Friday, May 8, 2009

KLCI 20090508 - what can you do now ?

First, it was bearish and most experts were saying the worst is yet to come;  (me too)

Then bull came and expert analysis polarize into 2; one group said that this is dead car bounce (me too)  and another group said the worst is over ! ( not me)

Now majority of the analysts are forced into agreeing on the bull trend. (not me)

Despite what they (I) said, what can you do at times like this?

First of all, no matter if you believe this is a fake or real bull.  The fact of up trend has been formed is a reality.  Following this method;

You can see clearly that KlCI hit the ceiling at 1,032 on 7 May and therefore came down that day.   You probably should have sold some of your old holding stocks by now.  If you have just bought some, sorry for late posting lor :)

(I sold mine on 5 may, slightly earlier than the perfect point)

Anyway as you may see from above 2 blue lines and learning what to do during an uptrend from this article ...

You may wait till the following support line to buy again;

993 on 11 May
998 on 12 May
1002 on 13 May
1007 on 14 May
1011 on 15 May

Expected entry dates would be 12-13 May.

This is one of the examples to earn easy money from stock market during an up trend.  This particular analysis is confirmed on 30 Apr, so it would be best if you engaged on that point using this analysis result.

As of now, there is only 1 hesistation on this.  Observe the orange circle and rectangle,  stochastic shows that it is in oversold status.  So if it hits the support line on 13-14 May (late week) then it may indicate rebounce (buy before support line), if it hits support on 11-12 May (early week) then it may indicate a crash ( buy after rebound ).

An added strength to this analysis is that the whole Malaysia is crazy about technical analysis now.  Most investors think that technical will 'guarantee' profit due to their ignorance.  As described in these articles:

Technical chart alone are NOT the solution for stock investment !

Anyway, what really matter is, since the general public are dump and now they believe in technical charts, all of them will buy and sell based on the charts.  Knowing this, it will give you the advantage to get in and out earlier than them to earn better profit than them.

---- ok so far, above are considered as proper consultation despite what you believe how the market will move (scientific?), below this would be my own personal judgement (artistic?)---

Since I am one of those who believe in dead cat bounce, I wouldn't be able to enter market during the next rebounce.  I will have to wait till it really rebound then I will need to decide again if I still believe this is a fake bull or is the worst really over.

I am sure this article will be more confusing than helping to most.  But in general, what this kind of analysis has done is adding a dynamic variable to technical analysis - the Time factor.  It doesn't change the fundamental flaw in Technical Analysis but it does help to stay ahead of others who also use technical charts.