3.1/2016 - Follow-up on the chart pattern of Tek Seng Holding Berhad

I talked about a chart pattern called "Three Inside Down" yesterday and this post is a follow-up of what remained unknown until the market closed today.

Three Inside Down is a candlestick formation that is found at the top of an uptrend. It means that the uptrend is possibly over and that a new downtrend may have started. Picking up what was left behind yesterday. We had candlestick #1 and #2. After the market closed today then we have our candlestick #3. As you can see from the chart, it was another black candlestick and the Tek Seng's closed at the same price as yesterday, at RM1.21.

Is this a sign of an upcoming downtrend for this counter?

According to the criterion, in order to fulfill the requirements of Three Inside Down, candlestick #3 should be "The third candle needs to close below the first candle's low to confirm that sellers have overpowered the strength of the uptrend". The price was under pressure but it able to hold on its ground. It managed to close its today's battle with the same result as yesterday. So, strictly speaking, the criterion are not met because candlestick #3 did not close below candlestick #1. To support my claim, I checked MACD as well. The MACD's blue line seems to be converging with the red line soon. When the blue line crosses with the red line, it indicates a downtrend.

The bottom line. 

I believe this is just a temporary situation and the price will rebound soon. Tek Seng currently is focusing business on renewable energy and I personally think this is a good counter to keep for long term.

PS: Please do your homework before making any trading decision.