Nuclear energized bull?
Can the CI go higher beyond 1350 in the short term? Should we buy in now? Should we sell and buy back later?...All these questions are lingering in everyone's mind...even the best financial analyst does not dare to commit anything to it's clients...so since fundamental strength will not affect a stock's movement in a blink of an eye, for traders I suggest we go back to basic TA for direction... A simple summary deduce from the chart indicates that the bull ride is about over...DJ hits all time high few days ago...S&P is not that impressive...Oil prices is rising high and a potential shortage of supply is imminent...
Remember, what goes up will come down... Again, some may say election is coming...so KLCI should stay high to give a 'feel good' factor... but I personally believe the election won't be in the immediate term for sure. Trade wisely if you must...else go back to the rule of thumb..."Buy when the rest is selling and sell when the rest buy..."
4 comments:
Toebear,
I would disagree that basic TA would encompass the following:
-DJ hits all time high few days ago
-S&P is not that impressive
-Oil prices is rising high and a potential shortage of supply is imminent.
-Again, some may say election is coming
DJI reach all time high - yet again while our market lagged behind. Normally there will be a pullback. As previously seen, there would be a pullback. but correction would be sometime later.
Using a Fib method, Previous high less previous low
12,796 - 11,940 = 856 pts
856pts
@123.6% = 1058pts
@138.2% = 1183pts
@150% = 1284pts
@161.8% = 1385pts
11,940
+1058pts = 12,998 - note 23/4
+1183pts = 13,123 - note 26/4 spinning top - may have pullback soon.
+1284pts = 13,224
+1385pts = 13,325 - this would be the normal target used by Fib users.
Oil should be reflected in the charts already although O&G could potentially gain more still. Election should also been reflected in charts.
I would not advise jumping in or out. Best is that entry have already been made - and trailing stop be activated to guard against the worst - should it happen, as always. :)
Maxforce,
Don't get me wrong. When I said go back to basic TA for direction, that's just about it. The subsequent statements are just additional info/situation that we're currently in at the moment i wrote that article...:)
My main reason of this article is to serve as a reminder to traders/investors who have started to 'float'... merely to knock some sense into anyone who needs them.
No doubt Fibonacci does provide sort of like a 'frame' guidance, but remember that it cannot stand alone... we normally use other tools to supports or provide directions..
For traders fibonacci hardly helps much....in addition, Fib analysis only works when there's no external market force driving the financial market...
And most of the time Fib seems valid mainly because many traders artificially creates support and resistance levels to control the market.
When I said about imminent oil price hike, it's actually to serve as a reminder for a shift of portfolio stocks to O&G sector...
In fact you're the only one that seems to be interested in analysing my blogs apart from my 2 friends jim and smurf... :)
In short, major purchase window is over, now it's selective time.
Max, thanks for sharing your thoughts... it's my pleasure to gain knowledge from you.
Toebear,
Oops, sorry if I misunderstood your points. After your explanation, it sure is clear now. :)
Fib to me helps to identify critical levels, but as you ve mentioned, it should not standalone. Other indicators, such as candlestick or oscillators would help.
As for O&G, I made my entry previously into Kencana and Scomi brothers. Scaled out started right before the holiday and most of it today.
I do believe that it is still good for long term holdings but my small capital base could not be tied.
I would agree with you that "major purchase window is over, now it's selective time" - this would be most suitable to intermediate term players while short term traders should beware of potential harsh winter.
Pleasure to learn from you too. :)
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