Wednesday, June 7, 2017

Technical Analysis - My Point Of View

I bet you have heard me saying, "I know nuts about TA (aka Technical Analysis)".


I also don't know what pink line, blue line and purple line is about.

I also don't understand how drawing a cup can help me with the trade.


And this is the craziest, how does a dragonfly help to trade?

But I do feel I know something about technical analysis and that is "Support".

This is not done by drawing any lines on the chart. But this done by using your eyes!

In my smartphone, I have this app where I watchlist over 40 counters.

Every day I scroll through the app and look at the 40+ counters. After a while, you will realise, for every counter that "is liquid enough", it will have a support price.

Certain counters will hardly fall below a certain share price, unless events such as consistent bad quarterly results or negative news broadcast about the counter, becomes public news.

Thus, in my opinion, this will be the "Support" price for the counter.

An example is the following counters, which I have been watching for a few months:

- Singtel - $3.700
- Comfort Delgro - $2.400

Another example that have shown what happen when a support price is broken is Singpost.

In my opinion, its previous "Support" price was $1.300. However, since this "Support" price has been broken, the counter has been on a freefall.

Another factor about "Support" price is that I believe it will mainly happen to Blue Chips. This is because I believe this theory will mainly worked on Blue Chips as only these counters are liquid enough or has enough BBs to support the counter at that certain price.

These insights also allowed me to produce "The Stable Stock Analysis" within the Super Scorecard.

It was based on a "forever holding period" view. Therefore, for a counter which passed "The Stable Stock Analysis", the investor should be buying in tranches/batches, whenever the counter reach that share price or a share price lower than that.

The eventual view is that, with good management, the company will definitely be able rise back to a much higher share price over a long holding period.

Pssst... there will be a major change in the future. Please like our Facebook page (T.U.B Investing) and follow me on InvestingNote for the latest updates!

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