Sunday, 28 October 2007

Things That Make You Go Hmm...

Lest you be thrown off track, this entry has got nothing to do with charts nor with trading. It's also something to keep things light.

This is just something that's always been running through my head for some time now. Don't you get amazed with how man is able to come up with so many adages that it's come around full circle that he already contradicts himself?

Case in point, you've always heard the saying, "practice makes perfect". You've also heard the saying, "nobody's perfect". So what's the point of me practicing when there's absolutely no chance that I'll ever be perfect?

I'm sure that during the Christmas season, we've always heard people saying, "'Tis better to give than to receive". I'm sure professional boxers and wrestlers would agree with that saying. There's also the other saying, "Give till it hurts". That one must probably come from the taxman. Put the two together, and it'll really make you think twice.

One of the sayings I like comes from Bill Cosby, "A word to the wise ain't necessary -- it's the stupid ones that need the advice." How true...

Saturday, 27 October 2007

PERColator and some TA

This has got to be one of the most overlooked issues in the local market. I wasn't in front of my monitor when I got a call from my broker to tell me that PERC has broken out. Being a technician, my usual questions are never, "Why? What caused it to go up?" By the time I'm satisfied with the answer to that question, it would be too late for me to ride the boat. Anyway, the only questions that matter when I didn't notice this was:

1. What did it break out of?
2. What is the proper buying price?
3. What is the target?
4. What is the cut loss?


Turns out that PERC broke out of one of my least favorite patterns: the rectangle. It's so unpopular with me because you have no idea when this thing will make a move. Add to that, the volume won't follow any textbook definition on how typical volumes should behave in this pattern. You also don't have an idea when it will break out.

After I checked the chart (which was way after I bought this at 12.50), I saw that the resistance of the channel was 11.75, therefore the proper buying price was 12.00. The target was pegged at 14.50. The cut loss would be at 11.50, if I were to follow the concept of role reversals.

Too bad, I didn't see this earlier or I would have been able to act on this immediately. Another stock that came out from deep slumber was TA.


Some said this was a cup w/ handle dating back to 2005. I would agree about the rounding bottom from 2005 up to June of this year. I'm just not so sure about the handle.

Regardless, TA made a major move yesterday to break the resistance of 1.82. This was accompanied by the heaviest volume since July 2005. The target for TA, should it continue moving up, is 2.75 otherwise, be ready to cut your losses at 1.80.

Everyone's looking to cash in on oil...

Monday, 22 October 2007

Just Do It!

I'm not endorsing any athletic shoe brand just because of the title. Besides, they're not sponsors of my blog.

Kidding aside, today's trading day was one that called for a definite kind of action. Knowing beforehand that we were gonna be hit by a double whammy of sorts, the trader in me was shouting, "Just do it! Cut your losses, you @$s!" The question was at what price?

Of course, there is always the possibility that when we sell in the first 30 minutes of trading, we could be selling early. Then again, the other side of the coin may say that you're going to get hit with a bigger loss if you don't sell now.

This was a case of selling, whether right or wrong, and sticking to your decision. There are no regrets in selling today. It could be worse. Therefore, I was determined to be liquid despite what's happening. Whether I'm right or wrong about selling is now beside the point. If you don't want to be another statistic, the best thing to do now is to be liquid.

I will just return when things break out of another formation. Hopefully, with a vengeance!

Saturday, 20 October 2007

Top 5 Reasons to Use TA

Ever wondered why there are more people using TA? Wonder no more, here are some of the reasons we compiled from different people:

5. I used to be greedy. Now my greed is justified by the charts.

4. We are firm believers of the daw theory. Sabi DAW kasi ni pare aakyat ito.

3. Everyone calls us crazy. At least we're more accurate than them.

2. We don't hate fundamentalists. They have all the reasons to buy a stock. When it's time for them to buy, we're selling to them for a profit.

1. TA is essential to trading: Tsismis Analysis.

Wednesday, 17 October 2007

AT Last, It Looks Bullish

A lot of people have been making lots of money out of mining issues. But one of the older mining companies has been overlooked. AT has been quietly forming a bullish reversal pattern.


As we can see from the chart, AT is nearly finished with forming the inverse head & shoulders, which is bullish. However, there is no breakout from the neckline just yet. It hasn't even finished the right shoulder yet, so hold your horses.

What we're waiting for is a break of the neckline, currently at 16.50. So I will want to ride this at 16.75 with the target set at 23.00. Cut loss would be set one fluctuation below the neckline. Keep in mind that the neckline gradually decreases while AT doesn't break out yet.

Looks like this is what I will exchange my ELI for as it has returned to the support of .80. Damned stock...

Thursday, 11 October 2007

It's Worth the Wait

After prematurely getting into ELI the other week, a case of being in limbo happened. Thinking that it was already breaking out, I got in at .80 and waiting for .87. While waiting, ELI's pattern became a flag from a pennant, which is still essentially the same but the resistance and targets have now changed.


The resistance has become .80, so a proper buy was at .81, with a target of .90. It sure took its damned time before breaking out. I was already thinking maybe this flag has fizzled out since it took longer than usual to break out.

Yet, after waiting for longer than the normal amount of time, we tarantraders are gifted with a breakout yesterday. ELI ended at .83 with a volume of 55 million shares. Could this be the start of a new trend? It's very possible. That, notwithstanding the news of ELI issuing stock rights at par value.

What would that mean for ELI? The fundamentalists say that in order for any stock to issue rights at par value when the price of the issue is below par means that the stock has to be pushed to par value and beyond to make the rights attractive. Of course, that's the other view to this of which, it may have some logic to it, yet some speculation too.

So what to do with ELI after holding it for some time? As I mentioned in my earlier post about being in trading limbo, we wait. The target is coming, or we get stopped out. It's that simple.

What to do when in Limbo...

There we are, like a sprinter readying themselves up for a big race. Get set, ready, GO!

And we're off buying a new stock on breakout! Then what? That's the big question now. Patience happens to be a virtue every trader must have when entering any position.

Everyone wants to make money immediately. Who doesn't? However, the true test of character of a trader is not when they make or lose money but when they're in a position which has neither reached target nor met the stop. In short, you're in trading limbo.

There are a number of options that present itself to the trader: look for a faster moving stock and dump the current one, hold it until thy kingdom come (or it reaches target, whichever comes first), sell the sucker and never come back.

Let's talk about the last two first as these are easier to tackle. Hold it until thy kingdom come means you bought, you're waiting, yet the stock doesn't go up and it doesn't go down. Patience and character are being tested here. Are you disciplined enough to wait for your target to get hit and get out at that price? Are you disciplined enough to sell when it hits your stop? If yes to both questions, you may have to be a poor clone of a random walker who has bought and is now holding.

Sell the sucker and never come back. You either can't wait or you just don't want to wait. Therefore, selling a snail of a stock seems to be a logical reason. This way, you already eliminate the process of waiting. Time is gold, man!

Now the last: look for a faster moving stock and dump the current one. First of all, searching for that faster moving stock is like playing roulette. With so many options, which one will it be? Dumping the current stock may seem like a good idea in order to make your fund more active. Then again, I've already had the experience that the stock moves AFTER you just sold. You then become an indicator for other people. This one will give you anguish and it might haunt you for a while.

So what do you do when in limbo? Do what the others do. They wait...and wait...and wait... until you get sick and tired of waiting.

Personally, I would go for waiting for my target. Unless a faster moving stock suddenly presents itself.

Tuesday, 9 October 2007

LND Sakes!

Many were bullish with LND around a month back. How quickly the tides have turned.


Based on what we see on the chart, it is now caught inside what is known as a diamond. The start is quite volatile with volume increasing then it is consolidating in a symmetrical triangle with diminishing volume. Getting the base for this, we get a downside target of under 70 centavos. Of course the ride downwards won't be one straight line.

There will be supports at 1.16, 1.04, & .90, respectively. Once those areas have been broken, then we might see some sort of a bungee jump...without a cord.

LND HO!

Monday, 8 October 2007

Don't You Just Hate Flying Blind?

There are are just some days you can't avoid, like today. Normally, we get to monitor the action in the market during the mornings. Unfortunately, due to some office errands that need to be addressed, that takes precedent over my trading. It's come to a point that you can't do without watching the market action as part of your daily routine.

It's a good thing my broker keeps me updated regardless of my account size. So kudos to you mickymac!

Unfortunately the same can't be said for the US market...

Thursday, 4 October 2007

ELI-vator, Going Up?

Thanks to the Taipan for showing this to me. If you noticed lately, many property issues have been on the move. FLI, MEG, LND...name it and practically all the tradeable stocks in this sector have been climbing. One exception has been ELI.

As we can see on the chart, after it went sideways for some time, it dipped and has come off the lows. Now the fun part. It now shows us that it has formed a pennant.

With this, we see that our resistance for the pennant is pegged at 78 centavos. Meaning at 79 centavos, this is a buy! Target is projected to be at 87 centavos. Sure it seems small, but if this can be achieved in just a matter of days, wouldn't you want to take it? Cut loss is at 76 centavos.

Any takers?

If I Could Only Kick Myself...

Remember my post before on PAYX being bullish? I was too fixated on seeing this go up, that I already overlooked a reversal in the making.

A head & shoulders has formed and when it broke the neckline, it went down with heavy volume. All the while I was still in a bullish mode for PAYX but I needed someone to point out what was happening. Unfortunately, this was after the fact already.

Strike another one for the loss column.


Tuesday, 2 October 2007

R.I.P. NI

All good things must come to an end. And so today was the day those that had NI should've sold, unless they planned to be an investor.

Many of you will wonder, why sell? The momentum is still there isn't it? Friends, if that's what's running in your mind, it's your greed talking to you. And greed won't have served you well today.

Technically, NI was a sell when it broke the short term support today, which was at 21.25. Once it reached the high of 21.25 today, which was where it opened, it was all downhill from there. The low for the day was 17.75 and many who still hold this are probably wincing in pain when they saw the low.

Today definitely was a day that NI holders sold as seen in the increase in volume. Logically, the time was ripe as those who bought below 20 were ready to unload. On the other hand, those who were stuck above the 20 peso level since a few months back, were also unloading, minimizing their losses.

Whatever the case, today's action was definitely bearish. We're not saying NI won't go back to the 20 peso level. What we're saying, you should check your greed at the door and use your head to trade not your heart. When you saw the price was dropping like a brick, it was a seller's market, and you had to go with the flow.

So for now, rest in peace, NI.

Monday, 1 October 2007

How Now NIhao?

Today's trading was minimal to say the least. However, the expected consolidation for NI's 2nd flag sure looks irregular. You see, normally in the local market, when a flag consolidates, the allowance given for its resistance is one fluctuation, either higher or lower, than the previous day's high. Today's high of 20.75 is 2 fluctuations higher than Friday's 20.25. Then again, this is more acceptable than the consolidation that happened last Wednesday.

Momentum definitely is still here but the big question is how long will it last? More importantly, how far can this go up? I'm not one to dwell on how far I can make my margin stretch therefore I'm now in a mode where selling can happen anytime.

How about MIC? Definitely this one doesn't have the torrid pace set by NI since two weeks back. Yet, it has a hard time surpassing 6.60 which used to be where the 65MA was. What is sure is that the 65MA is now below 6.30, so we can see support at this level. It remains to be seen if 6.80 can be reached.

This may be the one of the last times I will talk about NI as its nearing the end of its run. I'll probably get back into this when it shows a new pattern that we can play.

Are you ready, NI? Are you ready, MIC? LET'S GET IT ON!