Wednesday, 19 August 2015

KL: PRIVA rebound catching

Catching a rebound requires more than bravery. It requires the correct timing, the confidence to buy, the calmness to hold and the resolution to cut loss should the stock keep falling down.

I queued PRIVA @ 0.195 early in the morning, when the queue was 0.200 best buy and 0.205 best sell. Soon after the market opened, I saw KLCI "waterfall-ed" again and immediately wanted to cancel my order. But before I clicked on the "cancel order" button, the transaction was matched.


PRIVA rebound

Soon after that, the best sell became 0.195 in no time.

Soon after that, the last done price was 0.190.

Soon after that, the best sell become 0.190 and the best buy was 0.185.

This implies an immediately loss and is not a good feeling at all. It was tough to hold the counter in that situation, especially when KLCI has been plunging continuously. My confidence is certainly shaken right after buying. I decided to observe first and closed my trading platform. Until now, so far so good.

While PRIVA is not a 5-star stock (my basic requirement to catch a rebound), being a technology stock and a price of < 0.200 makes me irresistible. I target a return of at least 50% in short time.

Sunday, 16 August 2015

Currency talk 3.0

In Currency talk (1.0) I made a bold statement that the day of AUD:MYR = 1:3 is over, with a "however":

If you really want 1:3 back in the days of 2012, you will have to hope for a quicker depreciation of MYR than AUD. But even if that happens, how worthless is MYR at that time? And how much you could do with it?

Back then, the currency was trading at about 2.80. According to BNM rate as at 14-8-2015 17:00, AUD:MYR is buying at 3.0112. Unbelievably, something that I wrote without much contemplation has become true in less than 6 months.

And NO, this is not due to the appreciation of AUD but a quick depreciation of MYR since July.

And NO, even the ratio of 1:3 is back does not mean that the MYR you converted back has the same value. The 1:3 today is completely different from the 1:3 back in 2012.


And NO, I do not want to see this coming as this means that MYR is getting worse. It looks like there is no signal that could stop the depreciation of MYR.

Human's brain is hardwired to survive. At the critical moment, protecting own interest is always the top priority. This is really no different from politics where it is all about self interest. Therefore, believing that the government could somehow help the currency is unrealistic. Because of this, I have to be responsible to my wealth. I thought that it is now a bit late to change currency, but whatever it takes, I have to come up with a Plan B.


Sunday, 9 August 2015

Currency talk 2.0

In currency talk, I mentioned that MYR has no cure but insidious depreciation. Unfortunately, the prophecy has become a reality. The chart below shows the trend of USD:MYR in the last 2 months:

USD:MYR
(Figure obtained from Yahoo finance)

Point A:  30th - 1st July. The credit rating of Malaysia remains unchanged and the outlook was upgraded to become stable. MYR has rebounded strongly in the following day. Shockingly, this rebound only last for 1 day! And because of this conspiracy theory arises...

Point B: 7th July. USD:MYR broke 3.80 for the first time since 1998. I thought that 3.80 will be a strong psychological support since it was the rate pegged 17 years ago. But it did not look as "strong" as it should be. The slope of that day is relatively steep, showing that it breaks the support "just like that":



Point C: 22nd July. After breaking 3.80, I was looking for a rebound -- to at least 3.70. The rebound did happen, but to a much lesser extent and a much shorter period than I expected. This scares me a lot.

Point D: 7th Aug. USD:MYR was trading at 3.92. Why does it depreciate so fast? Perhaps political issues has lower the confidence of foreign investors?

Seeing the rate of MYR depreciation, Many Malaysians stocking up on Singapore dollars, US dollars as ringgit weakens. This basically tells me that now is not a good time to change money.

In 1997, the damage on Malaysia was relatively "mild" as compared to its neighbouring countries (except Singapore). Looking back, it was definitely a right decision to peg USD. But the current situation in Malaysia seems to be developing another financial crisis. Keeping in mind that US has still yet to increase the interest rate and MYR already like that scares me a lot. What if US really increases the interest rate this September? It is also possible that BNM may raise the interest rate in September meeting in trying to stabilize MYR. Interesting things might happen in a few months time.

Sunday, 2 August 2015

KL: KLCI technical analysis

KLCI is really weak recently. Trying to earn money from KLCI lately has been challenging. Regardless of what shares you are trading, the index is still the most important benchmark in KLSE as it determines the general trend of the market. How is it doing? Let's examine this from the monthly, weekly and daily charts.

1. Monthly chart:

KLCI monthly chart

Monthly chart does not look good. MACD and stochastic are heading negative. The last candle, July 2015, was primarily due to the last trading day where KLCI was pulled up by 23 points. Was this a sign just to draw a "nice" chart or is it that KLCI is ready to go? It has 3 black candles followed by one white candle where similar trends have been observed in 2008 and 2011. While 2008 was a real bear, 2011 was an adjustment. Which way will it go this time?  Only time can tell. 

2. Weekly chart:

KLCI weekly chart

Weekly chart looks a bit nicer. The chart looks like forming a double bottom. All MACD, RSI and stochastic seems to recover from the bottom. However, no sign of strength was observed.

3. Daily chart:


Daily chart cannot tell much. Chart shows KLCI seems to have "triple bottom" recently. MACD, RSI and stochastic are heading positive, but the trend in daily chart can change very abruptly.

A lot of rumours say that if the PM were to step down, it will lead to political instability and chaos (as in the stock market) would ensue. I couldn't be bother about this factor. Partly because I don't think he will step down; and partly also because who knows which way will the stock market go if he really steps down?

While a number of investors do not look good on the current market, I still yet to spot a "madness" in the stock market. After all, standing at 1723 is less than a 10% drop from the peak of 1890+. Is that really bad? But perhaps the drop occurs successively due to the involatility of the KLCI, it felt as if the drop has been long and significant. My view is that while bear has not yet formed, the chance of "final bull" remains unclear. The way to deal with this is as always: prudent investment involving good fundamental stock.