Patrick Stock Reading

Wednesday, November 30, 2005

UTAC

UTAC have a strong break out today. One may wanted to wait for the price to pull back after the breakout at around $0.65 -$0.66 to enter into position.

However, At time, the pull back may be weak and the rallies contiune with only a slight drop in price. For those who are able to monitor actively, may consider taking position tomorrow and exit accordingly.

Well at what price? Can try $0.695 to $0.70. Please at your own risk ok.

Thursday, November 24, 2005

Capitaland

Capitaland - On the left is a daily chart.

Looking at the peak it seem that there is a strong resistance at $3.40 level. There was predicted a possible double top formaiton, but didn't materialise, was rather skeptical as it's never easy to make such prediction and many experience traders would rather wait for the comfirmation signal.

On a macro view, it look like an ascending triangles. So am I predicting or just an assumption. Well it is too early to say for now. MA wise, golden cross was formed but as the price is still trading within the MA and not above it, the bull may not be very strong and likely to be taking a break.

The good news is, short term, the uptrend is still intact (trendline), golden cross seem to be forming in the stochastics chart. Depend, if Friday trade is positive, well Monday is likely to see more upside. The bad news is MFI is going down, but usually, pay little attention to it, especially when others indators is positive.

Let take a little look at the weekly chart on the left. Uptrend is still intact and everything look positive. If one is familar with the price pattern, one may want to take a closer look on the top right hand side of the chart. It is interesting to note.

MA and MACD- it is still trading above it. Histograms in MACD, fail to record it peak, likely due to sell down by a small number of trader. If one is already vested, active monitoring wil be good start from Friday. Decrease in volume and a narrow price range shouldn't sound an alarm, but never be blind to a strong trend reversal signal, provided it appear, lah!

Next point to note: Shouldn't be ignore to Capitaland fundatmental. Where is the bulk of its' investment? While it is true that local current inter-bank interest is high hurt property sector. Blind selling will definately hurt your mid/ long term investment gain. Key word to remember - wait for confirmation sign. What's the market doing now to capland stock? your guess is as good as mind. ;)

Wishing all happy trading and may all have a gainful day.

Saturday, November 19, 2005

Trend Analysis Make Simple - Volume and Price

Have been trying to understand their co-relation and find difficulty in explaining it. Probably, I don't understand it too..

Generally, a spike in volume and price range signified a breakout. However, for a down trend it may not requires volume. Stock can be sell down with low volume and when some panic holder see a decline in price and follows blindly, it may causes further decline in price and everybody suddenly start selling without any logical reasons.

With that, not suggesting one to hold on the stock because the Fundamental is strong nor suggesting selling alone with the majority, . Ultimately, decision must be make base on current suitation, protecting capital and making gain - It means

1. Cutting losses (protect capital and further losses)
2. Taking profit (preventing gain turning into losses)
3. Bottom fish when the selling is exhausted (volume dry up, light volume with very narrow price range)

Bottom fishing needs a little mentioned here, some trader were against it, as it is difficult to tells whether the current low is the lowest or it's is just taking a break before further decline. Point 3 have suggested the sign to lookout for for bottom fishing but again it's not fool prove.

Currently, am monitoring the Eagle Brand Holding for my learning. It have been on the decline since Feb 05 from $.011 to the current price range of $0.055-$0.060. It this the lowest price range. not sure. should we jump into it. Depend.

As to how it would turned out nobody could tells and depend on their ability to improves it profit margin, it's everybody guess for now. However, from Technical analysis (TA) persepctive, it is likely to be at it base now from my understand of volume and price currently they are trading, and am monitoring for the surge in volume and price range. of course, there is a poosibility that the price will further decline.

Spike in volume - Theroy wise; we may average the daily weekly or monthly trading volume. as for period to use for averaging, personal preferences. The period I used for averaging is between 3-5 days of daily volume. If one volume surge with little change in price, i might adjust the volume to a level that is near to the previous day volume. This adjustment, I find it necessay to reduce future reading error in volume. Such surge in volume without signicant price change, on a personal perspective, it may due
1. Force selling
2. Retail Investor who pop-in once a while to trade
3. Speculation
4. Punting

By adjusting the volume close to it previous day level, it will not change my average volume to much, thus allowing me to clearly see a surge in volume when it happen. A surge in volume it likely to take as early as the first two hours after the opening bell was sounded. we could safely confirmed it, when couple with a increase in price range and a daily volume at the same or above its' daily average after three hours into it trading or half hour before the lunch bell. My view is likely to bullish if i see this happen.

Unless, a sudden change in market sentiment, example bad news broke out or when a stock is speculated, such trading volume is generally likely to continue and the price range for that particular day is likely to further widen in the late afternoon.

Wednesday, November 09, 2005

Trend analysis Make Easy - Support, Resistance, Range Trading


As show in the chart, support line and resistance line are draw by joining two or more price points across a period of time. For support, the line is draw at the low where most of the price point are, and the resistance it at the high.

When the price move along the support and resistance line it is know as range trade, meaning that the stocking is moving sideway. It was said that such movement can be as long as 70% of the time in a stock. The benefits of drawing these lines allow us to see a breakdown or breakout clearly when it happen. A breakout as seen in the chart, a dominant white candle (Second last white candle) with price suging and volume increased, this is a strong signal for a breakout.

Before the major breakout, let look back at the MA, a Goldcross was formed at 22 Jun 05 and the price have been trading above the MA, however the signal is not strong, and the volume is not very convincing too. At this point one should continue to monitor this stock for an entry. The surge in price and volume will confirm the rally.

Posted by Picasa
The chart on the left, is an example of break down. Looking at the MA, the first Dead cross was formed nine days after it reached it new high. I was more keen in drawing the support at $1.16 instead of what was show here. however for the benefits to show the dead cross, had move the the support lower.

Breakdown do not requires heavy volume or a wide range of price different for a major dumping to occur. In fact, there is a fews sign of trend reversal in the chart, and as long as there is a fews trader believes strongly what they are seeing and start selling, the down trend would start rather immeidate. You may try to identify them. Of course, there is a a different view when we read a chart. My answer is below.

My little view is:
1. tweezer top
2. Dead cross
3.stochastic is moving down from the overbrought zone
4.MACD is trending down
5. Histogram fail to record new high.

Monday, November 07, 2005

Trend Anaylsis Make Easy - MA Golden & Dead Cross

Example of Golden & Cross crosses Posted by Picasa
When using dual MA in a chart, we will noticed that at time the short MA (blue line) will crosses the Long MA (green line). When this occured, a golden cross is formed. You would also noticed that the share price are trading above the MA.

Dead cross is the opposite of Golden cross. In the centre of this chart is where the dread cross is found, you may have noticed that the short MA( Blue line) have went below the long MA (green line), also the price are all trading below the MA.

Ability to identify this will ensure one sucess in share trading. What one should do when these crosses are found? To looked at other indicators for entry if not vested. If vested, you may like to adjust your TP to ride on the rallies.

If dead cross is detected, one should review it holding and consider for an exit. Others may just exit immediately to protect their capital. Do take note, some dead cross are just a temporary pull back (price correction), therefore it is only right for you to double check, before acting. In the chart, between the first golden cross and and the dead cross (Both circle) there was a golden and dead found, however, this is an example of temporary pull back.

On the other hand, it is always okay to exit at the first signal of a down trend, but never regret for the action taken as long as that particular moment your decision is deem as appropriate. Flexibility is the key element.

Sunday, November 06, 2005

Trend Analysis - make easy

Generally, this is what I did these days before entering a trade. Overall market environment do not really concern me, instead am looking at fundatmental, short and mid term trend, moving average (MA), price and volume. For MA, period varies, and still working on which period to use.

Will be posting in series of the above mentioned. for a start, will start with the discussion of drawing of trendline. The focus on this posting will be, uptrend, downtrend and support and resistance line.

Drawing of uptrend or downtrend line: Theoretically, they are draw by connecting two or more price points. In a line or bar chart, it is usually at the high or low of these price point for down and uptrend respectively. In candle chart, one may choose to do the same. However, drawing the line at the closing or opening price points will not make much different to the trendline.


Weekly chart of Capitaland showing how the uptrend line was draw. Posted by Picasa
In actual fact, flexibility is one important element in trading, so feel free to do so, when drawing trendline.

Included below a weekly chart of IPC showing down and up trend line being draw.

Did you noticed MA cross over was show in both charts? Will skip the technical explaination of MA as I'm no math guru. As a general guide on the use of MA, if the price is above the MA, the stock is veiw positively and uptrend is likely to be intact, if MA is below the price point, the opposite may be true. However, it is only prudent to double check on the daily chart as well as others indicator for confirmation trend.

Trader also need to be able to identify the golden cross as well as dead cross when using two MA, as it help to identify the continuity of up and down trend of a stock. Golden and dead crosses is when short MA cross the Long MA. Golden cross is form when short MA crosses above long MA. Dead cross is formed when short MA cross below the long MA.

Price is below the dual MA - bearish
Price above the dual MA - bullish

Weekly chart for IPC showing downtrend and uptrend line Posted by Picasa

Will discuss on Support and resistance also will highlight golden and deadcross in my next posting.

Tuesday, November 01, 2005

Micro-Mech

The XD effect is still hold truth in most stocks and this stock is not spare from it, couple with major decline last week, would consider that it is holding up well.

The next couple of days would see a rise in price and expecting some adjustment on next Monday. Therefore, trader beware when trading this counter next week.

Generally, the company have strong cash flow and have no long term debt and a very strong financial position, inaddition to it positive result and expecting growth to continue. Posted by Picasa