Talking Stock With The Doc

FKLI Doji Evening Star - Correction Again?

noreply@blogger.com (Dr. Siva) — Thu, 15 Feb 2007 16:50:00 +0000

Just a short post. I noticed a Doji Evening Star at the close on Thursday. Could be a sign of indecision or correction because it opened with a gap up & then a perfect Doji. Confirmation is only if the futures opens below 1260 & stays below it in the morning. If it opens above this or goes above this then the doji is invalid. It is worth shorting the market with a close position if it goes back above 1260.

The Doc is Back

noreply@blogger.com (Dr. Siva) — Thu, 08 Feb 2007 17:51:00 +0000

Hi everyone,

Yes I am still alive & kicking. Been very busy as I left UK in Oct & am now back in KL. The transition was a busy period & I also started on a major contract immediately when I arrived, so that has kept me busy. Unfortunately I am still very busy so will only post occassionally & that too only on the CI & Futures, sorry no time for stocks.

I have been following some of the postings & am very pleasantly surprised that we have a very active Futures Blog here despite my absence & none of the other sites have it. Hahaha someone once asked on the chatbox if I was still alive & Isaac was wondering why I am MIA for so long. Sorry guys just busy with work thats all.

The reason for my posting is I think the market has reached a peak & will probably correct very, very soon if not today (Friday), then it will definitely fall after CNY. The magnitude of the fall is hard to tell but probably it will correct to one of 3 levels (See the 3rd chart):
A - Fibonacci retracement 0f 23.6% i.e. Jan 2007 low of 1,164; or
B - Fibonacci retracement of 38.2% i.e. Dec 2006 peak of 1,103; or worse case scenario;
C - Fibonacci retracement of 50% i.e. Dec 2006 low of 1068 to 1080.

The reasons why I think it will fall are:

I see a Hanging Man pattern at a high resistance of 1,242 yesterday. Next resistance is 1,278 but its possible that will not be reached. If it is then that will be the high point.
In the Futures Vol has been falling despite index rising - such divergence is indicative of possible correction
There is also divergence bet Futures Vol & KLCI Vol, one is falling but the other is rising to record highs. It is not good to have such divergences esp. when we are reaching record highs.
There are far too many good reviews & mega predictions by all kinds of analysts recently. 6 months ago no one had a good word abt Bursa, now everyone, his uncle & the monkey are saying such great things. Either everyone was blind & just got back their vision or they are all bullshitting us & talking up the market so that their clients can sell high while all the poor uncles & aunties are jumping in. Generally this has happened at ALL market peaks from the 1980s to now (I am old enough to have seen it all). This is a sure sign that the current bull run is going to take a major correction. I have fallen for the BS before & lost everything I made in the run, so I am now older & wiser.
Finally all the uncles & aunties are at the brokerages buying everything in sight (hence the high volumes). When that happens, you can kiss goodbye to the market.

Well here are the charts, but make up your own minds, do your own homework, be very vigilant & careful. Happy Trading & good luck.

Stock Updates - All Positive on the Bursa front

noreply@blogger.com (Dr. Siva) — Thu, 12 Oct 2006 23:32:00 +0000

All my stock picks are doing well & should all rise Friday & this coming week. The only one that didn't do as expected is Cymao but as all indicators are still +ve I believe it will also come good.

Cymao is the only stock that didn't do well Thurs with a 4 sen fall. Despite that it is still above the 7-day MAV & all other indicators are still positive. This is just a temporary blip, I expect it to continue rising again after this.

Hiapteck - after 3 days of correction Thurs saw a bullish engulfing candle. Nice formation & all other indicators are still +ve. Needs to break 1.00 to continue its bullish moves. I expect it will do so today.

Leweko is looking very nice indeed. All signs +ve so it should continue its rise.

Permaju also looking good. Indicators all +ve. Resistance is 0.50 & a break above this will be very bullish. Nice stock to buy now.

Priceworth is moving up again as expected after 2 days of correction. It should continue rising strongly as all indicators are looking good. Vol also picked up Thurs.

Sime Engineering undergoing short minor correction but all indicators still +ve. Will resume up moves after minor correction. No change to charts.

Utama broke out of the resistance at 1.23 on higher vol. As expected the stock is showing strong momentum. All indicators are +ve. Next resistance is 1.37 but it must hold above 1.23 for the next 2 sessions, then I am confident 1.37 will be reached. Nice solid stock. BTW RHB is also +ve.

KLCI & Futures - Breakout?

noreply@blogger.com (Dr. Siva) — Thu, 12 Oct 2006 23:20:00 +0000

KLCI broke the 970 resistance today on increased vol. All indicators are positive. No sell signal yet even though its on a 6 year high. Next resistance is 984 & after that 1,000. Dow Jones closed up almost 100 points to a new record high. Asian markets will probably respond positively & a rising tide will mean all ships will float higher so KLCI may go for 984. After that we only have one week of trading next week before a 3 day closure of Bursa for the Hari Raya hols & we may see the pullback only after Wed next week. Today should be an up day.

Futures rose even higher than the CI today. All indicators looking better so it may continue rising too with resistance at 990.

Stock Updates

noreply@blogger.com (Dr. Siva) — Wed, 11 Oct 2006 19:42:00 +0000

Leweko - Still rising with mild corrections intraday. All indicators are positive but MACDH looks like it is at a peak. We still cannot call it 'the' peak so unless there is a fall its still positive. Many other timber/plywood stocks have risen especially the bigger blue chips Ta Ann & WTK, the smaller stocks should follow suit as the industry is fundamentally doing well.

Priceworth - despite the big correction after the large white candle on 6 Oct, indicators are still good for PWorth. In fact the correction may have been overdone & it should rise again soon. Its actually looking very good on the indicators. The low volumes are not a bad sign at this stage.

Cymao - is still holding steady. All signals still +ve. It should resume its rise again soon like other timber stocks.

Hiapteck - looks like it is turning weaker. 0.94 & 0.91 are strong supports & if they break then its going to turn bearish. I would sell at the break below 0.91 which is also the mid BB line. On a weekly basis it is still positive so the intermediate trend is positive but short term there is weakness. Long term holders should not sell yet but short term traders have to watch the 0.91-0.94 support & sell on breach. MACDH & DMI still +ve, MAV are also +ve & prices have not even fallen below the 14-day MAV, so we should not panic just bec prices have been falling. Just watch the support levels.

Sime Engineering. Mild correction but its staying above the 1.51 resistance turned support. All indicators are still positive & strong. Volume could be better. Still a hold as upside is still good.

Utama - is still positive. All indicators still ok. 1.23 is a strong resistance. As long as prices do not break below 1.15 Utama will remain strong & can break out of the resistance. Personally I think this is a good stock hold until the M&A issue is sorted out. It should remain quite steady until then.

KLCI & Futures

noreply@blogger.com (Dr. Siva) — Wed, 11 Oct 2006 19:32:00 +0000

KLCI - is still quite steady. Volumes are getting better & all indicators are still positive. However if it does not break 970 soon the bulls may get exhausted & give up temporarily. I cannot make a call at the moment so we shall just have to watch it for further signs. Dow Jones slipped slightly but it is still looking steady. Nothing to do but wait.

Futures are slightly weaker than the CI. The 7-day MAV has dropped below the 14-day MAV but prices remain above both these MAV. ADX is getting weaker & DMI is getting flat. H'ever the BB is narrowing & while index is still in the upper channel, something is bound to happen soon. If it narrows further there is a good chance that it may suddenly burst upwards but we cannot forsee what can happen. If it breaks downwards then short the market as the fall will be decisive.

End of Show - Kannaltec & Salcon?

noreply@blogger.com (Dr. Siva) — Sun, 08 Oct 2006 17:29:00 +0000

Some stocks have risen exceptionally well the last few weeks but have they reached the end of their run?

Kannaltec is one such stock. It has risen almost 160% in 6 weeks but seems to be highly overbought. The ADX at 68 is already very high & MACDH is also at a high peak. It has also reached its all time high 0.545 which is now a very strong resistance. Can it continue to rise or will it fall? I think it will start to correct from here. All good things must come to an end & this might be it for Kannal. So I rate it a SELL.

Salcon - also may start its reversal. Daily Candlesticks is -ve & the DMI looks like it is going to make a -ve cross. ADX is also starting to move down. MACDH is at a peak. Perhaps with all the new stocks like timber & other old favourites coming back maybe Salcon's run is over. SELL

New Theme Play - Timber Stocks

noreply@blogger.com (Dr. Siva) — Sun, 08 Oct 2006 16:41:00 +0000

The recent news about rising demand & prices for plywood & timber products led to a massive jump in prices of many of the stocks in this industry. Fundamentally, it looks like the industry is in for a good run for at least 6 - 12 months & with this stocks will generally rise. I pick a few here which are technically sound as well & use DocTS strategy to select investments.

Cymao - very bullish. All indicators positive - DMI, MACDH, MAV, BB & ADX is strong & rising. Initial resistance at 1.76 & the 2.28. There may be some minor correction after Friday's strong rise, but it should be well absorbed. Strong BUY.

Leweko - has had a good run already rising from 1.20 to 1.54 in the last 2 months. It has also risen above the resistance at 1.50. It was in a minor correction mode over the last few days but should start rising again now. All other signs are positive DMI, MACDH, MAV, BB and the ADX is also strong. BUY

Permaju - is another stock will all positive indicators - DMI & MACDH are +ve & rising. ADX is bullish & strong. Prices are in the upper BB channel & above all the MAV. All positive signs. But Permaju did not rise as strongly as Cymao or Priceworth on Friday & strong resistance at 0.50. If that can be breached then the bullish move will start. Watch with buy above 0.50.

Priceworth - all indicators are positive. DMI is +ve & ADX is strong - bullish momentum is strong. MACDH is rising, +ve sign. Price is in the upper BB channel, in fact it has shot above the upper line on Friday. Price is also above the 7, 14 & 30 day MAV and the short term MAV are above the longer term MAV giving further indication of bullishness. Price also rose above the 0.605 resistance on strong Volume but there is another resistance at 0.67. Pworth is also generally undervalued so further upside is expected. This is a good buy for the timber play. Some correction can be expected (though it may be well absorbed) after Friday's 10% rise but it should continue rising in a bullish run after the correction. BUY

DocTS Stock Update

noreply@blogger.com (Dr. Siva) — Sun, 08 Oct 2006 14:58:00 +0000

The pick of these stocks are Hiapteck & Sime Engineering. I will sell Dreamgate & Jotech and hold ACPI & Utama.

ACPI - is still ok but looks like we will see more sideways movement than bullish moves up. Prices barely below the 7 & 14-day MAV & the 7-day MAV has crossed below the 14-day MAV, all signs of weakness. But its still in the upper BB channel & DMI, ADX & MACDH are still ok. HOLD.

Dreamgate - is getting weaker. Prices have fallen below the 7 & 14-day MAV, MACDH, DMI & ADX are all flat. There is no strength in the bullish moves. It is still not yet negative but I don't see strong bullish moves, so I would sell because I can reinvest in some better stocks. SELL

Hiapteck - still looks very good. Correction supported at the resistance turned support at 1.00. All indicators still very positive. The rise should continue after selling pressure has been absorbed. BUY

Jotech - like I mentioned before is weak. The one day rise on Thursday did not have any follow thru, as it fell slightly on Friday. Jotech is no longer within my preferred parameters for DocTS. I will not write on this stock again (unless things change significantly to the upside) as I have sold out & recommended the sell a few days ago. The chart indicating weak indicators is given below. SELL

Sime Engineering - moving very nicely & riding the upper BB line. All indicators are positive & looking better. MACDH is positive, DMI is good & ADX is getting stronger indicating the upside move is very much intact. A breakout of the 1.51 resistance will be very bullish. BUY

Utama - it is still stable & within all the parameters of the DocTS indicators. No change to the bullish position. RHB is slightly weaker but also still within parameters. No sell signals for either, still hold for its upmove. Resistances remain at 1.23 for Utama. HOLD.

KLCI & Futures

noreply@blogger.com (Dr. Siva) — Thu, 05 Oct 2006 17:34:00 +0000

KLCI - rose Thurs & is still positive but unless it breaks above the 970 strong resistance it still cannot be called bullish. While it is still within the DocTS strategy, the MACDH, DMI & ADX are still flat & not rising bullishly. This shows that the market is still uncertain if it can break the resistance. Maybe the new high in the Dow & rising Asian markets pushed up the CI but what we need is for the CI to break above 970 on strong volume, if not it will correct downwards first. Long term it is still bullish but some short term corrections will be healthy. But if it breaks above 970 then 980 & 1000 are the targets.

FKLI Futures - while signals appear similar to the CI, it appears slightly weaker. DMI & MACDH are turning flat while ADX is getting weaker indicating that the bullish uptrend may be getting weaker. Like the CI maybe the Dow & regional markets gave it a big lift. But this was on very low volume. Lets see what happens over the next couple of days. A fall below 959 will be bearish, a rise above 968 will be bullish. What will we see Friday?

Stock Updates

noreply@blogger.com (Dr. Siva) — Thu, 05 Oct 2006 16:57:00 +0000

Hiapteck - this is my favourite stock as it is doing well & looking very bullish. But some minor correction Friday or Monday is possible before it continues its climb up. It has broken out of its first resistance at 1.00 & volume the last 3 sessions has been strong. All signals are bullish. 1.00 will act as a strong support. Next target is 1.20 & then 1.36. All time high is 1.70, reachable? Why not!

Jotech - while the price did rise on Thurs signals still haven't turned positive. Its still below the mid BB line, within the lower BB band, below the 7 & 14-day MAV, the 7-day MAV has crossed below the 14-day MAV indicating bearishness, the MACDH is still turning down, DMI still turning towards a negative cross & the strength of the upmove is weakening (ADX turning down). Thurs rise bounced off the 30-day MAV but vol on this rise is low, so it may be just a technical bounce. I still believe this stock is more bearish then bullish but I will change my mind if it rises above the midBB line into the upper BB channel & if it also rises above the 7 & 14-day MAV. Until then I would not buy this stock.

ACPI is softening. Prices have dropped just below the 7 & 14 day MAV but still within the upper BB channel. DMI is still ok but MACDH is moving flat to downwards. It is not yet a sell signal but needs watching.

Dreamgate - while still positive, is not very bullish. ADX is getting flat & so too the DMI. Prices are just on the 7 & 14-day MAV but still within the BB upper channel. Not much else can be said, we have to wait for its next moves to see if the positive trend continues.

Sime Engineering - all signals still positive. Resistance is strong at 1.51 but a break above this will make this stock a bull stock. Looking very good.

RHB is also still positive. Its not as strong as Utama but still within the required parameters of the DocTS strategy. 1.32 is a strong support.

Utama - all signals still positive. Resistance is strong at 1.23 & prices must break above this to turn the stock into a bull stock.

KLCI & Futures

noreply@blogger.com (Dr. Siva) — Wed, 04 Oct 2006 22:35:00 +0000

KLCI - is looking weak. DMI may make a -ve cross, MACDH at best is flat. More importantly the index has crossed below the 7-day MAV & is resting on the 14 day MAV. If 970 is too strong a resistance then the likelyhood is that it has to correct down first before making another attempt later. Futures are looking very weak as well, so I believe the CI will fall further & if it falls below the midBB line it will confirm the reversal into a downtrend. So watch out for this.

FKLI Futures are looking -ve. DMI looks like it will make a -ve cross, ADX is turning weak, MACDH is turning down as well. Index has fallen below the 7 & 14-day MAV & is resting on the mid BB line. A fall below this line coupled with the other weak signals will confirm the reversal & the futures will turn bearish. The 7-day MAV is also about to cross below the 14-day MAV another strong bearish signal. Time to shot the futures? Possibly bec going long would be very risky.

Stock Updates

noreply@blogger.com (Dr. Siva) — Wed, 04 Oct 2006 20:02:00 +0000

ACPI - is turning -ve. MACDH is flat & may be turning down, price is below 7 & 14 day MAV & the 7-day has crossed below the 14-day MAV. It may still hold up but cautious traders may sell out & move to other stocks. This stock is definitely turning weaker.

Dreamgate - generally still positive although ADX is starting to flatten. We may see some sideways movement for a few days. So we have to keep an eye on this counter for its next signals. Other signals are still positive.

Hiapteck - has hit strong resistance at 1.00. It will probably see a minor correction next couple of days before attempting to climb again. Other signals all still bullish though we will probably see it fall back into the BB channel before making another attempt to cross 1.00.

Jotech - has started a bearish phase. All signals turning bearish. MACDH is turning down, DMI moving to a -ve cross & prices have fallen below the 7 & 14 day MAV as well as the midBB line. It is currently being supported by the 30-day MAV. Also the 7-day MAV has made a -ve cross of the 14-day MAV another bearish signal. This shows that Jotech has turned very bearish. The 30-day may hold, but unless it can cross above the mid-BB line, the bearish move will be extended. SELL.

Sime Engineering - Looking good & bullish. All signals very positive.

Utama - Still looking strong but 1.23 is a massive resistance. Any break above this will be very bullish. All signals looking very positive.

Stock Updates

noreply@blogger.com (Dr. Siva) — Tue, 03 Oct 2006 18:12:00 +0000

The following stocks are still well supported by the DocTS trading indicators & the uptrend is still intact: Sime Engineering, Utama, ACPI & Dreamgate

1) RHB has strong support at 1.32. A break below 1.28 (the midBB line) will change the trend to bearish, so that has to be watched carefully. But for now it is still ok.

2) HiapTeck - very bullish. Broke out of the 0.91 resistance on strong volume. MACD, DMI, ADX & BB are all looking strong. Buy on corrections as next targets are 1.00 (strong resistance), 1.20 & 1.36. Indicators are strong & the bullish trend should be well supported. Any correction is a buying opportunity.

Jotech - has taken a turn for the worse. It has fallen below the 7 & 14 day MAV & importantly also below the mid-BB line. MACD is also showing signs of weakness but that is a slower indicator as is the DMI. Candlesticks also show a negative trend. If tomorrow (Wed) it does not pick up & rise above the midBB line then I would sell this stock as the bullish trend would have reversed. Keep a very close eye on this stock.

KLCI & Futures

noreply@blogger.com (Dr. Siva) — Sun, 01 Oct 2006 00:25:00 +0000

KLCI - slight correction on Friday but still no sell signals. Even the candlesticks show no reversal signs including the weekly. But 970 is proving to be a strong resistance. Nothing to do but wait for next moves, although if it cannot penetrate 970 next week then we may see it falling back a little or going sideways.

Futures - same as CI. No change to signals. Almost same level as CI, we'll just have to wait for its next move.

Stock Updates

noreply@blogger.com (Dr. Siva) — Sat, 30 Sep 2006 23:51:00 +0000

All stocks are still looking good, no reversal signals yet anywhere. I am adding a new stock which is looking very positive, Dreamgate. My only concern is that the CI may be peaking. If it suddenly reverses course then all our stocks may see selling pressure, so we have to be careful of that. Otherwise there are no sell signals for any of our stocks.

New Stock - Dreamgate also is starting to look good using DocTS strategy. DMI made +ve crossover & ADX is flat but at 31 is fairly strong on the bullish side. MACDH looking very +ve & about to cross above zero. Prices are above all the MAV & also in the upper BB channel. BB widening positively. We're seeing some healthy correction, breakout may be coming. Target Price is 1.62 & 1.72. BUY.

1) ACPI - all signals still +ve. No change in position from last posting. ADX at 36 is getting stronger & more bullish. Still good to go higher.

2) HiapTeck - some weakness, but still no reversal sign. 0.91 is a strong resistance, needs more than 1 attempt to breakout. Hold.

3) Jotech - still looking very good. Vol also rising slowly, all signals are good, only needs to breakout of the 1.22 strong resistance & we will see it shoot up. Hold.

4) Sime Engineering - we are seeing some weakness but no sell signal. Prices still above 14-day MAV & within upper BB channel, so movement is still up. No DMI or MACDH crossovers but DMI & ADX starting to get flat. These are signs of softness but not of reversals. It could just be a correction of the over bought positions, nothing to worry about but keep an eye for falls below the 14-day MAV or mid-BB line. Otherwise still hold.

5) Utama - similar to Sime, some softness but normal. No reversal signals, DMI & ADX still very positive. Strong support at 1.15. Breakout above 1.23 will be very strong & bullish.

KLCI & Futures

noreply@blogger.com (Dr. Siva) — Thu, 28 Sep 2006 15:04:00 +0000

Are the CI & Futures going to breach the strong resistances or not? "So close yet so far".

KLCI - is very close to its 970 resistance & it was tested intra-day. All other signs are positive including BB, price vs MAV, MACDH & the ADX is still strong. Will it or won't it? Well its hard to say but if it does not break out soon then it has to instead correct downwards, because the bulls will give up sometime. For now all we can do is watch.

FKLI - The futures index is slighter softer than the CI. DMI has turned slightly down, ADX is flat, MACDH is also flat. But it is still comfortably above the MAV & within the upper BB channel. There is a 3 pts discount to the CI. Again the 970 resistance is strong. Nothing we can do but wait for its next move to give us a better signal.

DocTS Stock Update + Hiap Teck

noreply@blogger.com (Dr. Siva) — Thu, 28 Sep 2006 12:37:00 +0000

Well its been 3 days since my last update, so lets see whats happening with my 4 stock picks. I am also adding another stock to watch - Hiap Teck.

1) ACPI - still looking good. All signals are still +ve & there are no sell signals. Prices still above the MAV & within the rising upper Bollinger Band channel. ADX still strong. MACDH also +ve. Resistance at 1.00 is still strong so it has to overcome this to continue its bullish trend. Still a hold.

2) Jotech - is looking good. It is still riding the 7-day MAV & all signals still solid. ADX is growing stronger, BB is rising & MACDH still +ve. A breakout above the resistance 0f 1.22 will be very strong for Jotech but this will be the 4th attempt in 5 months so we'll just have to wait & watch if it will be successful.

3) Sime Engineering - still looks ok. Signals getting a little flat but no sell signals yet. Thursday's close is stradling the 7 day MAV but still above the other MAV & within the BB upper channel. The latest news is that Sime Darby will buy Ramunia & not Sime Eng, but the ultimate benefit is to Sime Eng, so overall it is still good for Sime Eng. We have no idea how the market will respond but we are technicians & this is not bad news per se & good news long term, so we will watch the signals for our next move. For now its still a hold.

4) Utama - still looks very good. All indicators are fine. ADX continues to rise & is at 30. Very strong bullish signal. MACDH still rising & prices still above the MAV & within a rising BB. Immediate resistance is 1.23 to 1.25 & at this rate it should break above this resistance soon. Stock is still very bullish. Incidentally RHB is also looking equally good.

5) Hiap Teck - is another stock that is giving good signals using DocTS. ADX especially is quite strong & bullish. Resistance at 0.91 is very strong & 4 previous attempts to breakout, the most recent on Monday, were not successful. But if it does breakout, the rise will be very strong with a Target price of 1.18 (30% gain). So watch for high volume breakout to buy.

Summary - All stocks are still within trend. No reversal or sell signals yet.

DocTS Comments on Stocks, KLCI & Futures

noreply@blogger.com (Dr. Siva) — Mon, 25 Sep 2006 14:26:00 +0000

1) Utama - Corrected 6 sen today but no change seen in DocTS signals. It is still positive. I will only be concerned if prices fall below the 7 & 14 day MAV for a start. Besides after a big rise on Friday some correction is healthy. Same comments for RHB as well.

2) Sime Eng- formed a spinning top. May be a sign of reversal. Its also at a strong resistance. Whether its a major reversal or minor correction remains to be seen. Other technicals still +ve. Needs to be watched closely. A minor correction is ok as long as other technicals remain sound.

3) Jotech - minor correction. Still supported by technicals. Only a fall below the 7 & 14 Day MAV will create concern. Must breach resistance at 1.22 to extend next move up.

4) ACPI - same as for Jotech. Technicals still supporting. Wait for next few days to clear up next moves. 1.00 will continue to be a resistance.

5) CI might start moving sideways. No indication yet of bearish or bullish moves altho Futures appears more bullish. There is no market moving news anywhere altho oil prices below US$60 is positive for the market & airlines stocks.

6) Futures was rather bullish Monday, but 970 will continue to be a strong resistance.

DocTS - Buy Jotech, Sime Eng, Utama, ACPI

noreply@blogger.com (Dr. Siva) — Sun, 24 Sep 2006 12:44:00 +0000

Here are some stock recommendations based on my new trading strategy DocTS. BUT you must check it yourself & use your own judgement before making any trade. Never take my word for it, do your own homework.

1) Jotech - is starting to move positively. DMI crossed over on 22 Aug, ADX is now at 40, strong trend; MACDH crossed zero on 14 Sep; prices are above MAV & within BB upper channel, MAV short term are all above the long term, BB opening up bullishly. There is strong resistance at 1.23, so a breakout above 1.23 is the Buy signal.

2) Sime Engineering - is making its early move. DMI crossed over, ADX (28 pts) starting to move up, MACDH +ve, prices within upper BB channel & above all MAV. Only the 14 day MAV has yet to cross above the 20-day MAV (i.e. mid BB line). BB is widening positively. There is resistance at 1.52 but a break above this will lead it to new & strong highs. Fundamentally news flow has been very positive & if they do buy Ramunia it may be another KNM in the making, so this is a very good buy both Technically & fundamentally.

3) Utama has moved up strongly & confirmed its prior +ve signals. I believe this is just a start & it still has space to move up to a target of 1.37, a strong resistance. There is a possibility of a double top at the current level but all signals are bullish. A breakout above 1.25 is a possibility although a minor correction before the breakout is also possible. Any correction should be supported at 1.15.

4) ACPI - similar to Jotech, all indicators are positive. Only need to be careful of the strong resistance at 1.00. If breakout above 1.00 then it will rise to 1.25. It can be bought now but if 1.00 becomes a strong barrier & signals change then you should sell, so this is worth a punt because of its otherwise strong signals.

KLCI & Futures

noreply@blogger.com (Dr. Siva) — Sun, 24 Sep 2006 12:32:00 +0000

KLCI - possible double top at resistance of 970. It will be quite tough for CI to break 970, normally for a strong resistance it will take several attempts. Looks like a bearish harami formed on Friday, so possibly sideways or downside move is likely. Other indicators are neutral.

FKLI Futures - also appears weak. Resistance at 970 is strong. Weekly candle is a long legged Doji just above the previous week's candle. Might be a reversal sign at strong resistance, so likely move is down. 14 day MAV is crossing below BB mid-line (20day MAV), so things are starting to look more negative. Other indicators are neutral. Likely move is down.

DocTS - A New Trading Strategy Using TA

noreply@blogger.com (Dr. Siva) — Fri, 22 Sep 2006 17:39:00 +0000

As promised here is the new trading strategy using several different indicators/signals to predict stock price moves. It is a pure Technical Analysis strategy. I call it 'DocTS' (pronounced 'Doctors') - i.e. Doc's Trading Strategy. I would also like to give credit to Isaac who also uses many of these signals & shared them with us. This is a lower risk strategy with a strong success rate & is ideal for use by traders or investors who don't have much appetite for high risk.

The indicators we will use are DMI & ADX, MACDH (Histogram), Simple Moving Averages (7,14 & 30 day), Bolinger Band, Support & Resistance & finally Candlesticks. I explain briefly how the indicators are used but if you are not familiar with them then please read up more from the links I have provided & also use other sources. It will not be possible to discuss the merits of each indicator.

To demonstrate the use of DocTS I have selected Salcon, Utama & Tebrau. Salcon was a strong gainer over the last month, Utama is starting its strong trend now & Tebrau has been trending down. For you to truly benefit from DocTS you have to select & chart stocks yourself. I am happy to discuss your selections but I will not be able to provide anyone with tips if they don't do it themselves. So please don't ask "Doc, RHB how ah, can buy ah?". But if you say "Doc, RHB is meeting all the requirements, but its close to resistance what do you think?" then yes I will be glad to comment. God only helps those who help themselves & so will I .... 8))

The signals & rules are as follows:

1) DMI (Directional Movement Index) & ADX (Average Directional Index)
In DMI we have +ve & -ve DMI. When the +ve DMI crosses -ve DMI, then a positive trend is starting. To choose a stock that is making a positive move, this is the first signal we shall use (you can use others but I prefer this to point to a starting trend). [Click here for info on DMI - http://www.investopedia.com/articles/technical/02/050602.asp]

The ADX is used to gauge the strength of the prevailing trend. ADX is measured on a scale between 0 and 100. Readings below 20 are used to indicate a weak trend, while readings over 40 indicate a strong trend. ADX is not used to determine the direction of a particular trend, but only to gauge its strength. If the +ve DMI is above the -ve DMI & the ADX is above 40 then we have a strong uptrend. But if the -ve DMI is above the +ve DMI & ADX is above 40 then the downtrend is stronger.
http://www.investopedia.com/terms/a/adx.asp

Selling is indicated when -ve DMI crosses +ve DMI, that is when the trend changes & we have then to look at getting out of the stock.

2) MACD Histogram (H) is the 2nd tool. When the H turns upwards (even when it is below zero) it shows that the trend is turning positive & when it crosses the zero line it is a strong positive uptrend. When there are divergences between price & H then trend change is possible. The H is an early indicator of a trend change. Click for more on H - http://www.incrediblecharts.com/technical/macd_histogram.htm

Confirmation 1 - So when we see a +ve DMI crossover & also confirmed by H turning +ve, we have 2 early signs that the stock price is starting a positive move. This puts the stock on the watchlist immediately. But when H reverses itself & starts moving downwards after reaching a high, then a reversal could be beginning. Coupled with -ve DMI crossover, a Sell may be indicated.

3) The Moving Averages are the 3rd tool. Here I use simple MAV not exponential. Both can be used but I use simple MAV because the Bollinger Bands use the simple so to be consistent with BB I also use simple MAV. I use the 7, 14 & 30 day MAV. The BB middle line is a 20-day MAV so this basically gives us 4 MAV to use.

The first sign is look for prices to rise above the 7 & 14 day MAV. These are the early signals. When prices rise above 7 & 14 day MAV it shows a rising price trend. Next the MAV itself must make +ve crossovers, i.e. 7 day (7D) MAV must crossover the 14 day (14D) & ideally both 7D & 14D must crossover the 30D. They must also crossover the middle BB line (i.e. the 20D MAV).
When the shorter term MAV are above the longer term MAV then we have a solid trend in place. So 7D above 14D, 20D & 30D; and 14D over 20D & 30D; and finally 20D above 30D; then we have strong rising trend. See Salcon chart for this example point X marks the spot where this happens. Click to read more on MAV http://www.incrediblecharts.com/technical/moving_averages_three.htm

When prices are above all these 4 MAV we have a strong uptrend in the stock as shown in Salcon chart point X.

Confirmation 2 - when prices rise above MAV & short term MAV are above long term MAV & this compares to early signs in DMI/ADX and MACDH, then we have a consistent confirmation that a good trend is in place. When all are in positive territory a BUY is definitely indicated.

In reverse, when prices fall below the MAV starting with 7D a reversal may be in progress. But 7D is not strong indication. If prices fall below both 7D & 14D then we must be very careful as a reversal is a strong possibility. If it falls below the 20D (i.e. Mid BB line) then a reversal is definitely confirmed.

Also when the MAV themselves cross below each other a reversal is indicated. So when 7D cross below 14D or both cross below 20D then a reversal will already be in progress and a Sell is indicated.

4) Bollinger Band is a very powerful tool. While it is difficult to master all the nitty gritty of BB, it can be used in a simpler way when coupled with other signals. Here we will look for 3 moves in the BB.
- 1st the BB should ideally be either flat or starting to move upwards (widening with prices moving upwards & upper line moving upwards). A BB that is pointing downwards is still negative & needs to be observed.
- 2nd prices must move upwards within the BB. They can be moving up off the bottom channel line but price must not be going down (this is unlikely to happen if DMI & H are positive).
- 3rd prices must be moving up into the upper channel line or must already be within the upper BB channel (i.e. above the mid-BB line). If price is within the upper channel then it is a strong positive sign esp when BB is widening.

The ideal scenario is:
a) Prices that are in the upper channel or moving into the upper channel.
b) BB is moving up or starting to widen with prices moving up
c) A breakout from a narrow BB with prices moving up is a powerful sign of strong upside breakout. Read more on BB -
http://www.bollingerbands.com/services/bb/

Confirmation 3 - When prices are positive re BB, coupled with DMI/ADX, H & MAV, we have 4 powerful tools to confirm a strong bullish sign and a strong BUY. But when prices cross below midBB line into the lower channel & BB also starts trending down, a Sell is indicated. When this is confirmed with -ve DMI crossover or -ve MAV crossovers then a Sell is a definite possibility.

5) Support & Resistances
In all cases S&R are very important. When prices are rising & hit a strong resistance we can expect it to either slow down the rise or stop it. But if it breaks out of the resistance then a continuation is likely. We will always continue to monitor S&R, but mostly R in uptrends.

6) Candlesticks - While we can see the buy signals using above indicators it is still necessary to spot early signs of price exhaustion & impending reversals. Candles are very good to show top reversals. Look for bearish engulfing, harami, shooting star or evening stars both in daily & weekly charts. The earlier signals are trend indicators, change in trends using DMI/ADX, H, MAV & BB may be slower but coupled with candles we should be able to spot reversals quite well.

Summary of DocTS
So here we have it, 4 strong trend indicators & 2 reversal indicators. With these 6 signals we should be able to spot good BUYs and SELLs. Some examples are given below.

DocTS - Examples of the Strategy

noreply@blogger.com (Dr. Siva) — Fri, 22 Sep 2006 17:27:00 +0000

Let us look at some examples of how the strategy works. Click on the chart to see comments.

1) Salcon which we could have spotted very early in the uptrend & made 50% profit

2) Utama which is making a move now, but we could have spotted it on 11 Sept & made 18% already.

3) Tebrau we can see both the buy signals & also the sell signals. As you can see this is a powerful tool & also less risky.

4) Can you spot others?
Can you also spot the buy signals for Puncak (15/9), RHB (8/9) & LKT (15/9)?
Can you find other stocks that are just beginning to give buy signals that we can buy into next week? Share & discuss & lets find a winning strategy for everyone.

KLCI & Futures

noreply@blogger.com (Dr. Siva) — Thu, 21 Sep 2006 17:02:00 +0000

KLCI - rose as expected Thurs, but is now reaching the strong resistance of 970 same as the Futures. Indicators are still positive, its riding the upper Bollinger Band channel, above the 7,14 & 30-day MAV, MACD is also +ve & there is no candle reversal pattern. On the -ve side there is strong resistance at 970 & the possibility of a double top if it cannot penetrate the 970 decisively. Again at this stage we have to be rather cautious as it has reached decision time, to cross 970 or fall back.

FKLI- Futures are same as CI, indicators positive but reaching strong resistance at 970 too. Its certainly toppish.

We'll have to see what happens Fri. Are there any drivers that can help push it even higher today or is sentiment weak & a fall back is the most likely outcome. Dow dropped 100 pts (expected as it was rather toppish) & oil prices rose (but still within very comfortable range). But Thailand seems to have resolved itself & there is no otherwise negative news around. Impossible to make a call other than to advise caution.

KLCI & Futures - Up Again Thursday?

noreply@blogger.com (Dr. Siva) — Wed, 20 Sep 2006 23:07:00 +0000

KLCI - continued its minor correction Wed but found critical support at the mid BB line & the 7 & 14 day MAV. The 953 support is also holding it up. I have used the MACD Histogram today for a change instead of the usual MACD. MACDH is flat perhaps an indication that the correction will not get worse tomorrow. The trend may continue up today as the supports above are quite good. There is also a small hammer indicating a possible rise today.

Still the 970 resistance will be hard to break but if it does then prices may rise to 980 or even 1,000. But if it fails to breach 970 then further correction or sideway movement will follow; which it will be will depend on the candles. Fundamentally the Thai coup seems to have been settled with the King apparently favouring the Generals, the US Federal Reserve did not raise rates, Dow & Nasdaq moved up & oil prices fell further. So fundamentally, there is no bad news in the market, all good news externally. The market should rise based on both fundamentals & TA. For now the trend is still up.

FKLI - CI Futures reversed Tuesday's fall & rose quite strongly Wed. Good support at mid BB line & also the 960 level. Indications are that it will continue the rise today. Next target is 968.