AEL - M-REV Strategy as at 22.05.2020 MACD crossed above zero line. Wait for other signals!!!

ASI,COMB and JKH Daily and 15 mts Charts as at 22.05.2020

ASI as at 22.05.2020

COMB as at 22.05.2020

JKH as at 22.05.2020

Update 7 - Commercial Bank - Buy When Others Fear........Take a look at Set Rupee Amount Investing "RCA STRATEGY"

   RCA STRATEGY   

The challenge of covering updates of this Strategy of Stock Accumulation was daunting. But when you stick to the Rules and Conditions it is not that tough. 

Stock Accumulation can be done in many ways. Two Practical methods are - Buying a Fixed amount of Shares, OR Investing a Set Rupee Amount at Fixed Intervals.

Today I am sharing the Stock Accumulating Strategy of Investing a Set Rupee Amount at Fixed Intervals. This is a favourite Strategy Mr. Benjamin Graham had followed. This is what Mr. Warren Buffet had been telling Investors to Practice. This is one of the Simplest Ways to build a Decent Portfolio. This is one of the best Strategies that you must get to know to Practice. This is called Dollar Cost Averaging or Constant Cost Averaging, and in the UK this is called Pound Cost Averaging. We in Sri Lanka can call it Rupee Cost Averaging. I call it the RCA STRATEGY. 

Are You a Young Executive? Or an aspiring Manager, Perhaps an Entrepreneur who wants to Build Up a Portfolio from a Part of Your Investing funds. You might be a Young Lad who would want to Improve the Habit of Investing and Trading. 

We are going through a period that many of us have never encountered. This is the era the world became a NEW NORMAL WORLD. Yes the changes we are doing to us individually and collectively, is shaping the Present and the Future. 

Colombo Stock Exchange is the Same. We lagged so many infrastructure developments, thanks to Covid-19 has made the Brains behind the Market to act now. That change is Rapid for sure. Not only that... what about the Listed Companies in the Market? They too have embraced these changes and we will know how they are shaping themselves and their Stakeholders. This is a Global phenomena, as such the magnitude of the change can not be quantified immediately. As such the Price action in the Market will swing rapidly too.

RCA STRATEGY is a fantastic one to follow in this backdrop. 

Use it to pick your favourite Companies at your own pace. 

The BASIC IDEA of this is to BUY MORE shares WHEN PRICES are LOW and FEWER SHARES when PRICES are HIGH.

You have to decide on a set Rupee Amount, when you invest. To make things simple you can decide on fixed intervals. 

What you mean by fixed intervals is that you can decide in investing once a Week, Month or Once a Quarter. You can also invest Set amounts per Stock when you are investing whether or not you have fixed an interval. The idea as mentioned earlier is to Buy more at lower prices and Fewer at higher prices, by allocating a fixed rupees amount each time you invest. Is that difficult to do.

This is ideal for those who would want to follow a system and a set of conditions. IF you do not like to follow a system and procedure to invest or trade this will not help you. But if you are that person who likes to be methodical and analytical this strategy will certainly fit you.

Ask Your IA more about it. If not send me a message or comment below. I will be more than happy to chat about it with you.

Strategy - Stock Accumulation

Counter - COMB

Buying Rule: Buy only if the stock is below 100.00

Buy rule 1st amendment : Buying below 91.80 due to 

dividend adjustment

Buy rule 2nd amendment : Will keep accumulating below 

the trailing Average Price

Buy Rule 3rd Amendment : Buying below the current Ave.Price. 

Buying will Stop when the price is higher than the average.

Intervals of Accumulation: 3 times a week. i.e. Mon,Wed and FRI.

Start Date: 06.12.2019

Sell Rule: only if the P/E ratio is 9.8, OR the ROI is above 50%

Trade is still open as at: 22.05.2020 

Cost Per Share based on Fixed Volume - 85.99 (adjusted for dividends)

Cost Per Share based on RCA Strategy = 81.62 (adjusted for Dividends)

Holding Volume - As Per Fixed Volume  = 200,000

Holding Volume - As Per RCA STRATEGY  = 246,923

Amount Invested - As Per Fixed Volume  = 17,197,803.20

Amount Invested - As Per RCA STRATEGY = 20,155,000.00

Dividend income of Rs.345,000/= 

Scrip Dividend is pending

Expected Amount of Shares from the Scrip dividend 4678 as per Fixed Volume

Expected Amount of Shares from the Scrip dividend 5776 as per RCA STRATEGY

period since the start: 166 days as at 22.05.2020

Market days : 71 days

Stock Accumulated Days : 40 Days

Present Target Price 1 - Ave Price + 50% - 133.71

Present Target Price 2 - PE of 9.8 - 164.64

(EPS as at 31.12.2019 is 16.80)

M-REV Trading Strategy

From the 12th of May 2020 I started covering a Strategy on AEL, which is called M-REV. It is the combination of MACD,RSI and EMA indicators coupled with Volumes of the Stock.
The Strategy has Conditions to meet for Buying and Selling decisions. These conditions have to be met fully to Buy or Sell.

The following chart is what I did on the 12th, here you will see the conditions of the Strategy.

Now the stock along with many Stocks increased in prices. AEL after a low of 10/60 touched 15/50 that's a 50% return in 2 days. It closed the week at 14/50. 

The M-REV Strategy is not one to follow if you need to trade swings that you see in Price volatilities. For that you have many other strategies. Based on this strategy you have to wait until conditions are met to Buy or Sell. But for now we shall wait until the Conditions are met to Buy.

Price action along with Volume as at 15th of May is given in the Chart below:

CSE after COVID - Colombo Stock Exchange Opened for Trading After 8 Weeks

Covid-19 and many other issues made the CSE to close trading for nearly 8 weeks, for the First Time since it started in 1985. 

It in fact resumed business yesterday the 11th of May 2020. Market survived only 38 seconds for business on that day as the Prices of Stocks in the S&P SL 20 Index took a hit of 10% at Pre-Open Session, and as it moved into Normal Market Sessions the 10% circuit breaker triggered closing the market then and there. 

Today the 12th of May the 5% circuit breaker for the S&P SL 20 triggered just 9 minutes in to Normal Session of Trading and, the Market was closed for 30 minutes.  Index survived to be over 5% during the rest of the session till the closure of the Market for the Day. Finally the ASI which is the Index covering all the Listed Counters suffered a fall of 3.2%. Despite a Shortened Trading Session of 3 hours instead of the Normal 5 hours in the CSE, the Turnover and the level of Trading was commendable. Turnover for the Day was Rs. 3.6 Billion and the number of Trades were 8050. 

Many of the Major counters dropped considerably, some recovered, some didn't.

As I am more interested to update you regards the price action of the market I have shared here the Daily Chart of the ASI. As you can see in the chart we will see the market trying to test 4000 before a rebound. However as shown by the RSI the market is extremely oversold, which could help the market to re-bound. But with many things are so uncertain due to the Pandemic the said re-bound will not be able to be defended without the backing of Fundamentals.  Since the RSI is so low we might see the index rebounding before testing 4000, which is a possibility. However since there are no indications to that happening we have to see whether the ASI is falling towards 4000 before a reversal.

Whoever would want to adhere to Strategies in Investing and Trading will be rewarded without a doubt. But how many are doing that? How many would know whether they are Investors or Traders in the First Place. If you want to follow Strategies and succeed please do not hesitate to comment.

Online Trading and Technical Analysis

Watch this video if you are new to Online Trading in Sri Lanka

යාවත්කාලීන කිරීම 6 - කොමර්ෂල් බැංකුව- COMB.N.0000 - අනෙක් අය බිය වන විට මිලදී ගන්න!!! ඔවුන්ගේ තන්හාව වැඩි විටදී විකුනන්න!!!

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COMB හි මෙම උපායමාර්ගය ආවරණය කල සම්පූර්න කාල වකවානුවේදීම, මිල ක්‍රියාකාරිත්වය පහළට නැඹුරු විය. දැන් අපි අපේ ජීවිතයේ වඩාත්ම සිතාගත නොහැකි කාල පරිච්ඡේදයක් පසුකරමින් සිටිමු. ඔබ 1918 සිට 1920 දක්වා කාලයේ තරුණයෙක් ව සිටියානම් Spanish Flu නමැති උණ පැතිරී ගිය අවධියේදී ඔබ අත්විඳි දේ අපට පැහැදිලි කළ හැකිව තිබුනා. නැතහොත් එය නිසැකවම එක්සත් ජනපද ජනාධිපතිගේ සිට පෘථිවියේ ලාබාලම වීදි පිරිමි ළමයා දක්වා අලුත් දෙයක්බ ව නිසැකයි . මීළඟ මාසය, කාර්තුව, වසර, අවුරුදු 2, අවුරුදු 3 හෝ අවුරුදු 10 තුළ කුමක් සිදුවේදැයි කිසිදු ආයතනයක් නොදන්නා 

තත්වයක වර්තමානයේ එය විශාල අබියෝගයක් බව නොරහසකි.

දිගු කාලීනව දේවල් හොඳ අතට හැරෙනු ඇතැයි අපි සැවොම ප්‍රාර්ථනා කරමු. පෘථිවියේ ධනවත්ම මිනිසාගේ සිට දුප්පත්ම දුප්පතුන් දක්වා ඇති එකම සහතිකය එයයි.

දැන් මිල යනු ඔබ ගෙවන දෙයයි. වටිනාකම යනු ඔබට ලැබෙන දෙයයි. අවස්ථා ලැබෙන්නේ කලාතුරකිනි. රත්තරන් වැසි වැටෙන විට, බාල්දිය එළියට දමන්න, ඇඟිල්ල දිගු නොකරන්න. ආයෝජකයෙකු ලෙස ඔබේ මිතුරා පුළුල් ලෙස බිය වන්නේ, එය කේවල් කිරීමෙන් මිලදී ගැනීම් සඳහා සේවය කරන බැවිනි. අපි මේස් හෝ කොටස් ගැන කතා කළත්, මිල පහත ඇති විට ගුණාත්මක වෙළඳ භාණ්ඩ මිලදී ගන්න. අන් අය කෑදර වූ විට බිය වීමට උත්සාහ කරන්න - අනෙක් අය බිය වන විට පමණක් කෑදර වීමට උත්සාහ කරන්න. අපට සිදු වන හොඳම දෙය නම් විශාල සමාගමක් තාවකාලික කරදරයකට වැටෙන විට, ඔවුන් ශල්‍යකර්ම මේසය මත තබා ඇති විට ඒවා මිලදී ගැනීමට අපට අවශ්‍යය. සාධාරණ සමාගමකට වඩා අපූරු සමාගමක් සාධාරණ මිලකට මිලදී ගැනීම වඩා හොඳය. ආයෝජකයා සඳහා, විශිෂ්ට සමාගමක කොටස් ඉතා ඉහළ මිලක් ගෙවා අයිතිකරගැනීම පසුකාලීන දශකයක වාසිදායක ව්‍යාපාර වර්ධනයන්හි බලපෑම අහෝසි කළ හැකිය. ආයෝජනයේ ප්‍රධාන දෙය නම් කර්මාන්තයක් සමාජයට කොතරම් බලපෑමක් ඇති කරයිද යන්න හෝ කොපමණ ප්‍රමාණයක් තක්සේරු කිරීමද නොවේ. එය වර්ධනය වනු ඇත, නමුත් ඕනෑම සමාගමක තරඟකාරී වාසිය තීරණය කිරීම සහ සියල්ලටම වඩා එම වාසියෙහි කල්පැවැත්ම තීරණය කරයි. කාන්තාවන් නව දෙනෙකු ගැබ් ගැනීමෙන් ඔබට මාසයක් තුළ දරුවෙකු බිහි කළ නොහැක. ඔබ වසර දහයක් සඳහා කොටසක් අයිති කර ගැනීමට අකමැති නම්, එය විනාඩි දහයක් සඳහා අයිති කර ගැනීම ගැන සිතන්නවත් එපා. කැපී පෙනෙන කළමණාකරණ සහිත කැපී පෙනෙන ව්‍යාපාරවල කොටස් අප සතුව ඇති විට, අපගේ ප්‍රියතම රඳවා ගැනීමේ කාලය සදාකාලිකය. වෙළඳපල චලනයන් විශ්වසනීයව පුරෝකථනය කළ හැකි ක්‍රමයක් මා නොදන්නා බැවින්, හොඳ සමාගම් කොටස් මිලදී ගැනීමට මම නිර්දේශ කරන්නේ ඔබ අවම වශයෙන් අවුරුදු පහක් වත් ඒවා තබා ගැනීමට අපේක්ෂා කරන්නේ නම් පමණි. කෙටිකාලීන ලාභ අපේක්ෂා කරන අය වෙනත් තැනක බැලිය යුතුය. ආයෝජනය‍ යනු හොඳ වෙලාවට හොඳ සමාගම් තෝරා ගැනීම් සිදුකිරීම සහ ඒවා හොඳ සමාගම් ලෙස පවතින තාක් කල් ඔවුන් සමඟ සිටීමයි.

ආයෝජකයෙකුගේ වැදගත්ම ගුණාංගය වන්නේ බුද්ධිය නොව ස්වභාවයයි. ඔබට අවශ්‍ය වන්නේ සමූහයා සමඟ හෝ සමූහයාට විරුද්ධව සිටීමෙන් මහත් සතුටක් නොලැබෙන ස්වභාවයකි. මම ඔබට කියන එක් දෙයක් නම් ඔබට කළ හැකි නරකම ආයෝජනය මුදල් ය. හැමෝම කතා කරන්නේ මුදල් රජ වීම ගැන සහ ඒ වගේ දේවල් ගැනය. කාලයත් සමඟ මුදල් වල අඩු වනු ඇත. නමුත් හොඳ ව්‍යාපාර කාලයත් සමඟ වටිනාකමක් බවට පත්වේ.

මා මෙහි ආවරණය කරන ක්‍රමෝපායේ පදනම, ඉහත සඳහන් උපුටා දැක්වීම් වලින් ආනුභාව ලත් ක්‍රමෝපායකි. මේවා වටිනා කියමන් යැයි අප කියන්නේ නම්, යම් අවස්ථාවක දී ඒවා භාවිතා කළ යුතු අතර,එම කාලය දැන් පැමින ඇත.

පහත දැක්වෙන්නේ COMB උපායමාර්ගය හා වර්තමාන තත්ත්වය පිළිබඳ විස්තර ය. වර්තමාන වෙනස්වීම් සමඟ නොනවත්වා තබා ගැනීමේ උපාය මම යාවත්කාලීන කර ඇති අතර ඒවා දම් පාටින් ඉස්මතු කර ඇත:

උපායමාර්ගය Strategy - කොටස් සමුච්චනය Stock Accumulation

කවුන්ටරය - COMB

මිලදී ගැනීමේ රීතිය: තොගය 100.00 ට අඩු නම් පමණක් මිලදී ගන්න

මිලදී ගැනීම සන්දහා 1 වන සංශෝධනය : ලාභාංශ ගැලපුම හේතුකොටගෙන 91.80 ට අඩු අගයකට මිලට ගැනීම

මිලදී ගැනීම රීතිය 2 වන සංශෝධනය:  වර්තමාන  සාමාන්‍යය අගය වන 89.14 පහත කොටස් රැස් කරගැනීම

ක්රොට්ස් කරගන්නා කාල පරතරයන්: සතියකට 3 වතාවක්. එනම් සදුදා, බදාදා සහ සිකුරාදා.

ආරම්භක දිනය: 06.12.2019

විකිනීමේ රීතිය : P / E අනුපාතය 9.8 ක් නම් හෝ ROI 50% ට වඩා වැඩි නම් පමණි

මෙම කොටස් එකතු කිරීම තවමත් විවෘතව ඇති දිනය: 20.03.2020

කොටසක පිරිවැය - 89.14 (ලාභාංශ සඳහා සකස් කර ඇත)

RCA මත පදනම්ව කොටසකට පිරිවැය - 86.54

දරණ පරිමාව - 180,000

ආයෝජනය කළ මුදල - 16,390,035.20

ලාභාංශ ආදායම රු .345,000 / =

ස්ක්‍රිප්ට් ලාභාංශ අපේක්ෂිතය

ආරම්භයේ සිට කාලය: 2020.03.20 දිනට දින 105 ක්

වෙළඳපොළ දින: දින 63 යි

වර්තමාන ඉලක්ක මිල 1 - සාමාන්‍ය මිල + 50% - 133.71

වර්තමාන ඉලක්ක මිල 2 - PE 9.8 - 164.64

(2019.12.31 දිනට EPS 16.80 වේ)

පහත වගුව:

Update 6 - Commercial Bank Plc - Buy when others fear, and blood is on the street

Right along the coverage of this Strategy on COMB, the price action was tilted downwards. Now we are going through the most unimaginable period of Our lives. If you were a young chap during 1918 to 1920 you might be able to explain to us what you experienced during the Spanish Flu. Else it is certainly something new from the President of the United States to the youngest street boy in the planet. Times are challenging to the point that no body knows what will happen in the next Month, Quarter, Year, 2 Years, 3 Years or 10 Years from now. We all humans would want to wish that in the long run things will be certainly better. That's the only certainty from the Richest Man on Earth to the Poorest of the Poor would say with super confidence.

Now Price is what you pay. Value is what you get. Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.Widespread fear is your friend as an investor because it serves up bargain purchases.Whether we're talking about socks or stocks, buy quality merchandise when it is marked down.We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.The best thing that happens to us is when a great company gets into temporary trouble, We want to buy them when they're on the operating table. It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price. For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments.The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.You can't produce a baby in one month by getting nine women pregnant. If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes.When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever. Since I know of no way to reliably predict market movements, I recommend that you purchase Good Company shares only if you expect to hold them for at least five years. Those who seek short-term profits should look elsewhere. All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies.

The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd. The one thing I will tell you is the worst investment you can have is cash. Everybody is talking about cash being king and all that sort of thing. Cash is going to become worth less over time. But good businesses are going to become worth more over time. 

The basis of the Strategy I am covering here are inspired by the above quotes by a famous investor who needs no introduction. If we say these are valuable sayings, then we need to use them at some point, and that is now. 

The following are the details pertaining to the COMB Strategy and the present status. I have updated the strategy to keep abreast with the current changes and they are highlighted in Purple:

Strategy - Stock Accumulation

Counter - COMB

Buying Rule: Buy only if the stock is below 100.00

Buy rule 1st amendment : Buying below 91.80 due to 

dividend adjustment

Buy rule 2nd amendment : Will keep accumulating below 

the trailing Average Price - Present Trailing Average is 89.14

Intervals of Accumulation: 3 times a week. i.e. Mon,Wed and FRI.

Start Date: 06.12.2019

Sell Rule: only if the P/E ratio is 9.8, OR the ROI is above 50%

Trade is still open as at: 20.03.2020

Cost Per Share - 89.14 (adjusted for dividends)

Cost Per Share Based on RCA - 86.54

Holding Volume - 180,000

Amount Invested - 16,390,035.20

Dividend income of Rs.345,000/= 

Scrip Dividend is pending

Period since the start: 105 days as at 20.03.2020

Market days : 63 days

Present Target Price 1 - Ave Price + 50% - 133.71

Present Target Price 2 - PE of 9.8 - 164.64

(EPS as at 31.12.2019 is 16.80)

Below is the Chart: