To excel in the stock market, have a different point of view from the crowd.
The majority of the investors will be based on the gainers in the top active list for their trades. However, these stocks listed in the top active list are often at the stage of the big boys' distribution. That’s why it is easy to get trapped at a high price when investors buy stocks based on the top active list.
It doesn’t mean that we can’t look into it, sometimes there are some “jewel” stocks that show up in the top active list. Especially those rebound stocks that can allow you to make a short-term profit.
We will share with you the common price & volume pattern that appears before the stock is going for a rebound.
Don’t just read the daily chart, the stories are hidden behind the daily chart.
Every art piece has a story hidden behind the picture. It is the same when we are analysing the big boy’s intention. They draw the chart & it is our job to decode it.
Often we learned how to read charts from technical analysis. But the traditional technical analysis is not sufficient for us to understand the big boys' intentions very well. That’s why many investors are feeling lost when applying technical analysis. Because it doesn’t tell us what is the NEXT step, but rather tells us what is happening NOW based on the average of the price & volume.
To decode the intention of the big boys, we can’t just look into the daily chart. We need to go into further detail in the 5 mins chart to understand the direction of the volume.
If we are just looking at the daily chart, a long red candlestick with a high volume we will think is strong selling pressure. It is a bad sign for many traders.
But when you look into details of the volume flow in the 5 mins chart, you will find the majority of the volumes are created near the day low.
If selling pressure is strong, why high volume at the price low but the price never goes down lower?
What does high volume with price stay the same?
This is one of the basic lows of price & volume in the stock market:
- High volume, price down = selling pressure
- High volume, price up = buying pressure
- High Volume at a low price, the price stays = demand coming in
- High Volume at a high price, the price stays = supply coming in
Everyone knows this very well but doesn’t understand it thoroughly. Often it is not told or trained to apply it properly. The traditional analysis we learned from the internet or the training courses often looks into daily charts in KLSE. Because KLSE is not as liquid as other stock markets such as NASDAQ, NYSE, or Hang Seng. The candlestick in the 5 mins chart is not complete, it is often having a dash or small price up. Therefore we are often being taught to look into daily charts only when investing in KLSE because you can’t plot the resistance & support line easily & no candlestick pattern is formed.
Many investors didn’t look into the price & volume movement, which is the first-hand data & most direct data to tell us the direction of the stock price.
By just mastering the price & volume, your trading/ investment returns can be at least 2x better than using traditional technical analysis.
For example, most investors will stay away from the stock below. Because the stock price is down with high volume in the daily chart, it is bearish to them.
When you look into the 5 mins chart, you can see the price has no heavy volume when it is going down. However, the high volume only comes in when the price hits the bottom & the price didn’t go down further with the high volume. Instead, the stock price starts to move sideways.
This is indicating to us that the demand is coming into this stock. Supporting the stock price from further price down then it moves sideways.
Can you see it much more clearly when you analyse stock prices this way compared to not knowing which one is the true support/ resistance line or indicators?
Time Your Trade Entry
Demand coming in to prevent the price from going down further is not an entry signal to us. It is just telling us that the big boys find this is the right point to put a pause or soften the stock price from falling sharply.
Usually, the big boys stop selling because there aren't enough buyers at a lower price. If they force to sell the shares out with no buyers queuing at the lower price, the stock price will fall sharply. This will lead to panic selling from those investors who have bought earlier & losing potential investors confident who haven’t invested in.
Therefore, they will need to pause the selling & attract more investors to buy with a price markup. They might not mark up the price the next day after they support the price, sometimes they will need to wait 1 or 2 days before the price markup.
One of the reasons is they take advantage of their T+3 before force selling happens. So they need to shift their shares to other accounts to avoid forced selling. But not necessary 3 days after they support the price.
Before they are ready to markup the price, you can see the price & volume in the 5 mins chart with high volume when the price is up, instead of high volume when the price is down. The high volume may not be very high, as long as 1 of the high volume in the day.
Then the big boys will be ready to mark up the price to attract more buyers to come in.
Knowing this will be a powerful analytic tool when you understand the big boy's intention. You can break the big boy's intention into different stages. Making every price & volume movement much clearer to avoid making emotional entries.
You can find these rebound stocks easily from the losers in the top active list easily when you know how to analyse the price & volume with the understanding of how the big boys operate in the KLSE market.
Join our upcoming webinar :
Catch the knife that lands on the floor, not the falling knife! Learn how to find the price bottom & rebound with price & volume analysis that you can't find anywhere else.
Date :
SUN NOV 6th 7:30PM
MON NOV 7th 8:30PM
WED NOV 9th 8:30PM
Registration Link: https://attendee.gotowebinar.com/rt/6858059069588080398
Easy way to learn how big boys accumulate shares: https://bit.ly/3AOhUz1
Website: www.roundnsurge.com
Facebook: www.facebook.com/roundnsurgeofficial
Youtube: www.youtube.com/c/RoundSurgeoperatoranalysis
Instagram: @roundnsurge
About Us
Malaysia's stock market is a unique market; hence it requires a customized trading approach to tackle & swerve. Many existing traders in Malaysia apply a plug-and-play strategy from the overseas stock market, but it is not necessarily the best strategy to trade in KLSE. This is due to the difference in local and overseas stock market regulation and the size of market participants of institutional funds & retail investors.
“True traders react to the market.” is the backbone of our trading method. Our findings and strategies are developed through years of trading experience and observance of the operating style in Malaysia’s stock market.
Trading Account Opening
They are offering an Intraday trade brokerage rate at 0.05% or RM8 whichever is higher for day trading stocks RM 50,000 & above-transacted volume (buy sell the same stocks on the same day). Buy & hold at 0.08%or RM8 whichever is higher.
Open a cash account now at the link below:
https://registration.mplusonline.com/#/?drCode=R311
As Kelvin’s trading client, you will be exclusively invited to join Kelvin’s weekly webinar and telegram group. Click here to join.
For more inquiries contact him by email: kelvinyap.remisier@gmail.com or 019-5567829
If we have missed out on any important information, feel free to let us know and feel free to share this information but it will be much appreciated if you can put us as the reference for our effort and respect, thank you in advance!
This blog is for sharing our point of view about the market movement and stocks only. The opinions and information herein are based on available data believed to be reliable and shall not be construed as an offer, invitation or solicitation to buy or sell any securities. Round & Surge and/or its associated persons do not warrant, represent, and/or guarantee the accuracy of any opinions and information herein in any manner whatsoever. No reliance upon any parts thereof by anyone shall give rise to any claim whatsoever against Round & Surge. It is not advice or recommendation to buy or sell any financial instrument. Viewers and readers are responsible for your own trading decision. The author of this blog is not liable for any losses incurred from any investment or trading.
