Tuesday, June 23, 2009

KLSE:KNM 090623

Stock market is exciting again ... :)

Observe below that on 8 June, all the big guys are dumping KNM ... guess what ?

8 June also marks the END of KNM up trend which has been going up since March. Then the trend finally broke the support line on 15 June and trumbling down. Why do you think they bulk sell on that day ?

The next support line is 0.75 as shown above supporting by 7, 18 and 22 May. This support line is actually touched TODAY at 11am ( see below ) and instead of breaking it, it bounced back all the way to 0.825, that is 10% jump in a day.

Because of this sudden 10% jump, Stochastic 14-3-3 shows a Buy signal by EOD. The signal will be stronger if it also cross above the 20% line tomorrow.

MACD 26-12 however did not react. Half day rebounce does NOT really show a True rebounce. So it may take a few more up days to see effect in MACD.

On the other hand, if 0.75 is really broken, the next support line seems to be at 0.55 which is a 27% drop.

The ceiling is 0.95, also a 27% raise. A 50-50 win-lose ration is kind of a 'good bet' for speculators, thats why strong rebounce is observed today at 0.75

Speculation wise, what to do now ?

bought some today : Keep and wait for 0.95 ceiling, but also keep a trailing profit at -3%.
haven't bought yet: You still can get in below 0.84 for this short term speculation

Long term investment wise, don't forget KNM is worth buying below MYR 1.10 and it should give you 15% compound return for the next 10 years where its price will hit above MYR 2.00 during next10 years period.

KNM is one of the very few financially very sound businesses but with a lot of fishy smell ( see 1st paragraph above ). Its one of the few golden reference points if a financially sound business can make it or will it flop like some developed country's business. However, as long as Petroleum is in demand, I don't forsee KNM turns into Oilcorp in any near future.


alantanblog said...

I love & hate this KNM stocks! :D

Michael Tsen said...

ha ha, that is why she has been top pick for so long, it is good for both long term investment and yet speculatable.

Anonymous said...

I see the KNM chart commentary using Stochastic and MACD. But seriously did u ever make good money using Stochastic and MACD. And u are using it exactly like what many books say.

If like that many people who use Stochastic and MACD like what the books described then everyone will be very rich if not super rich.

You can read, I can read and everyone can read. Where's your competitive advantage?

Michael Tsen said...

actually macd and stocha is great for USA stocks because most investors there use that. In malaysia, it has NOT been working yet. Simply because MANY malaysia investors are NOT using them yet.

In malaysia, use the trend methods, especially on horizontal line as support or roof, it has been working great since at least 1 year ago ... ppl who use technical is increasing .... so I am guessing in future, macd and stocha 'may' become more useful oneday ...

Anonymous said...

Seriously if Michael Tsen when you say like that, I don't mean to personal attack you.

I know you never really make big money in stockmarket. What I mean big money I mean few hundred % of return in a given bull market that can last from between 6 months to 1 year in a multi year uptrend.

You tend to make some lose some, in the end wondering at the end of the bullmarket, how come stocks go up by few hundred % but I make not that much, etc.

The chart works across stocks from all countries, forex and commodities.

If MACD and Stochastic works in US they have to work in Malaysia also.

But, even that MACD and Stochastic also don't work well in US. Take Citigroup and AIG chart as example.

What I am trying to say here is majority of people know charting from books and learn it on the surface and I can assure you there's no competitive advantage here.

If everyone can do the business the business is hard to do I am sure u guys know that.

Michael Tsen said...

u r rite I dun make big money from stock market, I just make enough meeting my needs

each TA carries a meaning, ie. oversold, under bought etc. When a signal shows, it mean something. However, an oversold signal does NOT mean you HAVE TO buy. It is just an additional info for you to consider in your investment. If a company has been oversold because their boss die then you may need to wait till seeing the new boss's capability. if the company was oversold because of a rumor of losing a big project while the project is only 5% of the company's sales, then you can rush in like mad dog ... etc.

apparently people in developing country who first touches on TA, people expect TA to make decisions for them. Thats why there is a miss-conception that if it works, it will work for all ... but the fact is, each TA indicator will work for a 'certain' situation and up to now, there is NO single indicator that can cover for ALL situations ...

so an indicator will work for ONE stock sometimes but will also FAIL for exactly the same stock on another time

if one is base solely on TA in stock investment, then he is only quantifying his gambling technique. ... which in malpf's claim, is only slightly better than gamble ....

Michael Tsen said...

you will eventually see some people makes big money simply by using TA only which others not. You will also see only 10% of them can earn consistently using TA only.

competitive edge is when you APPLY what you learn CORRECTLY and NOT simply execute as you were told. You and I can both learn Moving Average from the same source, but I guarantee the ways we use it will be very different and therefore ends with different results.