Tuesday, December 27, 2005
Maiden Meiban!
I first knew about POEMS when i joined this stock challenge way back in august. Since than, i have gone on to open an actual account with Phillips and had my virgin trade somewhere in mid October. I would not exactly call it trading (more like punting), i was oblivious to dangers in the world of equities. I had my second trade and a third and that was when i recorded my first lost. A large lost in my eyes. I was overwhelmed by greed to earn the so called quick buck. I contraed and paid dearly for this greed! Having reflected from that incident, i swore not to make stupid trades; trades from the heart. Trading is not for the faint hearted, it is for the well informed and the disciplined. Having paid this expensive school fee, i embarked on my life long goal to be compassionate rich person.
The first steps included immense reading. Immediately after my final paper on 28/11/05, i went to the HSSML to borrow a few books on stock trading. They were "Come into my trading room" by Alexander Elder and "Candlesticks Charting" by Steve Nison. Both books are very informative and i highly recommend them to anyone who are interested to learn trading. Technical Analysis was my new buzz word and i began my first foray into charting. Meiban is a company involved in contract manufacturing of plastic components and the peak of oil prices of $70 in recent months hurt the stock badly. Although the price of crude oil has fallen to $58 now, the stock prices are still in a downtrend. Curious, i did a simple technical analysis applying what i have learnt from the books i have read, i came up with the chart below. As the price of crude oil stabilises at $50-$60 dollars, i can only wonder if the price of Meiban will rebound off its downtrend and go into an uptrend.
1. 22 MA is turning up
2. Bullish Divergence spotted on MACD Histogram
3. Stochastics is oversold and the slow line has crossed above the signal line
4. RSI Index is oversold and increasing.
Strong support at $0.35 and after considering these few indicators, i entered a paper trade on this counter. I decided on paper trading to gain exposure and experience before i reenter into this precarious market. I do not know when i will reenter but i can only say that i will continue to read up and improve my knowledge in this world of trading. The next book that i would be reading is "Technical Analysis of the Financial Markets" by John Murphy.
The desire is strong! The desire to outperform everyone expectations is stronger! The desire to reach my goals is unfanthomable!
The first steps included immense reading. Immediately after my final paper on 28/11/05, i went to the HSSML to borrow a few books on stock trading. They were "Come into my trading room" by Alexander Elder and "Candlesticks Charting" by Steve Nison. Both books are very informative and i highly recommend them to anyone who are interested to learn trading. Technical Analysis was my new buzz word and i began my first foray into charting. Meiban is a company involved in contract manufacturing of plastic components and the peak of oil prices of $70 in recent months hurt the stock badly. Although the price of crude oil has fallen to $58 now, the stock prices are still in a downtrend. Curious, i did a simple technical analysis applying what i have learnt from the books i have read, i came up with the chart below. As the price of crude oil stabilises at $50-$60 dollars, i can only wonder if the price of Meiban will rebound off its downtrend and go into an uptrend.
1. 22 MA is turning up
2. Bullish Divergence spotted on MACD Histogram
3. Stochastics is oversold and the slow line has crossed above the signal line
4. RSI Index is oversold and increasing.
Strong support at $0.35 and after considering these few indicators, i entered a paper trade on this counter. I decided on paper trading to gain exposure and experience before i reenter into this precarious market. I do not know when i will reenter but i can only say that i will continue to read up and improve my knowledge in this world of trading. The next book that i would be reading is "Technical Analysis of the Financial Markets" by John Murphy.
The desire is strong! The desire to outperform everyone expectations is stronger! The desire to reach my goals is unfanthomable!
# posted by guanoe @ 9:07 PM 
