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.

3/2016 - Follow-up on Tek Seng Holding Berhad

I am writing this because an incident happened earlier this morning and I think it is worth writing down for my future reference.

On past Saturday, 9-Jan-2016, I posted an article about my thoughts on Tek Seng Holding Berhad (7200) and here is a follow-up of on same topic.

Earlier this morning, my sister/mentor texted me out of sudden and advised me to sell Tek Seng because she thought the recent activities of this counter has been abnormal and speculated a downtrend may be coming. After reading the message, I sold the counter without a second thought and then just continued with my work. Several hours later, just as what was speculated, the counter price dropped several cents and it closed at RM1.21, a 3.2% dropped in total. I must say I am thankful for having a good mentor and I followed my gut.

Now, let's view the incident in a technical point of view.

The chart above refers to Tek Seng's stock price and I have marked the bar with a star which I first talked about it on 9-Jan-16, last Saturday. Today, as you can see from the chart, there is a black candle stick at the end of the line. This sudden change of pattern reminds me of a chart pattern that I studied few years back and I would like to share it here to validate if the information I found before correct. Here's an explanation on "Three Inside Down".

Three Inside Down candlestick formation is found at the top of an uptrend. It means that the uptrend is possibly over and that a new downtrend has started. A three inside down candle stick formation needs have the following characteristics:

1. The first candle should be found at the top of an uptrend and is characterized by a long bullish candlestick.
2. The second candle should make it up all the way down the midpoint of the first candle.
3. The third candle is an unknown at the moment but the expected pattern 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 result will be reviewed tomorrow.

Now, the chart pattern suggests it is the beginning of a downtrend but the MACD result still indicate it is an uptrend. So, will the price keep dropping like what is expected from the chart pattern? Or the price will rebound and rally tomorrow?

PS: This is just a sharing on thought, not a tip on stock trading. Please do your homework before making any decision.

2/2016 - Tek Seng Holding Berhad

My sister introduced Tek Seng Holding Berhad (7200) to me sometime around September last year. It's stock price was around RM0.50 at that period. However, being "uneducated", I wasn't convinced and hence I didn't take any action that time. I was being lazy to take some extra time to look into this stock. As it's price kept climbing to around RM0.60, it caught my attention again and this new high "pushed" me to study its business background.

One of Tek Seng main businesses is to manufacture solar power panel (Tek Seng's original business is manufacturing PVC products but ever since it added solar panel to its business, the public knew it for its secondary business). To add cream on top of a cake, it has good collaboration with one of the renewable energy giant in Taiwan and it is doing good. The Taiwanese company is doing so well that the light shines on Tek Seng, too. So, having both good cooperate news and good financial record, Tek Seng has given confidence to its investors and the public are pushing its stock price higher as time goes.

When the stock price hit RM0.68, I was tempted to buy in but still I did nothing. I wasn't really convinced that time because I had self-doubt. At that period of time, I need to have an assurance from my sister before any trading but Tek Seng wasn't in her radar that time. So, I gave up.

After giving up on that thought, Tek Seng continued to climb to RM0.80++. I regretted of my earlier decision. But still, I bought some because I do have confidence in this company and its business nature.

Now, entering 2016, Tek Seng stock price has reached a new high and the public speculate it will keep climbing. I am not sure what is my target price yet as I am gathering information to come up with a formula that help me to set my target price. Below is the price/timeline of my experience on Tek Seng.

Chart from ChartNexus

To review my decision made in 2015 on Tek Seng, there are some points I would like to summarize:

1. I must do my homework whenever I need to make a decision.
2. After making a decision, be bold to execute it. Do not self-doubt.
3. Do not linger to bad old memory. True, it is sad to miss a good opportunity. In my case, it is a 173.53% opportunity. But I should not let it drags me down. I need to keep looking forward and find a new 173.53% opportunity.