FKLI Futures Trading - Bursamalaysia
This will chronicle trading in the FKLI & FCPO futures. If you don't like what you see/read in this blog, just surf away. These opinions are our personal opinions and just a record of our thoughts..."In evolution, it’s not the biggest, the fiercest nor the smartest that survive, it’s the one that changes the fastest.” I.e. the key word is to adapt the trading style to the markets, until it stops working
Wednesday, February 28, 2007
20070228 So the authorities came out to support the market, or rather "buy on valuation". I can distinctly remember in 1998, during the height of the Asian Financial crisis, the PM then said, "we will issue RM6 billion of bonds to buy into the KLSE. At the PE valuations, we will be profitable..." The CI dropped from 800 at the time to 265, before rebounding. Of course, by holding the investments for long enough,(9 years) they made money. This has a lesson, "stock market rewards long term investments." Will history repeat itself.(like the weekly RSI going above 90)
Tuesday, February 27, 2007
20070227 17:15. A day of plunging stock prices, with the fkli following suit. We have been aware of the weekly technical overbought condition of the RSI getting above 90, despite the chorus from the experts calling for 'good fundamentals' and 'fund flows into the KLSE', pointing to what they call a technical uptrend intact market. That is until today was valid.
20070227 0952. Thes was what Dow Jones reporter eked out from the dealers, who are the specialists in the market: "0035 GMT [Dow Jones] KLCI may open higher, possibly rise to around 1280, as investors cheer mildly positive domestic newsflow. Charts indicate market's uptrend still intact; dealer expects KLCI to hold 1270-1280 range with upside bias aided by good set of quarterly results from government-linked companies while generous dividend payments likely to lend support to the market. "Penny stocks and speculative issues are likely to dominate trade in terms of volume but there is some confidence that foreign funds are among buyers," he adds. KLCI ended down 0.8% at 1272.87. (VGB) "
Didn't turn out as expected judging from the fall in the March FKLI.
Monday, February 26, 2007
Is it Kuala Lumpur Stock Exchange or Bursamalaysia
20070226 This is the report by an eminent 'analyst' of equities in Malaysia. The report still refers to the KLSE or Kuala Lumpur Stock Exchange. To my knowledge, since the demutualisation in 2004, there is now no more KLSE, but instead Bursamalaysia. As well, the market index is the KLCI or Kuala Lumpur Composite Index, and not the KLSE Composite Index. It makes me wonder whay people, and very knoledgable and experienced analysts are stuck in old ways and resistant to change. Anyway, it is just a matter of names. Even students know that the exchange is Bursamalaysia now, and only formerly known as the KLSE.
Thursday, February 22, 2007
Wednesday, February 21, 2007
20070221 There are gems out there, if you look hard enough. Insas Bhd, had a big cash pile and marketable securities, which the reports on Feb 16, reported as RM0.58 per share value in the balance sheet. This cash pile did not materialise overnight by magic. For the astute investor/trader, they would have recognised this one, two or even three years back and could have accumulated a "value investing" position and be well positioned for this current bull market. Insas Bhd was trading between 0.22 and 0.40 in 2006, but yet no one had the foresight to take positions in this stock. As of today it closed at RM0.985. As my friend puts it, "You would be on the air-cond bus and be sitting pretty." There would be no headaches or pressure to get in on the bull market at high prices right now.
Friday, February 16, 2007
20070216 One of our stock picks (Jan 23 2007 as a 'laggard stock') for the year, AIGB.
Thursday, February 15, 2007
Wednesday, February 14, 2007
Tuesday, February 13, 2007
20070213 17:15. Since the oversold condition of the RSI, coupled with divergence, Now the KLCI has settled higher than then, with corresponding higher movement from the FKLI.
Monday, February 12, 2007
Friday, February 09, 2007
20070209 1715 pm. "engulfing bearish" candlestick pattern could signal the start of the correction. Coming into today there were few factors that signalled the start of the possible correction:
I went out for dinner at the local teochew porridge restaurant. The lady shopowner was discussion stocks like Affin and Faber with a customer, pouring over the stock section of the newspaper.
- Expert analysts were seeing the market as being "not overbought" when RSI is above 80, possible blow off top pattern, parabolic rise in stock prices with gapping up vertical action. They see what they 'want' to see, and fail to see the wood for the trees.
- Absolute deadweight leading indicator stocks that never fail to move at the end of uptrends start moving up as people search for 'laggards'. Won't mention names but I think experienced professional traders know what names they are.
- The talking buzz yesterday was that "foreigners were piling money into Malaysian stocks, with expectations of earnings growth of 20%. And not just blue chips, absolutely every damn stock." A tenet of value investing is when return on equity is enough to create positive return on capital employed, then growth is there and value is created. But when prices run up 30 to 35% so far (in some cases 100 to 200%), stocks are overvalued.
- I called up a friend to tell them about the surge in Magnum Corp shares from 3.16 to 3.42 this morning. Said "I won't be selling until RM4..., they tell me the KLCI can surge another 300 points." When expectations become unrealistic....time to be careful.
Thursday, February 08, 2007
20070208 Deutsche Bank said today Malaysian market is still bullish and not overbought. I don't know about you, but looking at the KLCI chart, it looks pretty overbought to me. Sometimes these people may be brilliant at interpreting fundamentals, but technical analysis skills need improvement. Fundamental data sets the tone for the Medium to longer term horizon, but regard must always be given to technicals for trade timing, exit and entries, in my honest opinion. But still, once you have good fundamentals behind you, there is no temptation to fall prey to 'stock tip' from acquaintances to get into a spec stock.
"There is the plain fool who does the wrong thing at all times anywhere, but there is the Wall Street fool who thinks he must trade all the time."J Livermore
THE END OF AN ERA
From Dragons and Bulls by Stanley Kroll
Intro and Foreword
The Importance of an Investment Strategy
5 The Art of War, by Sun Tau (circa 506 BC) and The Art of Trading Success (circa AD 1994)
That's the way you want to bet/a>
Long-term v Short term trading
Technicals v Fundamentals
Perception v Reality
Part 1: Winners and Losers
Part 2: Winners and Losers
Sun Tzu: The Art of War
Those who tell don't know, those who know don't tell
Why there is no such thing as a "bad market"
The Secret to Trading Success
The Experts, do they know better?
Risk control and money management
The 'good bets' business by Larry Hite
Don't lose your shirt
Ed Sykota's secret trend trading system