Koon Yew Yin 官有缘 - Pivoting moment and cut loss concept
GADANG: Pivoting moment
The Gadang price chart shows the pivoting or turning point of its trend reversal was 88.5 sen. It dropped from a high of 132 sen which is equivalent to Rm 3.30 before the corporate exercise of bonus shares and warrant and share split. The price dropped 43.5 sen from 132 to 88.5 sen.
I have started 10 days ago buying Gadang at 88.5 sen and hope to gain 43.5 sen which is 43.5 divided 88.5 = 49% profit. As you know, Gadang started to drop when it announced its 1st quarter reduced profit of 6.5 sen eps on 27th Oct and most investors are expecting a better result for the 2nd quarter which will be announced before the end of January 2017. I expect Gadang price will continue to go up until it announces its 2nd quarter result.
The last closing price on 16th Dec was 98 sen, a gain of 9.5 sens, a gain of 11% in 10 days.
I have to decide when I should start selling to make profit.
MYCRON: Pivoting moment
The Mycron price chart shows the pivoting or turning point from down to up trend was 81sen on 7th or 8th Dec. It started dropping from Rm 1.16 per share. The high and low difference is Rm 1.16 – 81 sen = 35 sen. I started to buy it at 81 sen hoping that it will recover to Rm 1.16 a gain of 35 divided by 81 = 43%.
The last closing price on 16th Dec was 94 sen, a gain of 13 sen.
I have to decide when I should start selling to make profit.
My cut loss concept: is different from the FA & TA experts. As I continue to buy any share, the price will continue to go higher naturally. I will cut loss as soon as the price drops more than 10% of my last buying price. In this way, I am sure of making money.
As I said I will start buying at the pivoting or turning moment. But our most expert chartists would only recommend buy when the share crosses the 80 or 200 day moving average when the price has already gone up much higher. They will not buy even if its financial analysis is excellent because they want to be sure that it is really moving north. But by the time they recommend cut loss, I would have sold to pocket my profit.
Conclusion:
What I said above is like blowing my own trumpet, very boastful. Luckily I told James Ong, my assistant what I did. In fact, one smart investor, under the pseudonym Stockmanmy wrote his article where he described what I did in i3investor.
If you are interested you can find the article in i3investor as follow:
“ so you also want to become value investor (9) ? Pivotal moments and cut loss
Author: stockmanmy | Publish date: Tue, 13 Dec 2016, 04:58 PM “
Many of friends asked me why I did not buy Mycron while I was buying CSC Steel aggressively. Luckily I did not buy Mycron because CSC Steel is a much better stock basing on basic fundamentals. Why should I buy a not so good stock?
Being the largest CRC producer in Malaysia has the several advantages. It can dictate the selling price of its products and all the smaller competitors have to follow because it can easily lower the selling price, being the cheapest producer, to kill the small competitors.
It can also save cost in buying larger quantity of raw material at any one time. Moreover, it can also save cost of transport which is an important consideration.
All I said seems like I am boasting but it is true. Although I am not a religious person, it seems there is an invisible hand constantly directing me what to do.
All I can say is my luck, I am lucky. The Roman philosopher Zennca said quote “luck is when preparation meets opportunity”
Koon Yew Yin 官有缘 - Pivoting moment and cut loss concept
http://koonyewyin.com/2016/12/17/pivoting-moment-and-cut-loss-concept/
