Background

This is a quick lunch update.  My previous update at 2PM 30 July here.  At the time, CEB closed lunch time at 67 sen.  I suggested to wait till end of the day and see how it closed.

CEB remained hot stock even today.

Updated Chart

As I pen this, I suspect we will soon have confirmation of "capitulation".   If you wonder what it means, google and you may find this definition:

What does it mean in more practical terms?  Yesterday's massive 1 day green volume really stood out and typically, it means someone (big) has stepped in the ring, to gobble up a lot of these shares (and more) as it became available yesterday.    The longer tail candle yesterday is also clear that this positive buyers has turned out to be the winner.  As I pen this at lunch time, it remains to be seen if the buying momentum can continue, to close above yesterday's high of 48 sen.  If so, then, this 48 sen could act as support going forward.  If not, it will become the new resistance.

How to Trade Capitulation?

Honestly, trading for each trade is never guaranteed, certain nor reliable - there will always be uncertainty that can never be eliminated.   In hindsight, it always look easy.  

Anyway, here's my thought process then - After seeing that big red candle printed 2 days ago, a part of me is wondering if we have seen capitulation. The reason is 2 fold - it had highest red volume relative to the past, the volume bar was big relative to before, and the length of that candle was very long relative to before.  So, the hypothesis was formed.  My gut feel (instant decisions) was 50/50 chance whether it was going to go up, or go down, and I will never know the outcome.  

But fundamentally, I also noted a few key metrics.  E.g. NAPS was 47 sen and price is well below that.  DPS was 2.21 sen and at around these prices, the DY was > 5% which is attractive (even though no long history i.e. not sure if reliable in future or not).  But it looked cheap to many fundamental investors particularly to the people who originally bought during IPO of 90 sen and subsequently topped up at RM1.07.  

So, all these are standard, instant thinking.  I believe many traders are seeing what I see.

So, instantly, I decided to split the buy in 2 bullets.  Orders entered before market opened yesterday.

Bullet #1 @ 40 sen.  Why?  Because the low of the day was 40 sen + close at 40.5 sen i.e. not much buying power but in case it goes up, I figured I had majority chance of being filled at 40 sen, so that was the first bullet before market open yesterday.

Bullet #2 @ 36 sen.  Why?  Because if it wasn't a reversal, then, odds are good that that downtrend momentum continues to break below 37 sen support, hence, 36 sen.

After entering the Buy orders yesterday, and other Buy Orders for other stocks, I closed the App and walked away completely from markets before 9AM, to go to work.  

So busy at work, I only manage to check the prices after I got home.  Discovered both orders executed!  Yey!  I also did bottom fish a couple of small positions at logical places and was filled.

Next Thoughts

I try not to overthink.  The instant see is 3 typical resistance from Fibonacci swing and 3 other potential resistance.  Resistance doesn't mean it is a hard ceiling.  Just something to note as it can also act as a magnet.  We know the stock is fundamentally very cheap.

Some simple key levels

1. 48 sen - can it close higher?  If so:
   
2. 54.5 sen - can it break?  If so:
3. 60.5 sen - can it touch here?  If so:
4. 64.5 sen - can it reach here?  If so:
5. 68.5-69.5 sen - can it break this twin resistance?  If so:
6. 76.5 sen - this one, is the typical 61.8% Fibonacci Resistance of the swing and given the downtrend channel, will be stronger than normal resistance.  So, I expect many traders will definitely sell below this level and lock in profits.  I will likely follow i.e majority of my holdings should be sold by then (I suspect, but let's see).

So many resistance so many uncertainties, but all very standard so far.

Summary and Conclusion

For a trade (instead of investing) position, my position size is the largest.  Of course, still small relative to my top investing positions like MAYBANK, PBBANK, RHBBANK, etc., but it is now larger than some of my smallest investing positions.  So, this is semi-investing and semi-trading.  If the fundamentals worked out, the dividend yield is really interesting at 5%-6% and could be a semi-investment.

The stock has fundamentals which apparently for its sector is considered cheap (I'm always skeptical here but market is the final arbiter of prices).   But there will always be a trading portion besides a core portion.  Meaning I will still have something above 76.5 sen.

Markets can always do anything, so, always be humble and always respect markets.  Even though I'm safe now, however, anything can happen, and we are never "safe" with market exposures, until we close the trade and turn that into cash.  The best thing is ignore Mr Market, set your sell target prices,  walk away, do the things you like doing like career, work, family, hobbies, read, write, etc. and don't think about the outcome of this trade at all.  Above all, no need to monitor the markets!

Good luck!

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