LIOC - swing low is 30.20, can go up from here

In my last post we discussed that the LIOC had bounced back from 30.00 on 2 occasions since 5th of May 2015. This time it has turned around at 30.20, thus forming a swing low at that. This formation with a lower RSI in the ASI and the shortening histogram MACD bars in the Stock makes it an interesting formation to the UPSIDE. For a short term trade can buy between 30.50 and 31.00. If your strategy is a Swing Trade, your stop needs to be at 29.50.

LIOC came down to 30.00 and bounced - 2 times since May 2015.......

On the 5th of May 2015 LIOC hit a low of 29.00, but thereafter the price got strongly supported around 30.00, except a few trades around 29.70 or 29.80. During this period between 5th May 2015 to date only twice the prices retraced to the area of 30.00. On both occasions the Stock rallied giving some pretty decent profit margins. Good news coming your way is that it is once again dropping towards this magical figure of 30.00. The ideal scenario is to wait for the price to touch 30.00 AND WATCH the histogram bars of the MACD,  when they become shorter start Buying. Another point to watch will be the SWING LOW, while the MACD histogram is shortening when both occur you have a good short term trade. Good Luck on these trades.

How to trade with the RSI - this could be profitable to you

RSI is called a lagging indicator. But you can certainly profit from it. In Sri lanka a lot of people say to BUY when the RSI is below 20 and Sell when it is above 70. If you had traded it that way you would known that it is easily said than done. However this lagging indicator is not to be ignored. How can you make use of it? This is how.


Step 1 - In the ASI chart you wait until it comes down below 20, like in the figure 1

As you can see in the Chart the RSI has gone down below 20 on 4 occasions during this year. The dates are 11.01.2016, 02.03.2016, 29.06.2016, and 18.11.2016.

Step 2 - Choose your stock that you would want to trade, then draw vertical lines on these days, like in the figure 2.

Step 3 - Watch for the swing low of the Stock's Price line. See figure 3.

As given in the Figure 3 all 4 occasions made money. The profit you would want to make is your call. But it is very very important to stick to the stop loss.

It is not only the swing low that can be combined to the RSI, lets see some others in the future.

JKH.N.0000 - Interesting developments in the Price line

As can be seen the Trend is still Bearish for JKH with more lower highs and lower lows. However it is trying heavily to be above the 100sma, and stay above it for a longer rally. But it is not so just yet. The prices must be above 20,40, and 100 sma lines to really say JKH is on a roll. Presently it could check 145.70 down to 143 levels before hitting up to test 155.50 again. If it happens with big volumes then it can move towards 158.80, thereafter things will be really great to watch. But as for now let it slide down till a higher close is seen.

TJL.N.0000 - Teejay Lanka Plc - Bearish not a trend failure

TJL is having a massive rally since June 2012. It broke out of the 100sma during this period, and had respected this line up until the beginning of 2016. But in March 2016 the price line went above the 100sma line once again. On Friday the 16th Dec 2016, the price touched it again, as such the trend is still in tact as long as it is above this critical support line. However the present trend has more LOWER HIGHS, as long as the lows are going to be giving higher lows, followed by higher highs the Stock will not resume the uptrend. If Friday's close above 100sma to be the support then it can retest the present downward sloping purple trend line at 45.50. And anything above that will be bullish for the counter. As long as the stock is below the purple trend line the stock price could fail to rally and come down to 40.00, 39.00 and to a minimum of 37.60. I like to watch this stock.

8000 views ........ Thank You

My dear readers it is a pleasure to notice that the views in the blog surpassed 8000 just in the first year since I started posting frequently. A BIG THANK YOU FOR DROPPING BY. It will be a great pleasure to serve you more if you can give me a few suggestions to include and improve to cater to your interests in the coming year. Please be kind enough to do that in the comments below, it will do a world of good to all. Could you do that please....

Can COMB.N.0000 respect the 100sma

Since the 12th of July 2016 COMB.N.0000 had traded above the 100 sma. This up move has been holding todate. But had been struggling to break above 145.00 forming an Ascending Triangle. Stock needs to respect the 100sma which is now at 140.70, IT MUST HOLD. If it closes below this level with strong volumes then it will Technically be bearish. There is also a major support line at 140.00, hopefully this would hold in order to sustain the bullish bias trend. On the upside we can expect it to test 150 in the short term should the resistance at 145 be broken with strong volumes. 140.70 is an area to enter based on a strong support at that point. This needs to be watched closely.

ASI took a breather

All Share Index took a breather today, as a pullback looks a good sign within a trend. As such the next 2 to 3 days can soften the pace. Month of December has not been an active month for obvious reasons, but had trended up on many occasions. This could be experienced this time too. Hopefully. Let's see how the month progress.

ASI recovered.........

So the last post with a chart shared with me by Mr. R.T. did benefit those who followed the short term market direction. At present the ASI is heading towards 6400 points, closing at 6370 points today.
An increase of 138 points in a matter of 3 days is beyond the recent past average movement. Although it is bullish, the risk has become high for the traders. Present trend suggest an up move above 6400 but breaking out with pullbacks need to be aware of.