RAPID - What's the high probability play here now?

Publish date: Tue, 21 May 2024, 11:05 PM

RAPID hit the news in a big way in January, when its stock plunged from a peak of nearly RM30 down to a low of 65.5 sen, effectively wiping out 98% of equity from the peak.

Traders who are reading this article is probably wondering if there's an opportunity to make monies of the high price volatility or not.

Here's my take on this stock:

  1. I previously blogged on this stock here on 26 Jan 2024.
  2. Then, I got itchy and took a long position at an average entry price of RM1.63.
  3. Yesterday when it closed at 0.71, my position was under water by 56%!
  4. This stock simply has no fundamentals.
  5. At the time, I recognized that any purchase was pure gambling.
  6. As such, I advocated that if you must gamble to scratch the itch, then, treat this like going to Genting to gamble, i.e. set a budget (ideally a small one, like when you go to Genting), throw the dice, and the forget about it.
  7. And one day, say 1 or 2 years later, you may sell it, hopefully at a profit.
  8. The objective is to scratch that itch, and if it didn't pan out, at least, your portfolio is not hurt, and you positioned the portfolio to continue to hit new all time highs, which as you know, my portfolio continued to hit new all time highs numerous times since then, despite owning RAPID!

So, what am I doing writing about this in just 4 months time?

  1. Well, today, RAPID went up by 21.83%!
  2. KLCI dipped 5.41 points (-0.33%).
  3. Due to RAPID and 14 other green stocks offsetting 24 red stocks, ironically, my portfolio hit new all time high again today!!! (no thanks to RAPID but other stocks).
  4. The point is when RAPID speculation is small, you can still make monies!
  5. But RAPID's 21.83% is by far the highest % gain, and so it caught my attention.

So, is there a high probability play here?  As traders, we turn to the charts for guidance to explore.  My gambling approach for the RM1.63 lot still applies, but the question is - could there be another high probability play here?  What does the tarot cards and tea leaves say?

Since end Jan:

  • RAPID's rapid fall may have settled.
  • There is the first bottom at 0.655 in March and April.
  • In May, RAPID printed a slightly higher bottom at 0.675.
  • All these provide the appearance that the bottom may have been in.
  • The past 4 days, price rose gradually and today, explosive growth!
  • Price appears to be bounded by the box shown where top line is around 94 sen, bottom line is a zone between 65.5 sen to 67.5 sen.

So, I have a small position at RM1.63.  As price is near the top of the box zone, should I sell, and then, wait for price to fall back to the bottom?

Frankly, I'm not interested.

I have a thesis that was based on what I wrote at 26 Jan.  It's only been 4 months.  Normally, if this is a "goreng" stock, for it to rise in a major way, it needs to stay sideways for a longer period - the longer it stays sideways, it suggests that accumulation is happening.  Hence, not interested to do anything.   

The way I look at it, nothing's changed for me.

  1. I'm still largely a long term dividend investor.
  2. My "Genting" gamble on RAPID is still in its early stages - I gave myself a much longer time-frame to win i.e. 1, 2, or 5 years time.
  3. Goreng operators hate traders like me because my patience is over a much longer period than they can "accumulate" or "goreng".
  4. Goreng operators hate traders like me because no matter how much monies they spent to goreng the stock, they'll never get another sen from me on this stock. :-)
  5. This is because my only goal is to position my portfolio to make new all time highs again!

Thankful my portfolio DID make new all time high again today!

Thank-you Mr Market!

Disclaimer:  As usual, you are fully responsible for your trading and investing decisions.

PS.  What if price fell back down to the buying zone?  Would I average down?  Let's see.  Whilst my profits have multiplied since Jan, I don't feel like going to Genting to gamble again so soon.  But if price did make a new low next year, I may reconsider as my Genting gambling trips are typically once a year only, to scratch the itch and to have a losing position to remind me not to gamble.  RAPID has been a wonderful reminder to me not to gamble because of its "rapid" loss!  Thank-you Mr Market for the reminder lesson!

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