My Short Term List - Is it a FLOP or What???

Trading in any Market is Risky. It is so true in the Colombo Stock Market. When the Market is lost and battered like at present and also for more than 3 years now, no one would dare to trade. The traders who are in it, is not that happy as well.

Many Traders want to trade with Margins, eventually they do not like to Stop Loss, so they Get Forced Sold. Forced selling is a regular business, Stop Loss is not. There are nefarious reasons to say that Stop Loss is unachievable in our market. But Forced selling is achievable in front of the eyes of those guys.

If I tell you that you must  allocate only 1 to 2%  of your trading capital for each trade, how many of you, who are reading this post would like that? But 99.99% of Traders, would not only put their entire trading capital for trading, on top of it they borrow through margin as well. Some big wigs would negotiate rates to trade with borrowed capital.

The reason why I risked to list out short term trade ideas was because, trading based on buy, sell, stop rules work. It has worked internationally, and works locally  too. The one who follow the rules, will not get frustrated and lost. Instead they are satisfied, and upright, holding their heads high, as they know that it will be rewarded.

The following image explains it all in a snap shot. In this example, the trader has allocated a capital of Rs.100,000/=. The % assigned per trade is just 1.25%, translating to an amount of Rs. 1,250/=. Remember you can buy any amount of shares in the market from 1 share to millions right. So you can buy shares to that little value of Rs. 1,250/=. Then if you go through the image you will notice that there had been 40 trades. 13 had been winners, 20 had been losers, and 7 are still open. This shows that the trader who followed this had been somewhat a busy Trader. Now a critic could say that having 40 trades, with 20 losers was a bad effort. Yes it was bad but is it the case when you see the loss he has taken. The loss is just 874.47 after cost. Losing that amount is peanuts, when compared to the allocated capital. If you look at the Cash in Hand row, you will notice that he has Rs. 99,125.53, out of which he has allocated Rs. 8750.00 for his open trades. By pursuing this discipline, he can always fine tune his strategies, and look forward to enhancing his returns. After all the important factor is that the market didn't help traders at all thus far in 2018. As such he could compare the ASI loss against his loss, which is once again proving that his approach is well ahead of the performance of the Market. If you take the 2018 open of the ASI and the close on 29.06.2018, Index has fallen 2.74%. If you take the Year high and the low, ASI has fallen 6.54%. But this Trader with Rs. 100,000/= allocation has lost only .87%. So this guy with 20 losing trades has lost only that amount. What about you? When the ASI has fallen by those % did you gain more than this trader from your trading? If yes I respect you, and I know you are a disciplined, and a mature trader. If not what have you got to tell yourself???

You can access my Short Term Trades here:

Major Markets - Weekly Summary

ASI is impacted by price action of many other major markets. The volatile environment is effecting the bourse in a major way in the short term. Hence lets watch these charts, which will be useful to the direction of the ASI and some important manufacturing Counters.

ASI - Support @ 6150, and Resistance @ 6300

Today I am sharing a chart from one of the veteran chartists. Based on the chart you will notice that there is a BLACK Dashed line which is plotted from Jan 2016. This line touches 3 tops in 2016, and one bottom of 2017, which are all circled. The present end of this descending line is around 6150. We feel that this line could be supported, as such 6150 will be defended. To add more weight to this expectation the RSI is oversold, and testing an area we saw in August 2017. During that period the RSI reversed along with the market, which rallied from a low of 6357 to a high of 6635 points. But the reversal we are expecting around 6150 will not see a rally like that initially. But 6150 area has a very strong support base. If the reversal takes place, we expect the ASI to trend upto test 6300 which is the end of the MAGENTA dashed line or thereabouts. This rally we expect is a rally to sell into. However if we see any change to the reversal up or down we will keep you posted. In short what we say is: Support @ 6150 and Resistance @ 6300

ASI - Heading to the 2nd Support!!!

ASI could not stay above 6217, nor the 1st support of 6200. It is now heading to test the 2nd support of 6165 points. Failure to hold that would open the area upto 6100 which is a psychological support. Any change must witness a sharp reversal. That's not in sight just yet......

ALUMEX - Worth watching again!!!

ALUM is another counter that was tracked regularly, but wasn't ideal to move into. As the counter shows signs of a trend reversal, we feel it's worth a watch. Noticeably the prices between 13.5 and 14.50 were last seen in March 2016. During that period the price headed north with a huge rally to hit a high of 25.50 from a low of 13.50.

SPEN - Cosolidating within the support channel

SPEN was last covered on the 7th instant. The stock was trading above the support channel. It is now consolidating and volumes are being accumulated. As long as the counter is holding strong at 50 and above, it will test the target areas.

                                                                             THEN

                                                                                
                                                                             NOW

LOLC - May test 110 again!!!

After LOLC was beaten down to 90 in the latter part of March'18, gained to test a high of 138/=. Thereafter the counter head south to a low of 96/=. It manged to close above 100 during the day, while closing @ 101/= after testing 105/=. If this momentum continues, we would see it testing the psychological Resistance line of 110/=. Breakout from there could test 114/90-115/=. This is a stock worth watching.

ASI - Must hold 6217, but only 3 points away!!!

ASI struggled till last Thursday the 21st instant. It reversed then and stayed above 6217. However the reversal is not very encouraging just yet. Until it is below 6217 points on closing basis, we need to wait. There are clear support areas below and Resistance levels above. Need to wait until the price line edge either way to confirm the direction. Until there is no trend direction change the index is bearish indeed. That is why it is important to see a close above 6217 to expect a confirmation of a reversal. That hasn't happened yet.

If you have the Guts buy TKYO

TKYO is a share that has a lot of value. But got completely hammered as the Sector they are in is going through hard times. However any stock goes through ups and downs. The traders would take risks nevertheless.

Trading Rules:

Buy @ 36( you can buy @ 35.20 also)
Sell @ 42.60 ( Again based on your boldness)
Stop @ 34.90 or stop within a period. eg. if you think the trade must be closed in an x number of days.


The stop is very narrow here. That's because of the risk involved, due to the fact that there aren't any trend reversal confirmations. However it's worth the risk based on the Risk/Reward ROI.

Do not blame anyone if you do not have the guts to stop.

Short Term Trade Ideas

There is a potential trade on RHTL this was entered into the google drive trading list:

Trade Rules:
Buy @ 11.10
Sell @ 12/= (optional it may be more or less based on your boldness)
Stop @ 10.20 or stop within a period. eg. if you think the trade must be closed in an x number of days

 Do not blame anyone if you do not have the guts to stop.

LIOC was posted in google drive on the 21st and the target was hit on the following day:

Trade Rules:
Buy @ 32.10
Sell@34(optional according to your boldness)
Stop@29.90 or stop within a period. eg. if you think the trade must be closed in an x number of days

 Do not blame anyone if you do not have the guts to stop.

ASI - Not the best close, but higher than the present low

ASI closed at 6228. Yesterday it was 6229. ALMOST UNCHANGED. Intra-day it hit a high of 6244, and a low of 6225 points. The close of the day with a bearish long upper wick candle, isn't the best that happened. This shows that the market is fragile and looming around the present low at 6217. As long as the index is above that 6217 bulls have hope, despite them feeling shattered. On the up side we need to see 6250 and 6303 being tested, whilst on the down side 6200 and 6165 act as the support areas.

Short Term Trading Strategies

I am updating the google sheet on short term trades. If you think it is useful please click on the link below:

https://docs.google.com/spreadsheets/d/1YDdK1JHGGSc8i52P21vCK8MNto2-Y0H4l53PLE_ms04/edit?usp=sharing

This is just a guide for trading in the CSE. It is very important to remember that the most critical thing to follow is the Stop price. There is no point blaming anyone for not following that important fact when trading.

ASI - Reocvered!!! will it be for long?

Finally the expectations of a trend reversal took place. RSI that was at 13.5 points yesterday, turned up to finish at 17.56. The index was 6229 points at the close, that was 6217 yesterday. A MILD RECOVERY. Whether it will be a rewarding turn is something any one would love to see. Whether it is bullish or bearish the basic thing to look for will be the support and resistance levels. Despite the recovery was a paltry sum, what to track would be the immediate support and resistance levels. On the resistance side keep an eye on 6250 and 6295 areas, whilst the supports are at 6200 and 6165 points, in case of a down trend continuation. My expectations are for the index to now hit higher, BUT there can be one more bearish move with a steep swing low candle, to make it an ideal trend reversal. Having said that the trend change that happened today is what I will be watching in the next few days, which will make the coast clear.

 

ASI - Can there be a trend reversal any one of these days?

ASI closed with an RSI of 16 yesterday. It fell to 13.5 today, whilst the ASI closed at 6217 points. That was lower than the previous support in the region of 6225 points. There are support areas between 6200 and 6100, but a trend reversal could be seen one of these days, even as early as tomorrow. That's because of the ASI being heavily over sold. It wasn't normal to see the index beaten up 10 days in a row. Also the fall of 198 points within the period was not something that happens always. If the expectations are wrong then we would see 6200 to 6100 areas being tested.

ASI - Touched the 161.8% fib extension @ 6267 points

It was only yesterday I discussed that the ASI could test 6267 points - 161.8% Fib Extension. It closed at 6265 points a drop of 52 points intra-day. Whilst there are no signs of a reversal based on indicators, we saw some support coming to the market giving a ray of hope. Tomorrow and day after will be decisive as we could see more clarity in the change of direction. ASI is once again heavily oversold with the RSI at 16.8 points. It was 13.60 in August 2017, from which point the index reversed to recoup 300+ points in a matter of 2 months. Therefore the importance of the next 2 days become apparent further. Can we hold 6225? Can we hold 13.8 on RSI?

ASI - Slope persist. No change of momentum.

On the 8th of June we discussed the ASI, when it moved into the support channel. Sadly the bears prevailed for the next week as well. Today's behaviour was no better, thus the index pierced through the support channel. It is heading down to 6267 points. Index broke down from the previous low of 6316 points reported on the 19th of December 2017. So did the RSI which is now below the previous low of 21.94 points. The formation of the momentum indicators do not show a reversal of the trend just yet. Earnestly hope the a reversal would happen above 6267 points, which is the 161.8% of the fib extension that is being monitored right now.

ASI - Dipped into the Support Channel

On the 31st of May 2018, We discussed the ASI based on the Fib Extensions. We were expecting the Index to dip towards 6371 and below upto 6320. The image that was shared is given here:

The price line was above the light blue coloured channel. Now you can clearly see that the price line has come down into the channel as given in the image below.

We have seen on many Fridays that the ASI use to recover and close with a long tailed candle. It happened today too. That doesn't say that all is well with the index. Need to see the candle on Monday to  close above today's with considerable change in the momentum. If not the dismal performance on the ASI will prevail for quite a while.

Aitken Spence Plc - SPEN.N.0000......Expected Target 57.70!!!

SPEN.N.0000 makes a potential counter which will have a short to medium term rally from now onward. Strong volumes can be seen changing hands in the last 10 days, within a range between 50.00 and 53.00, overshooting to a high of 56.50 in the interim. As such 56.50 remains the present Resistance and the Support being 50.00. In the short term we could see the stock re-testing 56.50. If it's not going to break out there, then the stock will pullback to the top of the range at 53.00. Once the consolidation is complete around 53.00, we could see a check at 56.50. Based on the volumes changing hands at that, thereafter we can expect a break out to test 57.70. The uptrend can finally test 59.50 before a short term correction takes place. If the said rally ends between 56.50 and 57.70, and try to move side ways in the range between 50 and 53, you must stop below 50.00. Until it closes below 50.00 on strong volumes you should not stop the trade. A rally will be strongly supported provided that the Company will continue to show positive fundamentals.

ASI will find support within a range below 6371, based on Fib Extensions

The highest the ASI reached thus far this year was 6605 on the 21st of Feb. Then it hit a low of 6417 on the 28th of March. Thereafter it reversed to test 6605, but failed to move up there. However the top at that was 6561 on the 18th of April.  Fib extensions were drawn based on these 3 points. The completion of the 1 time down trend is around 6371. Mostly the ASI up or down tests 1.27 area, and that is around 6321 points. If the trend is not going to change at the present levels, it will certainly test this range. Any trend change will 1st test between 6450 and the 100sma at 6492 points.