Wednesday, February 1, 2012
Security Name and Company Profile:
Takaso Resources Berhad is a Malaysia-based investment holding company with subsidiaries, the Company operates in three segments: First, trading and retailing in rubber products, baby apparels, infant milk formula and toiletries. Second, manufacturing of condoms, baby products and molds and third which consists of investment holding company and a subsidiary, which is dormant. Currently the company’s subsidiaries were Romantic Family Planning Sdn. Bhd., Universal Sdn. Bhd, Takaso Industries Pte. Ltd., Takaso Rubber Products Sdn. Bhd., Japlo Healthcare Sdn. Bhd., LSR Technology Sdn. Bhd. and Takaso Marketing Sdn. Bhd.
Technical Analysis:
This counter have a nice chart with good price fluctuation because the rubber theme or penny stock always suitable for smart money to manipulate. After last bullish ended at Sept 2011, the stock seem to be quiet but for long term the trend seem like grow in 30 degree (shown in blue arrow). That mean this company have a strong fundamental. According to Warren Buffett value investing, the good stock always has a 45 degree growth chart. That means company really profit all the time and in a growth stage. The price automatic reflects the intrinsic value of company. We call this kind of counter as diamond stock meaning that this counter will finally found by market makers and they will push up to speculate. As a trading strategy, we must ride on the trend before pulling up fast.
Here is the idea, you can buy at low price when oversold using stochastic indicator. The buy signal is golden cross shown by green arrow. For trading buy, you can sell at death cross (shown by yellow arrow) or great chance to take profit when super huge volume appeared for semi bull coun like chart above. For long term trader, you can sell after this counter flying in big wave by smart money.
The stochastic oscillator is a momentum indicator that uses support levels and resistance levels in securities trading. The indicator is developed by Dr. George Lane in the 1950s. It used to indicate location of a current price in relation to its price range in pass over a period of time. Based on historical data, it can predict price turning points by comparing the closing price of a security in N-period price range.
It consist of %D N period exponential moving average of %K and there is only one valid signal—a divergence between %D. When analyzed security in an extreme high or low area, with a crossover on the right hand side, of a cycle bottom, a plain of crossovers can occur many times, but one typically waits for crossovers occurring together with an extreme pull back, after a peak or trough in the %D line with the big movement. It tends to smooth out rapid fluctuations in price if price volatility is high, an exponential moving average of the %D indicator may be taken.
Before reaching turning points prices tend to close near the extremes of the recent range. In an uptrend, prices tend to make higher highs, and the settlement price will tends to be in the upper end of N-time period's trading range. After momentum starts to slow down, the settlement prices will start to retreat from the upper boundaries of the range, this trend reversal causing the stochastic indicator to turn down at the final price high.
Divergence-convergence is momentum in the market use to waning or predicts a reversal may be in the making. In a trading system, an alert or set-up is present when the %D line is in an extreme high or low area and diverging from the price action. The trading signal is when the faster % K line crosses the % D line, but the actual trading action takes place after the signal with little slippage. A phenomenon called “stochastic pop" appear when prices break out and keep going. This is interpreted as a signal to add more the current position, or called “liquidate” if the direction is against the current position.
Buy and sell Strategy:
Buy @ around 0.24
Cut Lose @ 0.165
Next Target Price @ 0.3
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nice post , I always read your blog .actually i am a beginner in share market , so i want more knowledge about stock market malaysia .
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