Friday, March 29, 2013

Price Range for KLCI

I would like to share with you one of my recent research on our KLCI prices. From 2010 onwards, KLCI seems to react well with these prices.

In your chart, draw horizontal lines with numbers 1320, 1400, 1480, 1560, 1640 and 1720 across the KLCI chart, and you will realise these are support and resistance lines for our KLCI.

Notice that I use 80 points for the lines, you may try 40 points for shorter term analysis. The purpose of this exercise is to establish a bigger picture of where are the possible turning points. I hope this helps in your KLCI futures trading.

Please note that the study of price range alone does not generate buy or sell signals, this is just an addition to your tools of arsenal for trading. Always remember to use with trend lines to spot the key reversal points.

Happy trading,
Pauline Yong

BTW, my price target for KLCI for 2013 is 1560 - 1800.

Wednesday, March 6, 2013

Choosing Stocks With PRINCE D Criteria

In my book "I Love Stocks" I used a set of financial ratios as stock selection criteria, they are:

PE ratio, Return on equity, Institutional (big players) support, Net tangible asset, Current environment scan, Earnings per share growth and Dividend yield. Taking the first alphabet from each we can get: PRINCE D or we call it the Prince D, like Princess Diana.

In January, I have come up with a list of stocks to share with my students who attended my stock analysis workshop (see the tables below). Many people have been telling me they are waiting for the big crash after election then they will enter the market. Then I asked them, what if there is no crash, and the price shot up after election, would you still buy then?

If everyone thinks there is a crash on certain dates, most likely you won't see one because a stock market crash happen unexpectedly, not on anticipation.

Then when can I buy (into the stocks)?

One good strategy is to buy on stages. Buying on stages will eliminate the negative emotion that is affecting your judgment in stock selection. For example, you may invest 1/3 before election, another 1/3 of your available funds in May, and the final 1/3 in November and hold the stocks until 2014 - 2015. The reason why invest in May and November is because if you look back at the historical prices for our KLCI, there are certain months always experience cycle low, they are: February, May, August and November. If you are a long term investor who has decided to invest regularly in the stock market these months are good entry points for you.

Below are 3 categories of stocks for selection. The first is the dividend stocks, good for FD alternative. 2nd group is small cap stocks as I think small cap stocks offer better capital appreciation than the larger caps now. The 3rd group is the political linked stocks which I believed if BN wins, these stocks will soar.

Everyone has their own investment style, personally I do not like to speculate, I prefer to buy and hold, or I hold until there is fundamental change in the investing environment such as inflation is too high, interest rates are rising or there's a war.

This article is not for stocks recommendation, its for educational purpose.

Happy investing,

Pauline Yong