line is breached, it becomes a resistance line.

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Pbbank

August 14th, 2019 by dimpledbrain
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  1. Public Bank is approaching RM20, a long time support line since 2014
  2. This represents a good buying opportunity for people looking at long term
  3. Even at current price, it has the potential to bounce back to RM22 (lower of the downward channel). At a minimum, it should rally back to RM21 area (mid of downward channel)
  4. For blue chip counters, the best strategy is always to buy at weakness (while biting the bullet)

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Getting more and crucial conversation

August 3rd, 2019 by dimpledbrain
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So the other day someone asked me a question – why are they pissed off when their expectation is not met

This kind of situation occurs daily – I have seen a fair share of these situations.

So I explained that there are a couple of pointers we have to always keep in mind:

  1. End goal – what are we trying to achieve here. This is very important. If your goal is just to get satisfaction from blasting the other person, humiliating the other person without getting anywhere, this response is ok
  2. But it turns out that this young corporate superstar needs to get some work done through her peer.
  3. So I ask her to focus only on the end goal and to coordinate all her other actions, thoughts and behaviours to achieve this goal
  4. If the need to explain 20 times is necessary to achieve this piece of work which is important to you, wouldn’t you just do it without hesitation?
  5. Sadly, most people drift aimlessly in this world. This happens because the end goal isn’t clear. Conflict happens because of this. Paradoxically, it is so much easier to live without clear goals than otherwise.
  6. If your action doesn’t support your end goal, then you are only jeopardising yourselves.
  7. The picture in the other person’s head – to complete this discussion, always remember to start any discussion from the mental picture in the other person’s head, not yours.
  8. Phrases like “why is this person so lazy, dumb”, “why is this person not respecting me” etc point to the mental picture in your head, not the other person’s.
  9. In summary you need to think hard of the end goal you want to achieve. Then start from the mental picture of the other person and then deploy any means to inch that picture towards your end goal.

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