ASI - Weekly Report as at 22.02.2019

As mentioned in my report on the ASI ( You can view it here ), the market is bearish in the short term, which will trade within a zone between 5831 and 5869. Failure to hold within the zone will expose the market to move in to the 26th of October 2018 territory between 5768 and 5831. Coming week will make it clear to us whether we are going to see a swing low, or a trend failure.

Despite the scepticism with only 12,474 trades happened for the week against 14,677 over the previous week, there had been some interesting price action that is taking place in some of the Counters. SFL.N.0000, AEL.N.0000, JKH.N.0000, OSEA.N.0000 and TKYO.N.0000 are the counters that stood out within the gloomy environment that has made traders loos all hope. The value investors are few and far between, yet some of them are accumulating in millions, and billions at times. They are the winners, whilst the majority are loitering not knowing what to do. Market PE is diving down weekly. It stood at 9.13 against 9.24 times during the previous week. The Counters with over 100 trades were 26 being the lowest for the year, whilst it was 35 during the previous week. There are many Fundamentally attractive counters, but their prices are falling by the day, making them more valuable in the process.

Let's look at the counters that are worth adding to a Traders watch list as follows:

TKYO Weekly Chart
For any counter to show direction either up or down needs volume and volume is what we saw in TKYO.N.0000. I am not talking of the normal board volume only. It had some large trades moving around through out the week. Image below gives you the Large Trades that happened during the week, and can see that there had been many such trades on TKYO taking place during the week.

In addition to these large transactions we saw 1.243Mn shares changing hands in the normal board as well. This is the largest since the last week of October 2018.

We can see a bullish divergence in the weekly chart, but due to the negative Fundamentals in the Reported Results many are not taking this counter seriously. As long as 22/00 is supported it could gather steam. Although we do not need to enter immediately, it's worth watching.

SFL Weekly Chart

This counter got traders' attention due to a disclosure published by the company, with regard to the ongoing exploring of possibilities to get a new investor for the future strength of the Company. In that backdrop Price Action could take it up to test the present Net Asset Value of 14/86. But the Price will not move up to that level in one line. The news mentioned made the traders to over-react which made the prices to retrace back to the price range of 8/30 to 10/30, which is the previous weeks' price range. Counter needs to stay above 8/30 to see a trend continuation in the short term. Any trade must be initiated based on the swing low formation. Watch till then.

OSEA Weekly Chart

With an NAV of over 30/00, and a commendable 12 months Results, this counter brought in fresh interest with above average volumes changing hands, but needs to break out of 17/10 for a major rally to take place. Till then worth watching.

JKH Weekly Chart

Being the most important counter in terms of Volumes and Price JKH must stay above 150/00, any breakdown will not be good for the stock and the market. If we were to see a breakout of 160/00, then it could re-test the 166/00 area, which will be very good for the market.

AEL Weekly Chart

This must hold 13/50 else will be very bearish. We saw a strong support base between 13/50 and 13/80 for the counter during the last week. This support must be there for a strong uptrend. As the counter is trying to defend this area, the out look is fragile. Breakout above 14/00 with volumes is the only time you could trade. Till then watch. The earlier trade idea to enter at 14/00, with a stop at 13/50 is hanging on the line. Any time it closes below 13/50, please stop the trade.

I earnestly hope that the new week ahead will be adventurous for those who dare!!!

What's up with the ASI chart?

I expected the bulls to support the ASI around 5869 which is the open on the 29th of October 2018. But the bears didn't care. The area between 5831 and 5869 is the zone of push and pull that occurred during the Great Coup in October 2018. 5831 being the close of the 26th of October, and as mentioned 5869 being the open of the 29th. In-between these to values we can see the high of the 26th of 5846 and the low of the 29th which was 5831 are placed. This area is very important to be defended. If that happens, then we will see the pivot line being tested around 5888 points. Thereafter there can be another breakdown to test the zone, and if the sentiments are bullish we may see a double bottom recovery, and trend up to test new highs. Else the index will break down below 5831 and drop towards the 26th October 2018 values, between 5768 and 5831.

Forced Selling amidst the selling by foreigners have resulted in the bears bringing down the market forcefully. This is why STOP LOSS is so very critical for Traders. If Traders trade on leverage without knowing how to cut loss They are not Smart Traders at all. IF YOU ARE ONE OF THEM GET OUT OF THAT FOOLISH STRATEGY IMMEDIATELY.  Many say you can't stop loss in this illiquid market, IF SO please keep your money in a Bank Deposit, or do some other venture, as you are not having the knowledge to come out with smart strategies.

ASI Weekly Report - 15.02.2019

ASI is under pressure, and the trend failed to hold the triple bottom at 5921 points. It is now exposing the index to break below 5900, and test 5869 points. Any break there would test 5831 points. It is fair to see how the index line is behaving between this zone of 5831 and 5869 points. At present there is 1 thing that would help the bulls. That is the descending line in green that had acted as a pivot for more than 14 times. If it is going to help the ASI, then its pivot point is around 5909. That is the present level. Based on the overall bearish momentum in the Market it is hard to defend that level, but worth keeping that in mind.

There was a major change in the weekly turnover with 5.8Bn reported during the week against 1.9Bn of the previous week. Mostly Locals Collecting what the Foreigners sold, largest been JKH. Number of Trades was 14,677 against 13,248 of the previous week. Most common and clear sign that was visible was Selling amidst Large volumes, in the normal board as well as in Crossings. This is not Bullish at all. The counters with more than 100 trades were 35, slightly higher over the 31 of last week. 6 of those were over 300 trades, and 2 were over 600 trades.  Those 2 were AAIC and KAPI.

KAPI gave the traders another loud warning of how to trade with a discipline than rumours and stories. But will the traders learn? History has shown that some will never ever learn. Are you one of those traders who doesn't want to learn? Why? KAPI is halted until the company clarifies what the CSE is asking them.

If you aren't a Market Maker, then you must learn to handle your trades.

MBSL Weekly Chart

We gave a trade idea on MBSL in our last Weekly Report. But the counter looked bearish throughout this week, triggering the upper point of the stop loss level of 9/90. This closed at 10/00 which is a psychological price level, but vulnerable to be bearish. Hence we may have to stop if we see 9/90 and 9/80 on a closing basis. We are now watching the low of the previous week which was 9/60.

We are moving to a new week with a bearish bias. Therefore we need to wait with the trades that we have already entered into. Let's watch how the market is going to behave during the week.

Nevertheless I wish that you will gather strength to face the challenges within the week and come out on top.

STOP LOSS, and How Much to Buy to STOP LOSS

Many of the short term Traders are still going behind Rumours and Tips. They do not want to think of the negative side of a trade.Traders love to talk of take overs at Present. They think that taking a company over is why the Prices are shooting up. Many want various types of information to float around, for them to trade. Despite the fact that this approach on relying on other people's stories are not right, Traders want to do their trading based on rumours, tips and information.

Trading be it with Charts, Rumours, Tips or information needs to be done with knowing that a trade can go against you. The moment we talk of Stop Loss many think it's to do with Technical Analysis. Which is far from the truth. Stop Loss is Stopping Your Loss. Hence it is not only for Chartists, it applies to every one who are Trading.

The most difficult part that applies to Stop Loss is the number of shares you need to buy in order to sell out easily. You should not buy a sizable number of shares expecting to stop loss. You must be smart in knowing the volume in order to exit without getting stuck.

It is also wise to recognize a Price Range to Stop Loss. that will help you to prepare yourself to exit without a struggle.

The idea of the stop loss is to take your emotions out of your trading. This is very important. The biggest enemy of your trading success will be your emotions. Have a predefined Stop Loss Range before you think of your entry. Give yourself some time to design your trade, for which you need to have patience. Else you are not suitable for trading.

Finally let me reiterate that the Stop Loss is not only for Technical Analysts. It must be followed by All Traders.

EAST Tested the Target of 15/80 but did not close.

Some of those who bought EAST at or below 14/50 had the opportunity of exiting their trades at 15/80, the 1st Target. That level was just tested, and doesn't mean that the break out is confirmed. Therefore the counter will now have to trade between 13/70 to 15/80. It will be interesting to see how long it will take to break out of 15/80 ON CLOSING BASIS WITH VOLUMES. That is very very important for an aggressive uptrend. For those who'd want to enter, need to watch the Price action between 14/80 and 15/50. Next entry will have to be once the swing low is confirmed, or a break out as explained takes place at 15/80 and above. Till then worth watching on a daily basis.

My earlier post on EAST can be found here:
https://techwatch-esgee.blogspot.com/2019/02/east-potential-trade-target-at-1580.html

ASI Weekly Report with a Difference - 08.02.2019

ASI did not progress commendably well during the week ending 8th of February 2019. It dropped about 18 points WoW. Turnover including crossings ( Deals over 20Mn) was 1.9Bn, dropped from 3.3Bn of the previous week. For an active market the weekly Turnover must be above 5Bn at least, that too without Crossings. 1Bn and over without crossings will be a good figure. We are long way from seeing that.

Traders lost the freedom they enjoyed during the previous 2 weeks. The number of Trades dropped to 13,248 during the week from 22,854 of the previous week. But some counters became active towards the latter part of the week. It will be important to watch those in the new week ahead.

Counters with over 100 trades were 31, from 51 of the previous week, whilst the counters over 300 trades were 7, from the 12 of the last week. Stocks with 600 trades dropped to 2 from 4 of the previous week. This is all because of the consolidation effect of many stocks that had faced with resistance at key Price points. If you are not prepared to Stop, you will never be able to trade consistently when a consolidation is in force. This is because you have many traders who are still using other people's money to trade. Simply put, they are trading on borrowed funds. When many of these Traders are not prepared to Stop Loss, they will get Forced Sold in the end. Therefore consolidations are areas where you need to be very particular about. Nothing would make you worry if you are prepared to stop loss, else you will certainly get frustrated and give up on trading. This has happened to many Traders. Be bold and stick to Trading with discipline, you will be rewarded consistently.

ASI Daily Chart

The present status of the ASI is very bearish, as many of the momentum indicators are downward biased. As such it can test the area around 5920 points. It will be interesting to see how soon it would take for the index to test that level. If the sentiments are to change to the better, that would be a relief. The new week must show a recovery if that's the case.

AEL Weekly Chart

It was on the 19th of last month that I shared a chart on AEL. You can see that here:

https://techwatch-esgee.blogspot.com/2019/01/ael-tripple-bottom-need-weekly-volumes.html

The most important indicator for this stock will be the Weekly Volumes. We saw a trend change in terms of the weekly volumes, with almost 1.2Mn shares changing hands. However this is below the 20WVA, which is at 2.8Mn shares. In my earlier post I gave an entry point at 14/00, which stands today as well. For some reason if the Price fall below 13/50, it will be disastrous, therefore you must stop your trade anytime it falls to 13/50. Increase in volumes towards the average of 2.8Mn, will confirm the upward trend which will then test the 15/00 to 16/00 Resistance zone. 

EXPO Weekly Chart

Despite Expo not being in the over 300 trades, the bullish movement in it will be important for the overall sentiment of the Market. The main shift witnessed was in the Volumes as the weekly volumes was over the 20 week Average. The present momentum could take the price to test 4/80. An entry at or below 4/40 is suggested, with a target at 4/80. At any time the price is to fall towards 4/00 will not be ideal, hence stop at 4/00.

MBSL Weekly Chart

My friend Farhan has shared is trade idea on MBSL, which can be found here:

https://www.facebook.com/photo.php?fbid=10157019632753599&set=gm.2265514570370179&type=3&eid=ARAZv5STVtmy2awNExVCBCa06nTpWORK5TnMAhUPVAU5SoH_ZIPo6ABnOJrCQNOb7qNVTdoa7b2NAuD8&ifg=1

Apart from that the important change can be seen in the Weekly Volumes, where it had been higher than the Weekly average for the 2nd week in a row. This is a clear signal that the accumulation is strong in the counter. Therefore the trade idea suggested by Farhan makes sense. That Trade Idea is as follows:

Buy - 10/40 - 10/50

Sell - 11/50 - 11/60

Stop - 9/80 - 9/90

EAST - Potential Trade Target at 15/80 - UPDATE

On the 14th of January 2019 I shared a post on EAST with the above caption, which can be read here:
http://techwatch-esgee.blogspot.com/2019/01/east-potential-trade-target-at-1580.html

There was increased action evident in the counter today, which is good for the short term trend. Biggest move will happen when a breakout is evident above 14/90 and 15/00 with volumes. Those who'd want to trade may enter between 14/30 and 14/50, with a stop now at 13/50, Targeting 15/80.

ASI Weekly Report with a difference

Despite the low sentiments shown in the broad market the Traders were not giving up the Stock Market in Colombo. Many of these Traders do not care as to what they buy and sell, as long as they can buy and sell. They know with experience that they make money and loose as well. But they trade.

ASI overall didn't move up much, but moved up. Just 4 points. But the number of trades for the week ended with 22,854 about 700 lower than the last week, but the 2nd highest in 4 weeks. PE of the market ended lower at 9.36 indicating to the Investors, how attractive the Companies are despite the lower interest shown to pay a premium when investing.  The number of Stocks that traded over 100 trades increased too, from 49 trades of the last week to 51, which is the highest during the four weeks. Therefore the Traders showed that if they are given the opportunity to trade they would come out with interest and freedom. Who is haunting this freedom only God knows. Since 1985 we have finished 33 years, a lot of intellectuals know the causes and they know the answers as well. But due to some kind of inertia the Countries who lagged behind us are overtaking us by giving their Traders the freedom to trade in umpteen ways, but our Traders have to trade with whatever is available. One day/Someday our Traders will get the same freedom and Benefits like their overseas counterparts. Hope we will live to see that day. Till then it's prudent to Trade and keep trading the right way.  At least we can now see that Trading with Charts work in this limited illiquid market as well.

Counters over 300 trades were 12, that was lower than 18  of the last week. Also the stocks with over 600 were down from 8 to 4. This wasn't a surprise as we just finished the month. Normally month end selling and profit taking happen when short term opportunities were available in the past too.

Plantations were busy during the last week, but pulled back during this week. Chartists were not surprised of this, as a pullback was expected since many of those stocks tested previous resistance levels but didn't breakout.

KAPI, SAMP,BFN and HEXP were classic examples of how breakouts are important for new highs. Let's now look at the 4 counters that had more than 600 trades during the week, and see how they would perform during the next week.

SAMP Weekly Chart

19th of January 2019, roughly 2 weeks ago I gave you a trade idea. You can see that here: https://techwatch-esgee.blogspot.com/2019/01/samp-new-trend-formed-trade-idea.html

As you can see I have given a Target Range and Buy Range with a Stop Loss. Buy Range worked well, and the Target range was hit as well. You can see that in the chart below.

I expect SAMP to range bound between 230/00 and 245/00 before a major breakout. Let's allow that to happen before any involvement.

BFN Weekly Chart

This counter was covered in my post on the 18th with a trade idea. You can see that here: 

https://techwatch-esgee.blogspot.com/2019/01/asi-weekly-reportdifferently.html

As you can see in the below chart, you could have bought at the given range and have tested 17/00, which was the highest reached on the 5th and 6th of December 2018. The final target will be at 18/00, but will depend on the pullback which may happen during the next week.

KAPI Weekly Chart

On the 23rd I covered a post on KAPI, which you can see here:

https://techwatch-esgee.blogspot.com/2019/01/kapi-what-is-going-on.html

Just as expected the 17/20 breakout reached and tested the target of 19/00.

We now see a strong support turned Resistance between 19/00 and 23/90. This stock has always been faced with resistance pressure, which had been broken out with strength and vigour. To reach and breakout of that resistance between 19/00 and 23/90 that same strength and vigour must be there. Let's see how successful the present bulls are in doing so. Any one trading now must be aware of this and trade with a stop loss  between 17/00 and 18/00 range. Else do not touch, as there are other opportunities. Let's monitor the price action closely.

MASK Weekly Chart

After a heavy week of trading with volumes during the previous week MASK along with other Plantation Stocks went into a consolidation. But had 831 trades with 656,816 shares changing hands during this week. However the daily volumes were lower than the average volumes that needed for the stock to move higher. At least 200,000 shares needed to be traded on a daily basis for the stock to strongly move and breakout of 13/50 and hit the 1st target of 14/00. Let's watch and wait till then.

In addition to these stocks, we see LDEV,BALA,MBSL,IDL and RHL drawing the attention of the Traders during this week. Let's see how they would perform in the week ahead. I will cover them as and when they would show us opportunities along the way.

I wish you success in your Trading During the next week.