Wednesday, May 23, 2012

How Accumulation Looks Like

Months ago one of my trading friends was asking me about this one particular stock he had - VLL. He told me about how great the company was doing and kept bugging me questions on how the chart looked, how the PA (price action) was, etc..  It’s a good stock. No doubt about that – fundamentally and technically.

And so I was able to monitor its movements – never got to trade it though.

I'd like to be very clear about this: I don't have any VLL shares nor do I plan to buy.

Just recently, my friend from before asked me again how his stock was doing. This time he was hesitant and was very particular on the BID/ASK board.

Now, one thing that was so interesting about this stock is the continuous accumulation and price control that was so obvious if you paid attention to the ticker, especially during the last minutes of every trading day.

Here's Broker Transactions for this week:
(Click Image to Enlarge)

*This is just an example, may or may not be true.
** You'll get the lion & scarecrow thingy later. ;)

Another thing that interests me now is how the stock has been
 resilient even when Ms. Market has gone mad!

"You're next! And you're Going Down!!!"

Before I go on further, I’d like to throw in this question:
Why and When do fundies, big or small accumulate a stock?
         Answer: They do so when they know that the current price is
low, undervalued, or whatever you may call it, 
and foresee an increase in the stock’s future value.

Ok, now that that’s out of the way, I would like to attempt to explain the accumulation process 
especially when you look at the BID/ASK board. This board represents a lot of statistics and psychology. 
It shows the demand/supply of shares, greed/fear factor, blah blah blah…

Ok ok.. Now I’m sounding a bit too Un-Zeefreaks like. So how about this:

(Click Image Below to Enlarge)

VLL Bid/Ask Board as of 5.23.2012

Don’t you just feel like screaming and pressing that sell button once you see those big walls on the ask side on your favorite stock?

Those basterds, the lions and scarecrows have gone cahoots! And they're out to steal your precious shares!!! They throw big ask orders to scare those who dare look at the board and give them the impression that prices will not go further; While doing this, they bid low and in small amounts, giving the impression that demand is low and that prices are likely to fall. And these small bids don't run out - you sell... and THEY fill the bid orders again and again
 until YOU run out. (We call this "Iceberg" buying)

This process flushes out the "weak hands" and at the same time draws just the right candle on the chart. 
As they say, it's like hitting two birds with one stone.

Accumulation takes time.
Patience is the name of the game.

Now the question is… Will you give in and be eaten?

Here’s another way of looking at the accumulation process:

Yes. Accumulation can be a very nasty phase.
It’s Survival of the fittest.
Eat or Be Eaten.

Sunday, May 6, 2012

Bounce Plays 101

"The Harder The Crash, The Higher The Bounce!"

When playing the bounce, my favorite 'tool' for catching falling knives is the Fibonacci retracement. 
(Works for me most of the time) 

The lines "Buy the fear" or "Buy when there is blood on the streets" have their merits when it comes to technicals. 
But hey! Don't worry, I won't be explaining what I just wrote. 
I just felt like writing it because it felt right. Hahaha. Here I go again.

I'm currently just too lazy to explain how to play the bounce in such lengthy detail. 
After all, there is no such thing as absolute truth when it comes to technicals. 

Only possibilities. 

But to save you from all my nonsense. Here's an example. Watch and Learn:

Another thing to remember when you bet your balls on the bounce:
Never listen to market noise. Don't let your judgement get swayed.


But If you do listen? 

Well... At least try to feel the 'force' and try to be like this guy:

Happy Bouncing!

Currently Applying these on ORE/MARC.
Check my port : (Click Here) - para di nyo masabing i'm giving you crap:

Picks for May 7-11

ORE Chart Update 5.8.2012
ORE Chart 5.5.2012

ORE Chart Update 5.7.2012

ORE Chart Update 5.11.2012

MARC Chart Update 5.8.2012

MARC Chart 5.5.2012

MARC Chart Update 5.7.2012

PHES Chart 5.5.2012
Status Update 5.8.2012 (Did not go to desirable bounce levels)

Additional Notes on Bounce plays:

+ Always observe the "3rd day rule." For those who haven't heard of this rule, it's when you take profit on the 3rd day of a stock's ascent or buy a stock on its 3rd day decline. One very important thing to consider is that when you buy on the 3rd day (for bounce plays), the volume traded should be lower than that of the previous days' decline.

+ When you buy using Fibonacci retracements, make sure the day's closing candle doesn't violate or close below your retracement level.

+ The best candles to watch for when playing the bounce are, the abandoned baby, the hammer, and some variations of dojis. Check out these candles here: 

+ Be sure to go for liquid stocks. Illiquid stocks usually don't bounce.

+ 61.8% and 76.4% Retracements would be the ideal crash-point for pickup.

+ To maximize profits: If on the fourth day during the bounce the stock closes strong (prices closes at the day's high) , hold and sell within the first hour of the next trading day. But in case prices gaps down on the fifth day, do not hesitate to sell when the bell dings.

+ Make a checklist of these notes: the more you have these "ingredients" on the chart, the higher the possibility of a bounce.

Of course, that's just me. Don't believe the crazy trader. Hihihi.

Saturday, May 5, 2012

Request Granted - May

Tsupitas not included.

(3rd Trading Week)
% Change from last week's ending port: -0.75%


(2nd Trading Week)
% Change from last week's ending port: +1.62%


Day 2 - For Bounce play study


May.11.2012 ( Week Ender)

(1st Trading Week)
% Change for the week: +5.78%

 Apr.30.2012 (Week Starter)

May.04.2012 (Week Ender)