Thursday, July 27, 2006

The week in retrospect

After 2 days of slump, today's bullish rally caught everyone by surprise! It started quietly and even up a little. But Tuesday and Wednesday wolves' cries were fresh on my mind. Hence I was cautious. The last straw came when Nikkei just keep going higher and when Hang Seng opened, hell break loose! We had a bit of retracement intra-day and that was when I dare dare tried Sino-Env since from the charts it's showing a breakout. Finally just before closing, I bought Nikkei warrants for a bet Dow Jones is going to rally tonight. Why did I bet on that? The conditions were similar! Similar to what? Just look at Monday's post. Nikkei close high, Hang Seng close high, FTSE trading high...isn't it the same as today? Well, I did say, if it ever happens again, JUST DO IT! This is not a blind bet, but a calculated bet. The conditions were right and I just cannot let fear stop me. If you ask me, do I feel fearful when buying Nikkei babies because it is no guarantee Nikkei is going up tomorrow morning? Yes I do! But my job is just to follow my trading system and get rid of emotions. If I am wrong, I will just make sure I don't lose more than I can afford to by buying a smaller quantity as the warrants can swing wildly.

I just completed reading my 2005 July's articles...woo! We had a great month then! Every other day the market rally despite high oil price, terrorist attack in London. Also, I revisited some lessons and was shock to see a young Decipher anyhow pick stocks!!! I was really just whacking any stocks that show bullishness. Now, I don't do that anymore. Before I buy a stock, there are many factors I would consider other than charts. For one, market direction is important. Actually, I also realise market timing. When you buy when the market is rallying, it is easier to make money. Guessing bottom or anticipating moves may get you wins and losses which nett up could be just small profits. I did plenty of anticipations last year. Livermore said, "Do not use your money to anticipate the next move!" Also, back then, I keep staying out while market keeps making new highs. Bad move! There are times when we can trade, and time we stand aside. The market doesn't rally all the time, if you see one, you try one. When you see a bear, either you stand aside or you try to poke it's backside for a rebound or reversal. Standing aside during a bull rally?? Young Decipher was plain stupid. :P

GrowMoney QuickPicks

Capitaland: Daily chart today close with a bull engulfing pattern. Weekly chart showing a possible bull engulfing. It should be confirmed with another white candle on the daily.

Keppel Land: Weekly chart has a bullish reversal pattern known as Bullish Harami and daily chart has a morning star!!! Very powerful one hor!

ChinaHong: Watch the 1.60 level. It must be broken with high volume.

Celestial: breakout of down trendline with volume.

ChinaSun: Watch for a high volume breakout of down trendline.

Rotary: Watch how it takes out 0.580. A tricky stock which may freeze on you for weeks.

Olam: Bullish reversal on the weekly

DISCLAIMER: This is not an inducement to buy or sell. You should do your own analysis on top of my postings. Copyright © 2006 GrowMoney Blog. All rights reserved.