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CapitaMalls Asia: Bought more at 161.8% Fibo line.

Friday, August 5, 2011

Just two sessions ago, I bought shares of CapitaMalls Asia at $1.335. Then, I commented on the very high volume behind the long black candle and wondered if price could go lower.

I used Fibo lines to estimate where the stronger supports would be in case of further selling and $1.265 is where the 161.8% Fibo line approximates.


My overnight buy order at $1.265 was filled this morning as price gapped down following the drastic overnight sell off in the US and European stock markets.

$1.265 is beyond the lower boundary of the MA envelope and if volume remains relatively low at the end of the day, things would look more benign.

Panic and sell now? No.

22 comments:

financialray said...

I think it is a good move.
Esp if long term.
AFter all, capitaland will ensure CMA can tide through the volatility. So moral of the lesson is DEEP pockets help to calm nerves and sooth mind in making right decision.

AK71 said...

Hi fiancialray,

I like the way you put it: "calm nerves and sooth mind". Haha..

Yes, that is a good lesson indeed. :)

Anonymous said...

Congrats AK

Yes, Deep Pockets helps.

Really helps

SnOOpy168

AK71 said...

Hi SnOOpy168,

I think it is too early to congratulate me. Thanks, anyway. ;)

Anonymous said...

I am still knocking my head why is it that everytime I buy, it will drop further. Grrrr....

*sign*

SnOOpy168

AK71 said...

Hi SnOOpy168,

Do not be too hard on yourself. It happens sometimes. Life is like that. :)

Anonymous said...

Hi AK, tell Snoopy168 he/she is not alone. AK they are so many classes abt trading, advertise how good & accurate..... can advice which to go if we are interested. You should know better, cos class also not cheap, better attend the right one.
JO...........

AK71 said...

Hi JO,

I am very giamsiap. I never pay any money to attend any classes. I read up on my own.

I have a friend who paid $3k to attend a course but I just could not bring myself to part with so much money. :(

Anonymous said...

AK, i don't mind if it helps. Any idea where? who? AK not everyone has the same brain like you ok. I stupid mah!
JO............

AK71 said...

Hi JO,

Oh my. It is hard for me to recommend anything if I have never had any experience. :(

Go to the library and borrow some books on investments. Give it a go. ;)

I started by reading the DUMMIES series (the books with yellow/black covers). I am not very smart too, I guess. ;-p

CT said...

AK,

pls dont take offence. but do u think u might be too enamoured with the 'good deal' rite now.

isnt it better to wait for a reversal signal before entering? CMA is a fundamentally good call. but havnt u always advocated not to catch a falling dagger? of course, holding for the long term, u can be quite confident. but especially with no clear event that could trigger a broader mkt reversal, i would wait till next week before entering.

financialray said...

Yes, go to library or POPular book store. They have a lot of good books on financial investments.
Not that I giam siap too but paying a few k to find that its not worth it, can die of heartache.
These lectures usually make more money by collecting a few k from a class of 10-20 students for a few hours or days of lessons. That easily will be 60k.
Anyway, I don't like trading.

Hwang said...

i don't believe those investment course. if they are really that good, they will be as rich as Buffet :)

i am learning too. while my reits are performing well, my unit trust are not :(

AK71 said...

Hi CT,

I was wondering if anyone would raise the point you raised soon. ;)

I might have given the impression that I am in love with CMA but I really am not. I have just been stating facts and have been quite careful to present both sides of the coin.

Why did I enter without any clear reversal signal? I am pre-empting. Bad trader! Bad! Bad! Yes, slap my hands. ;p

AK71 said...

Hi financialray,

I agree with you totally. If I could make tens of thousands of dollars each time I conduct a class, I think I would quit the stock market. ;p

AK71 said...

Hi Hwang,

Unit trusts could be a good thing too. I utilised my CPF-SA to buy into a unit trust in the last bear market and that gave me 4x more returns compared to leaving my funds in the CPF-SA. I guess it is about timing which is more critical with unit trusts since they tend to underperform. :)

Things Singaporean: SRS, CPF-OA and CPF-SA.

CT said...

why are u then allowing urself to buy in at this time? pre-empting or being contrarian doesnt pre-clude waiting for ur volume indicator to show selling sentiment has slowed. right now there is no sign of it.

it seems like quite a number of ur recent buys have been of this 'pre-emptive' sort. is this a conscious shift in strategy? has it been working out?

AK71 said...

Hi CT,

I get the feeling that you do read my blog regularly and know what I have been doing. So, I am taking a bit more time to flesh out this reply to your concerns. :)

I would not go into a long position unless there are signs for me to do so with some level of confidence.

Of course, the best is to wait for signals and confirmation. That would give the best chance of success.

What I am now doing is counter-trend trading. In a downtrend, prices do not go down in a straight line. They go down a river of hope.

So, my recent trades in NOL, Noble, CMA and CPL were all quick trades and I made some money. Counter-trend trading demands that we are nimble footed but the risk is also quite high as price could sink lower without rebounding.

So, to improve the chances of success, I look at the MACD to see if there could be a chance of a rebound in the shorter term.

In the case of CMA, you will see that it has a good chance of a positive divergence forming. Of course, it might not materialise as we saw with the case of NOL some time back.

Once the positive divergence was negated, all bets on the long side went out the window. I blogged about my experience with NOL in this regard.

Counter-trend trading is something I am still exploring. So, I might fumble here and there but I am glad to share my experience here in my blog (and readers could have a good laugh). ;)

Am I allowing this to become a big part of my activities in the stock market from now. Very unlikely. I don't think I would be able to sleep soundly at night if it did. ;)

80% of my portfolio are still invested for income and the investments are holding up very nicely. The regular income distributions are important passive income streams.

The remaining 20% are more experimental. The blogmaster of "Time to Huat" would call it "play money".

It does seem rather out of character with my usual style, I agree, and I intend to limit such exposure.

Let's see where it leads. :)

financialray said...

Yes,in a nutshell, 80% of money should be safe, 20% for tikam.
Otherwise life gets a bit boring.
Maybe we can explore conducting a 1 day course on how to survive in a roller coaster stock market.
How to choose REITs the SURE WIN WAY.
How to limit losses.
How to get 9-10% returna year after year, even in down time.
Cost : $3k a person, $2888 for a pair
1 day course, LUNCH provided.
We split 50-50 huh AK??

AK71 said...

Hi financialray,

Haha, yes, a little bit of excitement, I can handle. Too much and my heart might not be able to take it. ;p

Wah! $3K per person for a 1 day course? That is mind-boggling! I doubt very much that anyone would sign up.

"Har? AK71 har? I go to his blog read for free can already mah! Save the money lah. And I tell you a secret: he is not very good lor! Lucky only..." ;p

financialray said...

Actually you willbe surprised that there will still be people attending.
Can make the title of the course more tempting eg
1. Get steady stream of passive income with step by step guidance
2. Attain Financial freedom in 5 to 10 years with passive income
3. Make your first million dollars to retire in a few years.
Do you want to wake up late in the morning and work only if you want to? Knowing money is coming in even if you decide not to work?
Even if 5 students sign up, its 10-15k for a 1 day job.
So now u see the newspapers flooded with all these ads.
Besides the licensed moneylenders.

AK71 said...

Hi financialray,

Actually, I think you are right. I do know of friends who paid a lot of money to attend such courses. I wonder why.

I like how you ended your comment. Licensed moneylenders! LOL! ;p

Cracked me up. :)

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