ASI is cooling off - not a place for the weak

Over the years I have encountered that impatience and fear increase people to chicken out and run away from the market. The next problem I have faced as a stock broker is that all come running back only when the market has come to a boiling point. People who gets involve at the right time is only a handful. This is what I've been screaming all along in many ways and styles in this blog for so long. That is my duty. You must know what you are in the Market. Do you want to Invest or Trade?
Don't think to make quick money, you can't do it all the time. If you want to make quick money then you have to do things by breaking the rules and regulations, or unethically, all of which I do not stoop to, and many whom I know.

Even the biggest Billionaires in this market  or any other wont win all the time.

Present ASI is in an up trend since DECEMBER 2008. Biggest issue is the quick rich mentality of majority that is wanting the market moving up according to their pace. Not knowing that there are many human phenomena playing within the Markets. If I can see all what I'm telling  is happening the way I want, I'm the biggest fool in town.

Present pace in the ASI needs to be corrected, as it is moving up too fast.  A 200 point increase a month will add 1400 points into the present index of 6500+ that means it is 7900 points. Even a 100 point move will add 700 points making it 7200 by the year end.

When you look at the chart given in this article you will observe that the 9sma has made itself an active moving average indicator, making it to support and resist the short term movement of the market. This now rests as a short term resistance at 6626 points. The next important oscillator is the RSI, which was at 83 points on the 16th instant, and now has fallen to around 55 points. There are Fibonacci supports at 6535 and 6452 areas.

As we are moving in to a new month it will be interesting to see how things are going to unfold. Let's watch........

Alufab - Breakout can take it up to 50-52 range.

The present Price behaviour is given in the chart below.

Regnis - 5.7 PE at 174.00

Regnis Plc shows a 4 quarter trailing EPS 0f 30.56, as such the PE is around 5.7 times. The dividend was 9.00 per share which was paid in February 2016.

The following chart gives you a brief narration of the present price movements.

White List - My Call - 17.05.2016

PLEASE GO THROUGH THE BELOW MENTIONED LINK. 

MY PREFERENCES ARE IN 4 COLOURS.

STRONG BUY = GREEN

BUY = ORANGE

HOLD =  YELLOW

OTHERS = PURPLE

 My Calls on the White List - 17.05.2016

WHITE LIST - MY CALL AS AT 16.05.2016

PLEASE GO THROUGH THE BELOW MENTIONED LINK. 

MY PREFERENCES ARE IN 4 COLOURS.

STRONG BUY = GREEN

BUY = ORANGE

HOLD =  YELLOW

OTHERS = PURPLE

WHITE LIST - MY CALL - 16.05.2016

Please read - ASI - Can we expect 8000 points before December 2016???

8000 points before December 2016 is unbelievable. Personally I can't even dream to be honest. But the Monthly RSI is giving me something mind boggling.

Based on the monthly RSI, we see the all time high on the RSI was in September 2010 at 91.5 points, when the Index just went over 7000 points. There onwards as we know the ASI peaked at 7800 points in February of 2011. The market crashed for the rest of the months till June 2012. Before the bottom of the ASI the RSI had fallen to 39 points. There onwards the market rallied, and the RSI went higher a little over 70 points, funnily enough again till September of 2014, when the ASI was over 7200 points. As we know the ASI went up to around 7600 in January of 2015. RSI thereafter kept on retracing, amidst many ups and downs of the ASI. The down trend that continued went on till March of this year when the RSI fell to 37 points, and the ASI was hammered down to 5800 points. Did you notice that the RSI in June 2012 was 39 points when the ASI was in the region of 5000 to 4700 points. Then the RSI fell once again to 37 points but the ASI came down to 5800 points in March 2016. Now with the ASI at 6670 points the monthly RSI is around 50 points. Which is the middle point. Usually this can head towards 70 points within an uptrend. That is left to be seen.

Another interesting fact is that the ASI went up from June 2012 to Jan 2015 roughly on a monthly average of over 97 points, and fell to 5800 points on an average of 120 points. But from March low of 5800 to the present level of 6670 points, the ASI has gone up 800 points, averaging 400 points per Month. Therefore it is too fast than the previous uptrend. If we continue at this pace then we will hit 9400 points by December 2016. I do not believe that this is going to be the case. Then if we see an average pace of 300 points per month till December 2016, it will be 300 x 7 = 2100 points, then it will be 6670 points + 2100 = 8770 points. I do not believe this too. Then if we see the index moving up by 200 per month, then it will be 200 x 7 = 1400 points. That means the ASI must end at 8070 points. I tend to believe that this would be a level to watch. If we see the Index moving at the pace we saw last in 2012 to 2015 then it will be 95 x 7 = 665 points, that means the ASI can be around 7335 points. After seeing the index moving up by 800 points in 2 months I'm not going to buy the idea of seeing the ASI going flat from now onwards as many would like to think.

Presently I cant see the index falling below 6500 points. As such the upside is evident. I that is the case then the entire momentum shown in the RSI and the Index will reverse.

ONLY THING THAT CAN HAPPEN FOR THE PESSIMISTIC OBSERVERS IS TO SEE THE INDEX GOING SIDEWAYS AND THE TRADERS AND INVESTORS WHO ARE THERE AT PRESENT WILL BE JUST AS PESSIMISTIC LIKE THEY ARE.

As for me by looking at these charts I believe the ASI will test over 7000 points by September and the closing of the index will determine the level at which the ASI is going to be during this period.

For a strong and robust Stock Market the performance of the underline Company  is highly critical. Therefore the results of the June and September quarters will  be very very important. Hence buy to trade or invest according to a plan. Not because someone is telling you to do so.

WHITE LIST - MY CALLS - 13.05.2016

PLEASE GO THROUGH THE BELOW MENTIONED LINK. 

MY PREFERENCES ARE IN 4 COLOURS.

STRONG BUY = GREEN

BUY = ORANGE

HOLD =  YELLOW

OTHERS = PURPLE

WHITE LIST - MY CALL - 13.05.2016

Profits on Short Term Trades.....Important article

more than 99% who trade in the stock market, trade with a. rumours, b. information, c. stories, d. because the ticker shows the prices are green, e. news papers are showing the market is up, and f. a big shot is buying. These are the reasons many have when they buy shares. all this is pure gambling. If you are reading my posts do not read, because my articles won't benefit that approach.

I encourage you to trade to a plan. You need to plan your buy, sell and stop levels. if you do that then you have completed 90% of your plan. if you love to trade for above reasons, have your buy, sell and stop levels and trade on them. to give an example today there is an article in the papers about lanka hospitals plc. now if you want to put a buy order tomorrow, do it, no worries, but ask yourself how much of profits you want. do you need 1 rupee of profits after cost or more. then ask yourself whether it is achievable. if you think it is achievable then ask the next question from yourself. i.e. what if the decision is wrong, at how much will you sell at a loss. is it an x amount of money or %. once you decide on the BUY, SELL and STOP, then enter the order. then keep a track of your trades, and see whether they have succeeded or not.

This is why I post the following tables regularly. They give you the summary of the profit and loss, and also the list of trades based on the buy, sell and stop dates. this is done because i want you to learn the right way of trading, so that you will be confidently trading and investing in the stock market.

Table 1 shows you that Rs. 21,342.96 was the profit from 36 trades, whilst the loss was Rs. 9,373.41, from 14 trades. As at 10.5.2016 there had been 50 trades in all.

Most of these buy calls were posted in the blog, whilst some of them were communicated to clients.

Table 1:



In the Table 2 below is the list of 50 trades in detail. The important thing I tell any trader is to take the Profits out. This must be done on the provisioning method. Meaning that when you take the pofits out deduct the losses as well. Based on the above figure you could deduct Rs. 1,342.96 out of the profits and take Rs. 20,000.00 out. This way what you have deducted is the amount that will be reduced from the loss of Rs. 9,373.41. Thereafter the loss will have come down to Rs. 8,030.45. The provisioning can be done according to your choice and the above is just one method. What ever the method please do it.

Table 2:



there are many trading strategies, but only one rule to trade i.e. BUY,SELL and STOP RULE.
If You master this then you will reach the ultimate experience, the real effect..........Success and independence. This could lead you to even making trading your main income generator.

Colombo Land - CLND.N.0000 - Has moved into the HSZ - WAIT!!!

CLND has moved into the HSZ - High Security Zone. Needs barracks to be fortified with strong foundations in this region between 28.50 and 30.80 to move into newer territory. DO NOT INITIATE A BUY.....UNTIL
IT CONSOLIDATES, AND BUILD A STRONG BASE.

What happened between 23.90 must happen between 28.50 and 30.80. If a strong base is formed in this area then expect prices move towards 40's. If you wait and buy you can make more than 15% in a very short period.

Patience is the Game strategy here. 

Higher volumes at peaks have made the stockeither to retrace and crash or consolidate.

consolidation therefore is very healthy

if we want to see new highs. 

AEL - UP TREND commenced

29/3/2016 to 30/3/2016 volume increased by 332k to 1.118m, a 236% volume change. Stock moved up from a close of 19.90 to a closing of 20.30. Rallying thereafter to a close of 23.40 on 12/4/2016. 15% rise.On 15/4/2016 the volumes dropped to 349k from 2.114m of 12/4/2016, leading to a change of trend. From a close of 23.70 on 15/4/2016 retraced back to a close of 22.50 on 26/4/2016. The volumes raised to 878.45k that day from 247k of the previous day..

Similar development of volume increase was witnessed on 13/5/2016 as the volumes increased to 1.519m from 240.833k from the previous day. This looks a strong bullish signal, implying a resumption of a new uptrend. I expect 24.00 to be broken one of these days.  Resistance will be at 24.90 and 25.90. I expect the 24.90 to breach and hit a nett 5% target at a price of 25.10. Then to test 25.90, and hit a nett 10% target at 26.40.
Buy at 23.40, Sell 1 = 25.10, Sell 2 = 26.40, Stop at 22.20.
Let's see how long it will take.

WHITE LIST - The Top 20 most traded - 13.05.2016

For all the WHITE LIST enthusiasts I take pleasure in presenting the BUY, SELL, and STOP levels. The table lists out the TOP 20 Most traded Stocks of the WHITE LIST. The SELL levels are in two forms i.e. Sell price with a 5% margin, and a 10% margin. I urge you to strictly follow the STOP LOSS as Stocks are like Humans. They are not Perfect. Hence STOP if the trade is against you.

Constructive Criticism are most welcome. Please state on the comments slot below.

Short Term Trade - MDT Walkers - KAPI.N.0000

Short Term Trade -
Period - within 3 months.
Buy - 44.20
Sell - 5% - 47.50
         10% - 49.70
Stop - 42.00

All Share Index will hit ALL TIME HIGHS

On the 7th of December 2015 I posted thus......

 "Quote"

A must see Chart - ASI target of 8672 points, then 11109 points.

I know you may not believe me if I say that the ASI will go upto 8672, and the completion of the trend will be a whopping 11109 points.

I firmly believe that the re-rating of the Country happened  in 2009. Therefore the trend that started during 2009 for me is the 1st uptrend, which paved the way for the re-rating of the way the market would behave from there on. I think most would agree with me on that. Purely from the price behaviour, we can now see that the trend we saw from the latter part of 2008 to the beginning of 2011, succeeded in basing a promising future for the market and the index in particular.One day before the end of 2008, i.e. 30th of 2008 the index closed at a low of 1454.83, and rallied to an all time high of 7863.74 by 15.02.2015. Thereafter the market just plummeted to a low of 4725.57on 6.6.2012. Thus completing the 1st post war trend.  Based on the Fibonacci extensions  the ASI is trending side ways in the 38.2% region,at present. Was it a planned development? obviously not. Once we breakout of that area, the index would test the next level of 61.8% of the previous trend to 8672 points. Thereafter for the completion of the trend by 100% it could hit the region of 11,100 points. I personally believe that this will be a reality. But the fundamentals relevant to the market should support the trend. Therefore the period of this expectation is somewhat far fetched. But that doesn't mean that it's not going to happen in our time. Because we can't forget the fact that we have an entire country to do economic activities after 2009. The chart in question will show us how fast and successful it is going to be. 

"Unquote"

As you can see the index to move from 1800 points to 7800 points took a little over 25 months i.e. December 2008 to February 2011. Thereafter it took roughly about 16 months to retrace from 7800 points to 4700 points. If you break it down on a monthly basis, the market went up by 240 points per month since Dec 2008 to Feb 2011, and fell about 193 points a month from Feb 2011 to June 2012. 

Going back to the above period between 2008 December and June of 2012, the trend extension shows a whopping 11,000 points.  

But the next uptrend that started from June 2012 at 4700 points to the peak of  7600 in Jan 2015, had an average monthly gain of 97 points per month, but the drop from 7600 points in Jan 2015 to 5800 points in April 2016, was a drop of 120 points per month. This movement therefore looks slower relatively to the earlier trend. The main reason for this is the level of leveraging in the market since June 2012 is not as large as earlier. The next being the Fear psychosis, and Panic. Free money that was available is not available any longer. Therefore the aggressiveness that we saw before is not there amongst the traders. The naive attitude and knowledge of the Local participants are not visible as freely as we saw in the past.

The trend extension based on this period from June 2012 to April 2016, shows a completion at 8700 points. 

As mentioned above the curbing of loose and illiterate trading, may slow the pace but certainly not the trend. However experience tells me that at some point the Leveraging will increase and the participation of Institutional and Retail Traders will take the market to where it belongs.