You’ve got to know when to hold ’em
Know when to fold ’em
Know when to walk away
And know when to run
Every trader knows
That the secret to survivin’
Is knowin’ what to throw away
And knowin’ what to keep
**ALL CHARTS SHOWN AND WORDS WRITTEN ARE ONLY FOR ILLUSTRATION EDUCATIONAL PURPOSES ONLY. SUBSCRIBE TO THE Three Lines Trader NEWSLETTER TO READ MORE**
Malaysia FBMKLCI Bullish Performance
- The Malaysia FBMKLCI sideways traded since January 2021 before shifted into its Mid Term Trend Bearish Downtrend formation in the month of January 2021.
- After 7 months of sideways retracement the index has been holding up above its psychological support of 1,500 well.
- Recent movement on the index led by the banking stocks performance has led the index forming its Mid Term Trend Bullish Uptrend formation soon which was last seen in November 2020.
- The FBMKLCI will need to trade above its level of Midpoint Resistant in order for all its trend formation to form completely. This could lead by all the banking stocks over the next few months.
- As the index does not move up on a straight line, it will face its retracement as it reaches its midpoint resistant before resuming upward trending.
- Key psychological support of 1,500 will remain as an important point for the index to hold up in the long run.
Malaysia FBMSCAP Index Bullish Performance
- The Malaysia FBMSCAP Index that measures the performance on the KLSE small caps stocks has been the most robust index performance among the indices to date since Year 2020.
- Recent retracement occurred since May 2021 as its Mid Term Trend shifted into a bearish downtrend formation, the index has been in a retracement for 4 months. Only selective small caps continue to perform but in general are all undergoing a price retracement.
- As the index has been consolidated sideways since July 2021 without breaking lower low it has found its support with a recent breakout of its resistant the index is going to form its Mid term trend Bullish Uptrend formation soon. Does this lead to more robust performance from the FBMSCAP index?
KLSE Technology Index Bullish Performance
- On sector indices wise the KLSE Technology Index is the best performing index since Year 2020 to date.
- As the tech index entered into its Mid term trend bearish downtrend formation since May 2021, tech stocks had all undergone their 2 months of price retracement.
- July 2021 is when a seen of trend shifted on the tech index into a Mid term trend bullish uptrend formation as since then tech stocks have all been taking turns to perform. Certainly all stocks requires meeting all their technical requirements. It is only a downtrend stock vs. an uptrend stock.
- As the KLSE tech index is currently hovering at its 20years resistant high the tech stocks continue to show more legs running towards their performance. Always know when to buy and most importantly when to sell and avoid chasing high.
KLSE Industrial Product Index
- The KLSE Industrial Product Sector Index is second best performing sector since Year 2020 to date.
- Entered into a retracement since June 2021 when its Mid term trend shifted into a bearish downtrend formation and retraced sideways for 3 months.
- No lower lows seen on the index as recent price action has break out of its resistant now forming a shift of Mid Term Trend into Bullish uptrend formation.
- Industrial products stocks about to perform? This is where you do you part of homework.
- All boils down to technically whether the stocks matches the technical criteria besides fundamentally.
Avoid Speculative Stocks
- All these speculative stocks are short term nature. Avoid trading into them unless you know how to buy low and sell high in a quick manner.
- Always know how to identify what is called a rallied high stock and make use of simple ‘Benchmark Neck’ as a guideline to know once a price action voided that support, it means a retracement.
- Do not go cherry pick because it is cheap and because it used to get speculated up high.
- Even a rallied high stock will naturally need to go for its retracement.
- After all big hands uses cash to buy into the shares and as the price is rallied up high they are just holding shares. In order to realized the profits they will need to sell their shares to turn it into cash.
- Hence do not go for hindsight analysis seeing stock’s chart rallying up high looking beautiful and you jump into the wagon and getting trapped.
- Learn to buy low and sell high.
Understand what is a Beaten Down Stocks
- Understand how to make use of technical analysis as a guide instead of reading and listening to rumors and news.
- Stocks that used to be a darling stocks will eventually end up being a sleeping beauty in the long run.
- That is where we make use of technical analysis as a guide to understand when a trend has shifted in its mid term time frame and most importantly if its long term time frame trend has even shifted = it has entered into a long term bearish trend becoming a sleeping beauty.
- Cheap does not mean its lucrative as you will end up holding onto these stocks in a very long run putting it at your museum for display only.
- Disaster occurred when an index/stock’s price action breaks down its macro trend support, If the consensus chooses not to buy to support, why do we chase into a beaten down stock as it gets cheaper and cheaper?
- Even stocks with or without fundamental, with or without catalyst, understand what is a beaten down stocks by knowing how they trend has shifted into a long term bearish trend.
- A long term bearish downtrend stock is only suitable for short term rebound trade as it does not move down on a straight line after all.
- But generally the usage of technical analysis allows to guide us on knowing what is the past and current trend of that stock.
- Until it has evidently proven one day a shift of trend has occurred, it will never be to late to look into that stock. Instead you will probably will choose not to buy into.
- How good a stock used to be in the past does not mean it will last for many years. After all know that the stock market is just a game. Either you know it is just a game or you are the game.
- Understand when a stock shifted its Mid term trend into a bearish downtrend formation is where you avoid holding/buying into such stock as you can only sell.
- Understand when a stock could not even support at its Long Term Trend and voids it, disaster spells out as the consensus chooses not to buy to support. Hence why do you choose to buy as it gets cheaper and cheaper?
- A Bearish long term downtrend stock is only good to put at museum as it has turn into a sleeping beauty.
- Until evidently proven one day a shift of trend has occurred starting from its Mid term trend formation followed by its long term trend formation, then only this stock will eventually starts to awaken from their beauty sleep.
Understand what is called a Performing Stocks
- Stocks that did not void their long term trend support can only mean the consensus agrees to buy to support.
- A long term uptrend stock does not move up on a straight line but consist of rallies and retracement.
- That is where the Mid term trend formation comes to usage.
- A shift of trend into a mid term trend bullish uptrend formation is when the stock is going for a rally mode.
- Buy as it happens not after it rallied for days to weeks and you chase in high.
- Have a set of trading plan to know when to profit take and have a trailing profit.
- As the banking stocks will be the biggest force to push the index, banking stocks that have all previously fallen into their mid term trend downtrend formation has now all shifted their trend.
- More importantly these stocks remain in their long term trend bullish uptrend formation hence in the long run they have more upside than downside unless evidently proven their trend has shifted.
- As the banking stocks did not show any robust performance since Year 2020 during the pandemic crash, they remain traded fairly at a low volume.
- Most importantly nothing has ever being voided yet and hence all have stated to form back their Mid term trend into bullish uptrend formation.
- They may not move up on a robust manner but rather gradually and this helps the index to pave its way into a big macro shift of trend in the long run.
No stocks to buy in the KLSE market? Just don’t fall in love with your stocks.
- Know how to make use of technical analysis to guide you towards understanding the past and current trend of your stock. No stocks to buy in the KLSE market is fairly due to you been holding into stocks that have been beaten down and turn into a sleeping beauty.
- Never fall in love with your stocks as you need to know when to Hold’em and most importantly know when to Fold’em when it reaches your trading plan’s profit taking level or it did not happen as per your trading plan that you need to execute your stop loss.
- Stocks that has entered into a retracement for the past 4 months but did not void their macro trend and instead form back a shift of trend into Mid term trend bullish uptrend formation stock are all stocks that is worth to look into as the consensus chooses to buy into more.
- Always learn to buy a stock while it is sideways and below its midpoint resistant.
- Learn less on choosing stock that has rallied for days to weeks and then only you decided to jump inside.
- Know what is buy low and sell high and know how to make a foresight analysis using your trading plan.
- Learn how to make use of simple technical analysis and simple mathematic as a guide in your trading plan.
- Understand what a price action is and how a midpoint resistant is derived.
- Know that accumulation is always occurring during a sideways price action.
- Know that a distribution is always occurring as the price is rallying up.
- You position into when nobody wants but you see it on a foresight analysis.
- You position OUT when everybody wants but you reached your target profit zone to take action.
- A rallied high stock will naturally go for its retracement. During its retracement is where we know how to spot using the mid term trend.
- You do not buy into a stock while it is in its retracement mode unless you are enjoying losses more than profits.
- You buy into a stock when its mid term trend has shifted into a bullish uptrend formation.
- You know when it will perform when its price action crosses above its midpoint resistant. Thus you know your cost price level is at where followed by your stop loss being at minimal.
- A rallied high stock that naturally enters into a retracement can last for many months.
- But as it eventually found its consensus support of buyers it will naturally forms a shift of its mid term trend into a bullish uptrend formation.
- That is where you start to look into this stock.
- Not all trades are a guaranteed trades. That is where a trading plan comes to play as even if the price reverses as per your expectation you will know where your stop loss is which is at minimal.
- Trading/investing requires patience and discipline. Great price of work occurs over a period of time not a matter of days.
- Knowing how to define a performance stock VS a beaten down stock saves your time knowing what is the current condition in your portfolio.
- Know that there are market noises everyday that causes daily fluctuations on the stock’s prices.
- You don’t get shaken out easily if you are able to understand and identify the past and current trend of your stock.
- You don’t get panic when you know what your trading plan is based on your chart.
- If things are going according to your trading plan, let the price do their work.
- If things are not going according to your trading plan, stop loss hit = you get rid of that trade.
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