Olam & Golden Agri
Today is not a day for commodity stocks players! Both Olam & Golden Agri ( FirstRes too ) were beaten up badly. They were warded in the ICU and subsequently being sent to the hospice. I am not trying to be humorous but other than self-amused, what else can I do? Net profit rose by 56% but share price plunged by 6.5%!? Personally, I have pretty high exposure on this counter.
Gaining early entry in anticipation of a flag pattern formation can result in such a situation. That's why the book always advocate 30% of probe during the formation. A bull flag formation comes with a bearish channel. If the channel is not bearish, it would not call 'bull flag'. Now, 'bearish' channel will always associate with the risk on whether it will be bearish all the way or will it reverse at some point to complete the bull flag.
I only have Olam but not GoldenAgri. I did not cut loss although 1.75 was triggered. I use my discretion based on other factors such as the counter is severely oversold. Despite the flag pattern formation has been destroyed, as long as prices are within the 20MA & 40MA. This actually fit the Swing Trade setup. In other word, if I did not look at this counter from the 'flag pattern' standpoint. I will still get in at this point prompted by Swing Trade buy signal.
I only have Olam but not GoldenAgri. I did not cut loss although 1.75 was triggered. I use my discretion based on other factors such as the counter is severely oversold. Despite the flag pattern formation has been destroyed, as long as prices are within the 20MA & 40MA. This actually fit the Swing Trade setup. In other word, if I did not look at this counter from the 'flag pattern' standpoint. I will still get in at this point prompted by Swing Trade buy signal.
Labels: Trading Digest
posted by Market Wizards @ May 15, 2009
Comments: 9
