Millionaire Trend Trader: The gap is closed

Wednesday, April 23, 2008

The gap is closed

On Monday, the KLCI gap up open at 1278.25, right above the resistance at 1277.69 and hit the intraday high 1288.14 due to the spilled over effect of DJIA's gain of 228 points on last Friday's close. CI was trading downward the whole of Monday due to profit taking activities. Yesterday, the CI started the day with a bit of panic selling as usual because DJIA was down 24 points on Monday's close, however, the CI was gradually trading upward and turn positive at about 4.15 pm. Volume has gradually pick up, in the region of around 600 million shares. This shows the majority public has not regain confidence yet, and the smart-money has been actively accumulating. As Monday was a gap up open, CI may correct downward the re-test the resistance which now turned support at 1268 before it pick up steam to challenge the 1300 points.

The short term trend of CI has gradually turn positive as the 30 days MA has already starts to hook up. The 60 days MA which represents medium term trend is starting to go sideway and so is the 120 days longer term MA. So, the short term is up and the medium to longer term perspective is sideway with a trading range of 1250 - 1300.

On March 17, I mentioned opportunity in disguised, some were doubtful and some were opportunistic. Those opportunistic fellows who called me got on to the boat of Kencana, Sapcres, KPS, Zelan, Huaan, Hubline etc. However, there are also those who say they missed the boat, but the fact is when the boat was there, they didn't recognized it or don't believe that it is a boat, probably due to their lack of knowledge or lack of confidence. So, better revise what you have learned before. Do pay attention to those educational articles that I post here.

Disclaimer: The above is not a recommendation to buy or sell, all suggestions mentioned are purely for academic study purposes for our trend trader club members only, and the author may have personal interest and position in some of the examples mentioned. Any losses incurred if you were to trade base on the study examples above is solely your own responsibility. Do consult your dealer before taking any action.

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What's happening now is that the market remains trading at very thin volumes and that can affect prices, even when just a handful of shares are traded. The decision of any fund to pull out from certain stock hits the price. - Carlos Slim

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Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised. - Warren Buffet

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When people are frightened, they cut their time horizon dramatically, even advisors will say to sell because they see portfolios crumble and they fear people will have nothing left. It's really not rational, but it does happen. - David Dreman

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Analysts have always been overly optimistic.
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A corporation's primary goal is to make money. Government's primary role is to take a big chunk of that money and give it to others. - Larry Ellison

If you believe that some day it's going to happen, some day it probably will happen. You just have to make sure you're there when it's happening, and ideally you're at the front of the parade, and the principle beneficiary of when it happens, but it's not a kind of thing where you just sort of sit back and wait. - Steve Case

I try to learn from the past, but I plan for the future by focusing exclusively on the present. That's where the fun is. - Donald Trump

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The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow. - Rupert Murdoch

The price pattern reminds you that every movement of importance is but a repetition of similar price movements, that just as soon as you can familiarize yourself with the actions of the past, you will be able to anticipate and act correctly and profitably upon forthcoming movements. - Jesse Livermore

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Before this century is over, the Dow Jones Industrial Average will probably be over one million versus around 10,000 now. So for the long-term, the outlook is tremendously bullish if you buy stocks blindly to keep for a century. - John Templeton

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The financial markets generally are unpredictable. So that one has to have different scenarios.. The idea that you can actually predict what's going to happen contradicts my way of looking at the market. - George Soros

Our favourite holding period is forever. - Warren Buffet

If you buy all the stocks selling at or below two times earnings, you will lose money on half of them because instead of making profits they will actually lose money, but you will only lose a dollar or so a share at most. Then others will be mediocre performers. But the remaining big winners will go up and produce fabulous results and also ensure a good overall result. - John Templeton

When I'm bearish and I sell a stock, each sale must be at a lower level than the previous sale. When I am buying, the reverse is true. I must buy on a rising scale. I don't buy long stocks on a scale down, I buy on a scale up. - Jesse Livermore

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Checking the results of a decision against its expectations shows executives what their strengths are, where they need to improve, and where they lack knowledge or information. - Peter Drucker

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Wide diversification is only required when investors do not understand what they are doing. - Warren Buffett

Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception. - George Soros

Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed. - Benjamin Graham

The price pattern reminds you that every movement of importance is but a repetition of similar price movements, that just as soon as you can familiarize yourself with the actions of the past, you will be able to anticipate and act correctly and profitably upon forthcoming movements. - Jesse Livermore

I think you have to learn that there's a company behind every stock, and that there's only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies. - Peter Lynch

Before you can really start setting financial goals, you need to determine where you stand financially. - David Bach

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Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years. - Warren Buffett

Suppliers and especially manufacturers have market power because they have information about a product or a service that the customer does not and cannot have, and does not need if he can trust the brand. This explains the profitability of brands. - Peter Drucker

The key to making money in stocks is not to get scared out of them. - Peter Lynch

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Wednesday, April 23, 2008

The gap is closed

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