Turnaround play
Documenting for future reference. Paper gains at the moment, but this stock still can lose if make mistakes.Not Buffet investing nor dividend investing strategy.
- Last bought 1.11.- Average price 1.36.
- 2.68% capital still exposed.
Turnaround, cyclical plays means don't bother to look at historical fundamentals.
- They are lagging.
- We are guided purely by price charts.
LT chart
- Downtrend unmistakeable since 2018.- Trying to print a double bottom, with potential breakout, but hard to know. Half the time, instead of breakout, we see sideways consolidation.
ST chart
- I think it's critical to beat RM1.61 - RM1.65 resistance over the coming week(s).- If failed to beat RM1.61/65 and falls, it can potentially fall further, due to confirmed printing of bearish RSI divergence.
- Because of this risk, I will queue to take partial profits near there. I have take some, and will take profit up to 40% of the position. If it does breakout and sustain the breakout, I still have majority position to ride up. If not, it lowers my average cost, with Margin of Safety.
- Hard to say what are the odds - my gut says 50% chance of breakout, 50% chance of failure - I literally have no edge here.
- If it falls, half the time it can fall back to perhaps 1.26-1.30, or lower, or higher.
Don't chase
PS. First double bottom Mar 2020 Covid low. Big zig zag up lasting over 1 year, with at least 5 opportunities to sell on strength and buy back over that 1 year period.
We've just seen the second double bottom in 2023 with a different character (it's normal). My personal expectation is majority of the time, what we see in 2020-21 big zig zag up won't be repeated. If it's a true double bottom, we'll see a different move up. More likely, one that creeps up slowly and climb that wall of worry, that will encourage most buyers to let go their positions so that when it makes a genuine move up over a longer period, most long holders will let go of their positions. (just a personal guess - interesting to see how this pans out the next 12 months).
PS2. When charts print somehing different from expectations, like reading tea leafs, prognosis changes again. I may keep quiet after that. Don't follow, don't chase.
We've just seen the second double bottom in 2023 with a different character (it's normal). My personal expectation is majority of the time, what we see in 2020-21 big zig zag up won't be repeated. If it's a true double bottom, we'll see a different move up. More likely, one that creeps up slowly and climb that wall of worry, that will encourage most buyers to let go their positions so that when it makes a genuine move up over a longer period, most long holders will let go of their positions. (just a personal guess - interesting to see how this pans out the next 12 months).
PS2. When charts print somehing different from expectations, like reading tea leafs, prognosis changes again. I may keep quiet after that. Don't follow, don't chase.
PS3. Whilst this point onwards, I'll be guided by charts, I won't ignore fundamentals either. My initial entry was guided by fundamental considerations. The next quarterly report will also be studied. Only today, I am not looking at fundamentals. Got to know when to look, and when not to look at fundamentals vs charts.
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