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. ALL INDICES AND STOCKS SHOWN ARE JUST FOR ILLUSTRATION PURPOSES WITH NO BUY OR SELL CALL BUT JUST A PURE EDUCATIONAL THOUGHTS. SUBSCRIBE TO The Three /// Lines Trader Newsletter TO READ MORE**
FBMKLCI Daily Chart
- The FBMKLCI entered into its market retracement since mid of October 2021 retracing from 1,600 psychological level to its lowest at 1,475 in December 2021.
- No major price action void on its Macro Trend Support as the index consolidated sideways and headed for a technical rebound towards 1,567 closing its GAP at 1,559.
- As the index has remain sideways traded in a macro trend since Year 2020 the index will need to trade and maintain above its psychological 1,600 in the coming weeks of Year 2022.
- Being able to do so will get to see the FBMKLCI forming into its Long Term Bullish Uptrend formation which was last seen in Year 2020.
- Downside risk remain low until evidently proven 1,500 psychological support is voided as well as its Macro Trend Support is voided.
FBMSCAP Daily Chart
- The FBMSCAP Index that plays a major role in the KLSE mid-small caps performance similarly has entered into a market retracement since mid of October 2021.
- Throughout its retracement no Macro Sideways Support is being voided and the index has gone for a comfort technical rebound.
- We will need to see the index to trade above its midpoint in order to see even more robust performance on the small caps sector in Year 2022.
- Downside risk remain low until evidently proven its Macro Sideways Support is voided.
New Year New Me New Goals
New Year New Me New Goals for Year 2022, what’s the take for everyone to achieve a robust portfolio performance in Year 2022? Unlearn and relearn. Learn the essence of Technical Analysis as it is not a crystal ball but a tool to assist trader/investor to understand the price action in the financial market and stocks. There are up to hundreds of different indicators in the Technical Analysis and you just need a few to assist. There are no magical indicators as all are just lagging indicators based on price and volume. Hence understand what is price action and most importantly how you can understand the Macro Trend of the past and current trend on the market and stocks. There are only 3 types not 4 types of trend. An Uptrend, Downtrend, and Sideways Trend. Relearn and understand that fundamental analysis is just a tool to assist us. Do no need to dwell deeply into it as fundamental is just reading past news and anticipating for the future. Understand what the smart monies and institution and retail monies are doing in the price action of the technical analysis and from there is where you design your Trading Plan.
Cherry Picking Beaten Down Stocks
- Understand how to apply technical analysis to understand the past and current macro trend of the stock using just a few indicators.
- A stock that has shifted into its Long Term Downtrend formation will remain in its downtrend formation going for lower low over a long period of time.
- A long term downtrend stock is only suitable for short term rebound trades as the price does not fall on a straight line.
- Generally a stock that has entered into a long term downtrend formation will remain as it is until evidently proven a shift of macro trend has occurred. Else a downtrend stock even with fundamental and news will remain irrelevant.
- By then if its macro trend is shifted we can slowly look into them and consider into them and all news and fundamental will be relevant.
- Even when it comes to the darling penny stocks everyone must know what is its past and current trend through technical analysis.
- Do not go for a new year new me and this time its price is back to where it used to be so it is time to invest/trade into it. Surely it may potentially go for a rebound only after all its being flushed down for a year.
- Even a penny stock that has entered into its Long Term Downtrend formation will has its days of rebound.
- Will it rally like how it used to be in Year 2020? When one day you evidently see its price action has lead to a shift of its macro trend into a Long Term Uptrend formation just like Year 2020 then you will know. Other than that it is suitable for short term rebound trade only.
- Even the blue chip stocks that you think its cheap enough could not necessarily be a golden pick in your portfolio unless you are holding it for a very long long term years and in the KLSE market has no other choices out of the near 1000 listed companies to invest/trade into.
- Else similarly even a blue chip stock that has shifted into its Long Term Downtrend formation will take a period of time to recover.
- How long is long? When its price action has evidently proven a shift of macro trend has occurred.
- Therefore cheap does not mean it is a good buy. Define cheap as is it measured by the market price of the stock or the fundamental price of the stock? Everyone has their own different opinion.
- Whether its a Blue Chip Stock, a Mid Cap Stock, a Small Cap Stock, and a Penny Stock, if its in a Bearish Long Term Downtrend formation these are stocks not lucrative to look into unless for doing short term rebound trade. Holding onto them only makes an investor/trader into a very long term investment.
- Certainly one day they might make a come back. That one day is when its price action has evidently shown a shift of macro trend.
Where are the Performance Stocks in the KLSE market?
- Stock’s price action that did not void nor shifted its macro trend and remain in a Bullish Long Term Uptrend formation are all notably a good to go stocks.
- Again it is how you apply your Technical Analysis to understand the past and current trend.
- The trend can either be your friend or enemy. Make friends with your trend if you understand how to pick on and ride onto a Bullish Long Term Uptrend stock. Make enemy with your trend if you insist to choose on a Bearish Long Term Downtrend stock.
- Not hard if you know how to decode.
- Stocks in their Bullish Long Term Uptrend formation but stayed sideways for a period of months or shall people call it a boring stocks. These are the stocks that can potentially perform.
- No price action voided its macro trend. Even shall a reversal occur on these stocks you will know where to manage your losses. Comes back to your Trading Plan. You do not just buy without anticipating for the downside risk. If holding onto a downtrend stock in the long run can go lower low in the long run, then even an uptrend stock can do so when reversal occurs. Hence when it occurs what action do you do?
- The stock market will always play a new set of stocks. Stocks that used to be a superstar stocks might and usually do not last in the KLSE market. Hence either a retracement leads to a shift of macro trend into downtrend, or the usage of Rights Issue, Bonus Issue, and Stock Splits as a way to end their trend.
- Something new is always fresh because the mass investor/trader are not familiar with. When usually the mass investor/trader is familiar with that stock, that stocks usually sky rocket a few folds comes with extensive news coverage to the point everyone get to understand that stock so well and THEN ONLY everyone if not chasing in to buy at the highest is at near the highest and getting trapped in the market cycle of retracement again.
- Hence learn to apply Technical Analysis to spot for newly formed Bullish Long Term Uptrend stocks. Always learn to buy and accumulate at the early start of the trend and sell at the peak of the trend.
- Stocks that did not perform in a robust manner in Year 2020 and Year 2021 could potentially be the new superstar.
- Certainly through the application of Technical Analysis you will always see what we been painting to you all these months.
- Which is knowing how to apply and understand the past and current trend of the market and stock.
- Therefore every year there will be news headlines on “Market Crash”. As the financial market is drive by the emotions of Fear, Greed, and Hope, news are just one part of it to trigger these set of emotions.
- There won’t be so many market crash every year. There are only cycles in the financial market which is a market rally and market retracement.
- To score, is to know how market timing works and you can understand all of these through the technical analysis.
- To score, is to understand the current health of your stock’s price action and its macro trend instead of their fundamental much.
- To score, is to always know that the stock market is just a game. Either you know its just a game or you are gamed.
- Have a very robust year of investing/trading in the KLSE stock market and may the Year 2022 be a robust wonderful performance for the KLSE market.
Year 2021 has been FABULOUS and Year 2022 will be ROBUST!
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