Friday, September 4, 2009

Observations and points to note in current market

At this stage of the market, we can see how volatile and uncertain the movements are. If you are no experts in intraday or momentum trading, you can easily get hurt. I made several mistakes for the past two weeks. selling at the wrong time and not taking profits are the greatest error I would never should commit. Since market is so volatile and uncertain, maybe we could take advantage of such symptoms within the price ranges?

1. Prices are mostly playing within ranges, alot of breakouts also. However, there are alot of fake breaks which are completely unsustainable. When this happen, if you have little profits just cash out. As such counters like to pull back after failure to break up further and sustain in that few days.

2. Do not sell when counters are in ramping mode. usually when there are no movements after the ramp for like 15-30 mins..the prices will retreat. I sold Long cheer when it was in ramping mode and when it pulled back..seconds later it moves 6 ticks up. - -Zzzz..

3. Don let emotions get out of control, we usually get pissed off with ourselves for bad stupid mistakes and like to start entering new positions in a hasty manner. Thats how I entered Baker Tech before it got sold down and had to end up cutting and losing 600 bucks for nothing today.

4.Do not chase prices, don`t be antice into counters in a ramping mode and chase after it ran a few ticks up. If the counter is strong, it will be good and you are lucky but that is usually so rare. If its faked, you will be holding unwanted babies - -..and will be forced to cut.

5. If you are sure of the momentum of your position especailly those breakout counters in a resting mode, try to hold abit even you lost a few ticks. As when market is volatile, and if prices are still hovering within the price range, there is high chance that they will fill back the gap or will continue its momentum after the 2-3 days rest. So if you do not need to lose the few ticks down, holding for a while is good to cover back your hole. But please cut if that support range is breached.

6. At this point in time where market are downtrending or a high possibility of reversal further from the peak. Its still better not to hold stocks for too long. Intraday play may be good but without proper tools and discipline we would end up losing more than winning. So please do trade with care and choose the right counters which suits your trading style.

Monday was a red day bringing back the last day of August to close at a black candle. Looking at the monthly charts, We see a start of downtrending, STI resisting at a 50% fibo level. That don looks good. Weekly are still downtrending despite small caps are still greatly at play mostly momentum brought by this week by Genting and Sinotel (3Gs counters). Textile counters stirred abit this week which should be good to take note. The possibility of market sliding further is still highly possible, a reversal this month may also occur no one knows. But usually at this 50% level of fibo, STI likes to hover here for most likey STI should still be within range and accumulation mode for at least 1 - 3 months. After that whether it broke down or up one knows.

No point to anticipate. Just ride with the market whipsaw slides.