Review: Old Favourites - PTower, SYF, Verstl & MTD Inf (BUY)
Lets review old favourites that reached unbelievable heights just to plunge fast & furious leaving a lot of losers. Based on the "Buy when no one wants to buy" strategy, we review 4 stocks, in case of new buy signals bec. many old fav will always make a return to be new fav again.
Strategy: For buy signal we use weekly charts & look for:
- Candlestick buy signal (Hammers, Bullish Engulfing, Doji, Morning Star etc)
- Minimal or negligible volumes - weak holders have sold out & selling on upturns will not be very strong
- Prices must have fallen close to previous bottoms & strong support levels
1) Polytower - The last fall from a peak of 1.53 to a low of 0.58 turned around with a piercing pattern in early June (A). It had also reached supports at 0.58. The turnaround was strong & it reached a high of 1.45 giving a return of 150% for followers of this strategy. However, current prices have NOT reached their lows yet (B). There is no candlestick buy signal although volume is reaching its lows. Also it is still about 0.10 above strong support levels. So PTwr still is in correction mode, no turnaround yet.
2) SYF - After reaching a high of 1.86, SYF fell fast to a low of 0.68. Then it turned around with a hammer/bullish engulfing pattern in mid June (A) & climbed to a high of 1.18 giving a 73% return. Vol reached negligible amounts & it had reached a support level at 0.68. However current prices while close to a support level & on low volume, does not show a candlestick buy signal yet (B). So the turnaround has not come yet, so we cannot buy in yet.
3) Versatile - The last fall reached a low of 0.38 then showed a hammer followed by a strong bullish engulfing pattern. Today vol is very low & it is close to the 0.38 support level but candlesticks still do not give a buy signal. So again we have to wait.
4) MTD Infra is interesting. On 2 separate occassions (A & B) after big falls, prices reversed & rose very strongly when a bullish engulfing candle appeared at the bottom signalling the turnaround. On both occassions it found support at 0.945. This time we saw a long legged spinning top last week & this week a Doji (C) (both bullish patterns) & both found strong support at 1.00. Volume is also negligible. So it meets all our 3 criteria - is this the turnaround?
I call a BUY here & as long as prices do not fall below 1.00 (cutloss) , we might just see a turnaround in MTDI. Resistances at 1.10, 1.20 & 1.40. Lets see if this strategy works. Good luck.
posted by Dr. Siva @ 11:58 pm
2 Comments:
hi doc,
as much as you detest iris, be mindful that Ptower, SYF, Verstl and MTDinfr (amongst others) are all in the same bus with it with the same DRIVER.
My previous point about acc/dist is this - GONE are the days of '93/94 and of the 2nd brd rally of '96 where one can distribute all at the top.
The market's character has changed since then and NOW the ONLY way to distribute successfully is on the way down and at the lows (as long as the low is still higher than my cost on AVERAGE otherwise a change in strategy may mean i may just wanna get out even at a loss. (some drivers can take a 5 / 10m hit if a total exit is achieved - most cant and prefer to roll stock)
The objective to reach a new high is purely psychological becos pricing is, of course, relative and this can be MANUFACTURED for your TA (and hence your buy/sell signals) - how often have you heard someone say 'ITS SO CHEAP NOW!!!' or that even the more sombre and credible 'fibo retracements say so..' or 'its now on elliot 4b..'
As such, irregardless of what the TA says, its most important to recognise the bus driver's COST and QUANTITY. There is no neccesity for him to accumulate at lows - its not like he needs more shares as blocks have been already crossed from the majorities (sudden spikes in volume) and given that most stocks were at thin volumed multi-year lows prior to being driven. This info is for all to see in TA as well - if you know how to look.
my take -
Ptower - lower highs and soon-to-be lower lows.
SYF - a technical may be manufactured to exit a not too large quantity.
Verstl - a hit and run for him, GAMEOVER.
MTDinfra - EPF will continue its sell program an any price above 1.00. They only have 63.9m left. Wanna fight with that?
Care to have an educated guess on IRIS cost? hint - dont forget the PA at 0.15
my apologies for the rambling - i'm taking time off from the market and i've selfishly used your blog for idle chit-chat.
Doraiddd, tks for your comments. I dont like Iris or Versatile, they are useless stocks with I believe no fundamentals. I dont know SYF too well so cannot comment. Polytower & MTD Infra do have some fundamentals tho they are manipulated. The fundamentals mean there will be some intrinsic value, the market will decide that so at some point the selling will end. The key is to ask first whats that point & secondly will it ever rally again.
I chart based on stocks with some fundamentals tho I do comment on others too bec of the interest that many traders (or punters) have, but I always caution them & place very tight stop loss for them to follow. Woe is he who does not place stop loss points.
Either we believe TA or we don't. If we base all trading on what we think or have been made to believe is happening out there (like your EPF selling) even if it is true (and I dont doubt you) but if thats all we have to go on then it is difficult to trade. Might as well throw a coin.
I believe in TA because it has worked, so thats what I use. I also believe in buying at bottoms, bec of limited downside & greater upside. Its hard to lose when a stock is at a bottom.
So lets see if this works then with MTD Inf & PTower at least. If it does I would have made a believer out of you & if it does not ...then I need a new profession....hahahahaha.
Keep blogging & commenting D, thats what makes blogging interesting.
Hope you have a great week.
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