Knowing which sector is going to rally next is important for trader & investor to sail into the wind. It will definitely make your investment journey much easier. But most of the retail investors are late to react to this information and often miss out on the opportunity when they notice it in the news.
Information is everywhere in the market, whether you know how to interpret it or not. We are going to share with you how we see the next sector rally before the price or news reports about it, with price & volume data available to everyone.
After going through most of the stocks in the market, we find there are stocks in the semiconductor related sector showing volume and price sustaining with demand for shares going in at the bottom price. This shows that there are some big boys possible like institutional investors are looking into these sectors & expecting higher price movement in the next few months of sector play.
Whether it is a direct or indirect relationship with the semiconductor industry, these stocks are showing the same price & volume action at the bottom. However, currently it is still at the accumulation stage, it doesn’t show any sign that they are ready or no confirmation of mark up price yet. The current price might move a bit more sideways or lower before the mark up sign shows up.
That’s why it is risky to look at it right now since it merely shows signs of accumulation at a certain price bottom. The price can go further down before they move the price higher, therefore, wait for the ready signal from the big boys and it will show in the chart when they are ready. No point in suffering sleepless nights worrying about your portfolio by looking at it right now.
Let’s take a look at the price & volume action from our findings in a few semiconductor stocks in the Malaysia stock market below.
We won’t be covering fundamental parts in our findings below, you may look through the news and the financial reports on the internet to find out more.*
Stocks selected have low net short selling in % to avoid volumes were built from short sell cover.
Our Analysis : We analyse the price & volume action every time when the stock price forms a new low. A pause in a stock price falling with high volume indicates there is some demand coming into the stock preventing it to go lower. This is the law of price & volume in the stock market. Looking into the daily chart will not be sufficient to find out the bottom, because the volume can be created by selling pressure. Therefore, we need to analyse the details such as the 5 mins chart too.
Take note, high demand at the price bottom doesn’t mean the price will move higher too. Some occasions might be director share buyback. The intention of the Directors to buy back the company shares might just want to increase their shareholding only. Therefore, no price up potential in the short to mid term.
The parties that will cause the price to move higher will be the big boys like institutional investors or funds. Because their investment objective is to make profit in the mid term to long term. With the demand they created, it could cause the price to move higher with the limited supply of shares. Therefore, they are the big boys we want to follow in the stock market.
The reason why we mentioned the semiconductor sector could have another round of rally is because we see the same price & volume pattern happening in most of the semiconductors stocks. With demand coming in at the bottom with high volume indicates the big boys are going through an accumulation stage in this period.
However, accumulation doesn’t mean the rally will start in a short period of time. Usually it will take a few months of a cool down period & wait for the big boys to mark up the price when it is ready. As an investor, we don’t want to get trapped in a long accumulation period with the possibility of the price going down further or cancellation of operation by the big boys.
We explained the details of our findings & the price & volume action will show up when the big boys are ready to mark up the price in our live stream on 27th March 2022, Sunday, 8:30pm on Facebook or YouTube.
Click on the link below to watch our recordings from our livestream :
Facebook : https://fb.watch/c14N8ptyqQ/
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Malaysia 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.
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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.