Trading Ideas. Lionind. 123 bottom anticipation.

Watch Lionind for 123 bottom reversal. Resistance at 0.84

At this point of time one can only anticipate the 123 bottom as it needs to break above the 0.84 resistance to confirm. By the way, today's daily candle is a bullish engulfing candle. Interesting.

Depending on one's trading style, there are 2 possible trading scenarios.
1. 0.69 - 0.84 range trade
2. 0.84 break out trade

As usual don't forget your stop loss (...as the pattern may fail plus the overall trend is still bearish)

See More Do More. Bursa Trade Securities

An interesting change is about to take place in the Malaysian securities market. On 01/12/2008, Bursa will be running a new trading platform called Bursa Trade Securities.

More transparency? Less market manipuation? Only time will tell.

"See More Do More...Bursa Trade" that is the new marketing tag line for Bursa Trade. To "see more" go to www.bursatrade.com/

Anyway here's the Bursa Malaysia Press release (with highlights added) :

BURSA TRADE SECURITIES TO OFFER MORE TRADING OPPORTUNITIES FOR INVESTORS.

Bursa Malaysia’s new trading platform enables greater accessibility, efficiency and transparency.

Bursa Malaysia today announced the introduction of Bursa Trade Securities, a new trading platform for the securities market, which is targeted to be operational on 1 December 2008. The launch of this trading platform marks the completion of the exchange’s integrated trading system that will provide greater accessibility for both local and international investors, as well as enhance trading efficiency and transparency in the market

The launch of the new system on 1 December 2008 is subject to a successful Pre-Live implementation test with market participants scheduled for 29 November 2008.

The first phase of Bursa Trade was implemented in 2006 for the derivatives market. Bursa Trade, powered by NYSE Euronext Advanced Trading Solutions, underlines Bursa Malaysia’s commitment to enhance and upgrade its infrastructure and technology as part of its ongoing efforts to achieve an efficient marketplace.

Bursa Malaysia Berhad’s Chief Executive Officer, Dato’ Yusli Mohamed Yusoff said, “Global exchanges are leveraging heavily on technology to offer greater speed, access and control in trading. As our marketplace progresses in tandem with global market demands, this system’s new and improved features will allow market users and investors access to more trading opportunities.”

Some of the key features of Bursa Trade Securities are as follows:

Theoretical Opening Price (TOP)

Investors will be able to have ‘viewing ability’ of the theoretical opening prices for each stock under the pre-opening phase from 8:30am until the market opens for trading at 9am, as well as in the second session. The pre-opening price process enables real-time calculation of stock prices for first matching at opening phase. This allows investors to gauge market sentiment and prices better as the pre-opening period is made transparent. This is particularly useful for new listings.

Theoretical Closing Price (TCP)

This transparency of trading extends to the moment the market is about to end for both the first and second trading sessions. The theoretical closing price feature promotes natural discovery of closing prices for each session.

Trading At Last (TAL)

The last 10 minutes of each session will provide traders with the opportunity to close their positions. Matching will take place at a fixed price which will be either the last done price or the theoretical closing price.

Continuous trading

Bursa Trade Securities enables real-time and continuous matching of orders compared to 10 seconds matching under the current system. This makes the online trading experience faster and much more responsive.

Five best price limits

Investors would find this feature beneficial as it provides them with a clearer picture of market depth. The five-best price limits give investors more control of their trading decisions as opposed to the three-best price limits that is offered by the current system.

Odd Lots Settlement

Investors will now be able to do partial matching for odd lots which makes it more marketable. Odd lots can be partially matched based on price time priority.

Final Settlement Price for FKLI and OKLI

The implementation of Bursa Trade Securities will also have an impact on the derivatives market. There will be a change in the calculation of the Final Settlement Price (FSP) methodology for the derivatives products carrying the Kuala Lumpur Composite Index (KLCI) as the underlying instrument. The products affected will be the KLCI futures (FKLI) and the KLCI options (OKLI). This new methodology makes it less susceptible to market manipulation and smoothens out price volatility.

“Bursa Trade Securities is a scalable platform which can support future initiatives and innovative products such as multi- currency products. The introduction of Bursa Trade Securities will also enable the implementation of Direct Market Access (DMA) for equities which should be operational next year,” Dato’ Yusli added.

Dato’ Yusli also emphasised the exchange’s commitment to responsibly managing the implementation of this new trading system. Bursa Malaysia had carried out numerous user acceptance tests of Bursa Trade Securities with market participants since the beginning of this year in order to ensure that they were familiar with the new features.

He added, “As with any new technology and system implementation, there are inherent risks involved. We have put in place measures to ensure a seamless conversion to the new trading platform and to minimise any trading disruptions.

“Nevertheless, if an unexpected disruption should occur, as is the case under the current system, there are two possible resumption scenarios. If a major disruption occurs before the start of the trading day, Bursa Malaysia will be able to resume trading within the same day. If a major disruption occurs during the trading day, trading is expected to resume the next business day,” he concluded.

........................................

Side Comments : Perhaps Bursa should also implement shorter trading hours in this bearish trend. Shorter quality trading hours would be a more cost effective option.

News. Chinese Domestic Demand For Steel Down.

Extracted from SteelGuru:

Chinese domestic demand for steel down

China Knowledge cited Mr Xu Lejiang president of Baosteel Group as saying that China's demand in steel products for the past several months this year has dropped sharply fuelled by mainland economic slowdown and squeezed export.

Mr Xu during an industrial meeting said that China's steel output is expected to decrease to 480 million tonnes this year because of the weakening demand in the domestic market and the declining prices of steel products that has forced steelmakers to cut their output.

He said that mergers & acquisition are the strategic option for the industry, which will enhance the bargaining power of domestic iron and steel enterprises in both the upstream and downstream sectors.

Eye Kandy (Not)

Do u know the house owner/tenant? :)

Music. Carla Bruni. No Promises

A couple of months ago I asked a mate of mine if he has heard of Carla Bruni. He said that he recalled her “as some sort of a hot model”. Well, Carla was one of the most sought after and also possibly one of the most controversial model around. I shall not go into why she is controversial as it would digress from the essence of this write-up. For a lady who will turn 40 this December, she still has the looks and appeal (debatable).

Carla can sing and she does it well. Her 2nd album No Promises is an impressive follow up to her debut Quelqu'un m'a dit, released 5 years ago. On No Promises Carla demonstrates that she has poetic intellect imbued in her blood. Comprising 11 songs, this album is literate in nature as the songs are adaptations of poems by WB Yeats, Christina Rossetti, Walter de la Mare and Emily Dickinson amongst others.

On No Promises, Carla worked with Louis Bertignac and the result was an intimate sound with smoky tones at the right places. Her folk inclination and Bertignac’s blues influence is potent.

Those Dancing Days Are Gone opens the album with a funky blues number interspersed with the occasional harmonica. And when she goes into her breathy whispery singing mode, it exudes a classy gritty feel.

She later gets dreamy and “waltzy” on Before The World Was Made and also on Autumn. On If You Were Coming In The Fall the pace quickens with some rock elements in it.

At Last The Secret Is Out is an apt closure. Not so much for the lyrics as most of the time I just don’t dig deep into them. To me the title of the song has symbolic significance as we know now and can affirm that her talent lies beyond the catwalk and print-ads. She has evolved well indeed to a singer/songwriter to be reckoned with. There is also a certain emotional conviction in the way she sings her songs. And yes, her pronounced accent was all over with no attempt made to mask them. In fact, I like it like that as it imbues the songs with a certain warm tinge.

This album is musical poetry for repeated listening to soothe the frayed soul. Intoxicating at times. Best listened when the lights are dimmed. Glass of red wine in hand - optional.

Oh, ya...she is also known as Mrs. Sarkozy now.

Bullish Reversal Patterns.

In a bearish trend, like the one that we are going through now, it is common for traders and investors to try to bottom fish. This is a highly difficult task. It is also common knowledge that many who attempt to do so, end up catching falling knives instead of a cushy bottom when they don't manage their risk and exit well. Being able to identify the possible reversal points can provide insight to the possible entry points and for risk management in the event the anticipated reversal fails.

Reversal patterns generally indicate the possibility of the end of a current bearish trend/phase. What follows thereafter is the probability of an opposite movement. These are some of the common patterns we can look out for (thanks to tradingprice patterns):

1. Double bottom (or W)
A double bottom occurs within the context of an existing bearish trend. It starts when a stock reaches a low from which it sharply rebounds. The stock then hits a high from which it rolls over. The stock then falls back down to the previous low and rebounds for a second time, forming two equal lows. These lows are connected to form a horizontal support level. The resistance level is defined by the high formed after the initial rebound.

Double bottoms occur frequently within the context of bearish trends; therefore, it’s important to wait for confirmation before acting on a double bottom. Like 123 bottoms (see below) , double bottoms are ubiquitous. Many will form but ultimately fail over the course of a bearish trend. Anticipating confirmation is possible, but doing so requires acute risk management.
Double bottoms can form over very short periods and long periods of time.

A double bottom is confirmed once a stock breaks above the horizontal resistance level. Entry points can be taken upon the breakout or after waiting for a retest of previous resistance and then buying on the bounce. A double bottom is rejected once a stock breaks down below horizontal support.

2. Triple bottom
A triple bottom occurs within the context of an existing bearish trend. It starts when a stock reaches a low from which it sharply rebounds. The stock then hits a high from which it rolls over. The stock falls back down to the previous low and rebounds for a second time, forming two equal lows. The stock then rebounds to its recent highs and rolls over once more. The pattern concludes after the stock falls to its lows and stops going down for a third time. These three lows are connected to form a horizontal support level. The resistance level is defined by the two highs formed after the rebound attempts.

Triple bottoms occur less frequently than double bottoms. But when triple bottoms do form, they provide very precise entry points and risk management levels. Triple bottoms can form over very short and long periods of time.

Triple bottoms can go on and become quadruple bottoms if the same horizontal support level is retested. The patterns can continue indefinitely, but the more often a support level is tested the weaker it becomes. Keep as much in mind when trading triple bottoms that don’t immediately reverse higher.

A triple bottom is confirmed once the stock breaks above the horizontal resistance level. Entry points can be taken upon the breakout or after waiting for a retest or previous resistance and then buying on the bounce. A triple bottom is rejected if the stock falls below horizontal support.
















3. 123 bottom
The 123 bottom is the most common bullish reversal pattern. The requirements for the 123 bottom are rather common, causing the pattern to frequently appear in existing bearish trends. Many 123 bottoms reach the first two conditions, but never confirm. The 123 bottom, therefore, can be somewhat deceiving. That’s why it’s imperative that the pattern confirms before placing trades.

The 123 bottom starts when a stock sharply reverses higher after an extended bearish trend. This sharp rebound is the first requirement of the pattern, or part 1. The second requirement is for the stock to halt its rally attempt at short-term resistance, which is part 2 of the pattern. Part 3 of the pattern forms when the stock stages another sharp rebound, but from a relatively higher level than in part 1. The 123 bottom confirms when the stock breaks above short-term resistance as defined in part 2.

A basic definition of a bearish trend is lower lows. A basic definition of a bullish trend is higher lows. The 123 bottom seeks to identify when a pattern of lower lows ends and a new pattern of higher lows begins.

Another way to think of a 123 bottom is as a very short-term cup and handle, only the 123 bottom occurs at the end of a bearish trend.

The 123 bottom occurs in most bearish trends, but it rarely confirms. When it does confirm, it’s best to take a very short-term approach to trading the 123 bottom. Taking profits quickly is generally a good idea after entering a 123 bottom.

A 123 bottom is confirmed once the stock breaks above the horizontal resistance level as defined in part 2 of the definition. An entry can be taken as soon as the stock crosses its short-term resistance. This resistance will often act as support in the days following a breakout.

A 123 bottom is rejected if the stock fails to break above resistance or falls below the relative low traced in part 3. A drop below the relative low in part 3 reveals a very short-term pattern of lower lows, which is a bearish indication.
















Note : it would be prudent to observe that your usual indicators also support the reversal patterns.

(the charts featured above were extracted from stockcharts and thereafter marked upon to illustrate the reversal patterns)