Monday, September 20, 2010

How To Spot A Good Trade Part 3

I wouldn't recommend this trade to anyone who has not logged more than 10 years trading experience in the markets. Let me clarify here, its a trade, its not even a trade based on fundamentals. Its a trade based on meeting certain crucial parameters, its a fun trade.

Since this actually happened on Friday, I will be able to go through in detail the steps and thought process. On a normal week, I get tips on at least 2-3 stocks. Usually I do not get many tips as I, more often than not, will drill down on the "real value case" of the tips. Who, why, when .... and then another round of ... why now? So, I have manage to filter down my contacts to the bare minimum as the run of the mill types would not have get much air time with me.

Always keep a track record of each of your "informant" - its a two way thing. Now more often than not, my contacts are really running through their counters through me for verification and veracity. I usually do not act on the information unless they tick the right boxes. I do not cry if a tip goes well and I did not get in, you cannot win them all, you are not supposed to.

It was last Friday and I was driving back to Ipoh for my cousin's wedding. Got the call to look out for UEM Land, my initial thoughts ... hmmm ... sounds good judging from the current good run on index stocks and GLCs. Tick.

I asked for the price range traded for the day, it was up 5 sen still towards the high. Its a Friday afternoon, most traders would have closed off their positions, not many would be taking on new ones with just an hour or two left, and over the weekend to boot. Hence for a flat day, this was significant for a stock to be holding near its highs on a Friday afternoon. Tick.

The price range and volume was pretty solid. I expect this kind of volume build up as a second gear move, watch for third and fourth gears shifts.Tick.

Do I know of anything happening with UEM Land, no ... this is actually good as that meant corporate developments not out yet. It does not matter what it is for a trade (I know that sounds irresponsible but I am laying out guidelines for a pure trade not on fundamentals). Tick.

I of course asked for more info, no more info was forthcoming as it was hush hush. Granted, no need to push anymore. Its better I do not know anything. Went long for a trade.

Now, let's see if this trade works out on Monday and Tuesday ... lol....

NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.


kl said...

UEM Land, MRCB move almost in tandem ; one ahead, then the other. This time UEM Land, but thanks, I'll stay out. Not much upside left in my view and there's many other less risky trading stocks with 10% upside to look at. Good luck, anyway.

CK said...

dali what happened to uemland? i bought in 50 lots at 2.02 after your posting. can you advise pls?thanks