Technical | Fundamental Analysis Discussion Stocks Listed In Bursa

Thursday, December 4, 2008

Adding To A Loser / 综合指数 2008年 12月 03日 / Composite Index 03/12/2008

Adding To A Loser By Zhuge Liang

The action of a trader/investor increasing a position in an asset when its price is heading in the direction that's opposite to what the investor/trader desires. This is generally not a wise investment decision because unless the asset begins to move in the desired direction, the investor's losses will increase.

An investor might add to a losing position instead of closing it because he or she gets emotionally attached to the asset and has a hard time accepting that it was a bad investment. Once the trade moves substantially in the wrong direction, however, it may be time to consider closing out or re-evaluating the reason for having the position rather than putting more money at risk.

综合指数 2008年 12月 03日

如图中箭头A所示,综合指数稍微上扬,惟还是处于布林中频带(Bollinger Middle Band)以下,这表示综指目前还是处于偏弱的状态。通常综指是必须先上扬突破布林中频带,那综指才能有望出现转强的讯号。

如图所示,布林频带(Bollinger Band)收窄11%,这表示综指正在处于一个调整巩固的格局,直到布林频带再度打开为止。当布林频带再度打开时,综指处于布林中频带的相应位置将是综指新趋势的方向。




Composite Index Daily Technical Analysis 03/12/2008

As indicated by A, although the KLCI ended slightly higher on Wednesday, it is still below the Bollinger Middle Band dynamic resistance. This shows that the immediate outlook for the KLCI is still on the weaker side.

As shown on the chart, the Bollinger Bands Width contracted 11%, suggesting the volatility of the KLCI is still declining, thus a signal of a consolidation. Meanwhile, as the KLCI consolidate, the direction of the KLCI shall remains unclear, until a re-expansion of the Bollinger Bands Width, and the new direction of the KLCI will be determined by the position of the KLCI above or below the Bollinger Middle Band.

As indicated by B, total market volume increased 4.9%, but still below the 40-day VMA level. This shows that the overall market is still relatively quiet as the market sentiment is generally weak. Again, it is usually normal to see lower volume as the KLCI is consolidating. However, if the KLCI should attempt to break its resistances, volume above the 40-day VMA level is need to confirm any breakouts.

As circled at C, the Stochastic continue to rebound after touching 0% level, as a rebound after the KLCI was over-sold. If the Stochastic should break above 30% level, it would break away from the short term bearish region.

In general, the downtrend of the KLCI (T1 and T2 channel) is still in place, and for the moment, we still have to wait until a clearer signal from the Bollinger Bands Width to see if there is any chances for the KLCI to break away from the downtrend.


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