Journal Entry June 16, 2023

I entered this stock "M" yesterday in the late afternoon. I was entering on the pivot point of reversal. The stock has gone thru a major correction for 1 month. It also has already broken out of its downtrend channel with a hammer candle about a week ago.

I am more of a swing trader. I hold stocks for a few days to a few months sometimes. So, we'll see how long I would hold on this stock.

I am purposely not going to name the stock here in the journal. I'll do that later. I don't want to get into the trouble of spreading securities information publicly and to be construed as influencing other people directly. Please, please, please. I am not a financial expert. I don't have any qualification.

Anyways, the reason why I selected this counter is purely from technical analysis standpoint.

This stock is on a bigger uptrending phase as can be seen from a longer timeframe as per the chart below.

At the bottom of the chart, the stock price has made a double bottom so-to-speak, with the most immediate 2nd bottom rebound higher than the first one.

When the price of the stock is charted out with a channel, it shows that the price is going on an uptrend channel since October 2022.

However, most recently in May 2023, the price peaked and made a huge correction - the price kept on falling and falling for 1 month.

If you look carefully at the chart, during the correction, the price made successions of huge threatening downward candles as it fell through the channel. There were three big red candles, denoting three different "bases" of pullbacks. The last (third) based at the bottom has smaller price volatility. This is an indication that the price has contracted - it is a Volatility Contraction Pattern (VCP) made famous by Mark Minervini.

If you look from afar, the chart pattern shows that it has made a big cup. With the most recent correction, we can postulate that it is making a handle. So, there is a probability that a major reversal after this correction or pullback is very bullish - it will create a cup and handle pattern.

With these information at hand, I am waiting for the downtrend channel at the current correction/pullback to breakout first to confirm a potential entry.

A couple of days back, there was a breakout at the downtrend channel. However, this breakout showed a breakout with low volume. Typically, that is not a valid breakout since it lacked volume. True enough, the price reversed back signalling a fakeout.

However, yesterday the price made another breakout. This time with volume. That was were I entered. However, the price didn't immediately make a big move. It reversed back by the end of yesterday.

And today, this morning, the price kept on going down albeit on low volume. So hopefully it would not push the price until it breaks the support. I put my stoploss for this entry 2 bids below the wick of the last red candle at the bottom.

Oh boy! You guys are in for a treat!

The stock actually reverse back up late afternoon and before closing, it just went parabolic!

Wow!

Oh. My. God.

I am so lucky.

This stock is actually a telco stock. I am not sure what news pushes the price up, I couldn't find anything on the internet with regards to this stock "M" so far. Normally, there must be some news coming out soon to validate this huge interest on this stock.

Looking at the fundamental analysis, the stock showed quite consistent revenue and profit. No surprises. So the stock did not react because of the expectations on earnings. However, these consistent earnings are good enough indication to show that this stock is not risky. More or less neutral.

Okay, I haven't sold this stock yet today. The thought crossed my mind though. Within one day, I already at 10% profit. So, I'll be sure to take some profit off next week whether it continues moving up or makes a pullback. I found that taking some profit off while the stock is still hot is helpful to keep my anxious mind in check. I know that I already make some money even if the stock pulls back next week. This is also a recommendation by Mark Minervini in his books (and interview). A technique called Selling on Strength.

Alright guys. This has been swell. If you enjoy this content, give me some Like, put some Comments. Or you can just give me Tips. I'd really appreciate it.

Till then.

Make. Manage. Manipulate Money.

The Trader Malaya.