A level of important trend formation when once formed tend to persist until evidently proven reversed. A bullish trend allows price to move higher highs and higher lows over a long period of time.
A level of important trend formation when once formed tend to persist until evidently proved reversed. A bearish trend allows price to move lower highs and lower lows over a long period of time.
We came a long way from seeing the Malaysia FBMKLCI falls into a Bearish Downtrend since the month of March 2019 witnessing the index going lower low for the next 3 months. A recovery started in the end of May 2019 and the good news is the FBMKLCI broke out of its minor resistant and is about to see a Bullish Uptrend formation while keeping its support intact. As the FBMKLCI still generally falls in the long term downtrend formation, It will be crucial for the FBMKLCI to test its Major Resistant which is at around 1,680. But most importantly a Bullish Uptrend formation is rare to be seen on the FBMKLCI which happens twice in a year only.
Hence are you scoring in your stocks?
Stocks that falls into a long term downtrend category does present buying opportunity for the short term rebound trade. Just like the FBMKLCI falls under a long term downtrend still need to do its work to test its major resistant at least. For stocks they too need to test their major resistant before deciding for the future trend movement in the long run. Stocks that falls into a long term downtrend will present bullish uptrend formation if you can spot them and trade on them. Their destination? Towards the Major Resistant.
How about stocks that falls in an long term uptrend formation?
Stocks that falls in the long term uptrend formation will always be the right choice of stocks to own in your portfolio. Certainly all of these are just for studies purposes with no buy nor sell calls made. Stocks that trade above their long term major resistant will turn into a major support when it comes into a long term uptrend. They may be consolidating for weeks but when price action kicks in that is where their rallies resume. Hence know where to position your entries into these stocks and ride on their rallies. Their downside risk will always remain simple which is to look a their minor support and major support. Once these 2 supports have been violated and you still insist to hold onto this stock = that’s your problem not the stock’s problem!
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