Time To Buy Battered Up Syndicated Stocks?

This week was a very interesting week for all those recently battered up & bruised syndicated stocks. Many had fallen anywhere from 50 to 75% from lofty unsustainable highs to perhaps some ridiculous lows. Thats the problem with syndicated plays, on the downside even real values can be ignored during panic falls. However, I have been waiting for a sign that the correction may well be over & that the time for syndicated plays to return has finally come. Syndicated stocks never die...they may fade for a while but they will always be back.

Before we look at stocks, what signal or pattern am I looking for to indicate a reversal in trend? The most important is a bullish candle, the Bullish Engulfing Candle (BEC) pattern. When we find a BEC at price bottoms it is a strong indication of a trend reversal. We have seen that in the futures daily chart where a BEC in mid August caused a strong reversal of the futures into a strong bullish formation that went up from 874 right up to todays high. When this happens in a weekly chart the pattern is even stronger. Remember it must happen after prices have fallen badly, then only is the reversal very strong & bullish. In all these cases the Daily MACD & RSI are +ve & rising, weekly RSI are flattening & starting to show possible rises. Weekly MACD lag prices but are a low levels.

The downside in all these cases are is limited because you are buying at the bottom and the risk-reward ratio is high (except for Iris, I would not recommend this for the faint-hearted).

Iris - we start with the grand daddy of them all. Despite falling from a double peak of 1.38 punters have still been chasing this stock. Amazing, I don't admire their stupidity but you have to give them credit for sheer guts. The recent falls h'ever were very bad & it fell from 1.38 to 0.15 a whopping fall of 89%. But last week it formed a strong BEC off a strong support at 0.16. This is very bullish. Resistances are at 0.38, 0.44, 0.65 & 0.72. The signs are that it will rise next week but I am very very wary of this stock so I advise traders to keep an eye on this but don't buy if you are the cautious type. There are equally good buys below.


MTD Infra - fell from a double top high of 1.52 to a low of 0.93, a fall of 39%. It fell to the strong support of 0.94 & formed a strong BEC last week. This happened twice before to MTDi & both times it rose off the 0.94 support to a high of 1.50 giving gains of 58% each time. The BEC this time is large & strong, so next week we should see good upside. Resistances at 1.10, 1.20 & 1.40. If prices reach 1.40 gains will be 36%. BUY with cutloss at 0.93.


Poly Tower - fell from a high of 1.45 to a low of 0.555, a 62% fall. It hit the bottom of 0.555 the previous week & last week rose to form a BEC. The last time PTV too a big fall in May/June it reversed when a bullish piercing candle formed at the low & it rose from 0.58 to 1.45 for a huge gain of 150% in just a month. Last week's BEC at a strong support level indicates the correction is over & prices should reverse up. Resistances at 0.74, 0.85 & 1.00. Very strong resistance at 1.20. Even if prices hit 1.00 this gives a gain of 50%. Buy with cutloss at 0.57.


Satang Jaya - fell from a high of 2.38 to a low of 0.985 a 59% fall in just 2 months. It found support at the historical low of 1.00 (+/- 0.015) & this week it formed a strong BEC. Price falls on Wed & Thurs & a small rise on Fri have basically corrected the strong rise on Tues. BEC at a strong support level is very positive. Resistances at 1.11, 1.18 & 1.30. Further Resistance at 1.52 & 1.60. Even a rise to 1.30 will give a return of 20% but likelyhood of a rise to 1.52 is strong (returns 40%). BUY with cutloss at 0.985.


SYF - fell from a recent high of 1.18 to a low of 0.63, a fall of 46%. It started rising off its lows on 8, 11 & 12 Sept & then fell for 3 days. Despite the 3-day fall it still formed a BEC (see B on chart). The same BEC formed after the previous large fall from a high of 1.86 to a low of 0.68 (May to June - see A). That BEC preceded the rise from 0.68 to 1.18 a gain of a whopping 73%. If the BEC is true this week then prices should rise from now until resistances at 0.85 & 1.09 for a potential gain of 58% (if it hits 1.09). Buy with cutloss at 0.62


Versatile - fell from a high of 0.985 to a low of 0.29 a staggering 70% fall in almost exactly 2 months. At the bottom we saw a Doji the previous week & this week a strong BEC. Is this an indication of the reversal to come next week? After a strong rise on Tuesday it has corrected for 3 days yet shows a weekly BEC. If we follow CS charting this is a strong buy signal. Resistances are at 0.40, 0.44 & 0.49. If it can cross this then next res are 0.55 & 0.65. Even if prices rise to just 0.49 thats a 42% gain. BUY with cut loss at 0.29.