Intraday Chart (Source: biz.thestar.com.my/marketwatch)The KLCI closed 3.28 points lower at 1,200.01 points today after trading higher for most of the day, hitting a high of 1,214.15 points. After the lunch break, there was a sell down which caused the KLCI and the broader market to begin declining until the end of the day. It seems that local funds may have stepped in towards the end of the day to ensure the KLCI stayed above the psychologically important 1,200 point level.
In the afternoon session, traders could be seen selling down their shareholdings which is an indication that they have not forgotten the fall that was sparked by China's plunge almost 2 weeks ago. Losers led gainers 714 to 264 counters.
Once again, another doji has formed, indicating indecision in the market. The gravestone doji which was formed on Friday was followed by Monday's gain showing that buyers had returned to the market. As can be seen in the intra day graph above, buyers were present in the morning session but the KLCI's gains were driven back as the bears/sellers emerged in the afternoon. Personally, when I have been observing the market over the past few weeks, I have noticed that it has moved in tandem with the rest of the region, especially the Singapore market. If you click on the yahoo link to the right hand side of the blog, you will be able to follow how other regional markets are tracking throughout the day. I noted that towards the end of the morning session, the Singapore market was trading in negative territory and sure enough in the afternoon session, the KLCI followed suit.
The doji that was formed today indicates indecision in the market yet again and the market's short term direction will need to be confirmed by tomorrow's trade. However, it feels that the market doesn't really have 'strength' as confidence may be shaky at the moment. This is evident when share prices began to dip quickly as the market started to trend downwards - people headed straight for the door. Perhaps the market needs another correction to shake out all the nervous investors before it can continue its strong march ahead.
Patimas
(Source: biz.thestar.com.my/marketwatch)
Patimas it seems to me is beginning to form a base around the RM0.15 to RM0.16 levels. Volume has started to decrease which to me shows that the stock is stabilising after the volatility of the past month or so. I suggest to collect between RM0.135 and RM0.155. The RM0.15 level seems to have held strong this afternoon even after over 2milion shares were sold at this level. I believe that if the market trends lower however, the people behind this counter will allow this stock to fall to collect at lower levels.
There was a mention that Patimas is moving similar to Iris prior to Iris beginning its run up to RM1.38. I did do a comparison but I shall post this up at a later date. The movements do look somewhat similar although Iris stabilised around the RM0.14 level before its next big move. Basically, the volume in Iris decreased to just over 1million shares done per day for several days before volume increased significantly and the stock moved up to the RM0.20-RM0.22 level before moving above RM0.30.
2 Cents:
If there is spare cash lying around, my picks are as follows:
- Gtronic RM0.29 and below
- Patimas RM0.135 to RM0.155
- Symphony RM0.33 and below
I monitor several stocks at once (up to 30) but I only focus on 10 main stocks that I might possibly buy. I invest using focus - meaning I put most of eggs into one basket. It can be risky, but if you select the right stocks, it can be very profitable too.
Anyhow, there is a lot of uncertainty and shaky confidence in the market at the moment so if you want to buy, I'm sure there will be opportunities unless the market suddenly takes off. When you are in doubt about what to do, about how different events will affect share prices, refer to the charts - the market will take these factors into consideration and the charts will tell you what to do (if you can read it right!).
May all your trades be good trades.
Happy Trading!
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