Coming into the month of May, we believe that it is best to be liquidating positions putting expectation on a market correction which happens at a high rate in May. Hence the old saying “sell in May and go away” comes in. If you’ve been following our posts often, you could see that over the last week, we’re worried about the month of May. Looking at market conditions this time around, it is likely that market would sell-off once again.

We have liquidated our positions and held on to these three counters just by referring to technical analysis. Not a big fan of technical analysis but at times, it comes really handy for doubtful positions which are already in the green.

Start with BJAUTO, referring to the basic moving averages for 10, 20, 50, 100 and 250. The stock is currently trading above all its averages. That is a good sign that it would move with the likelihood of moving up higher than down due to the support levels created by the moving averages.

Furthermore, we’ve realized that EPF is buying it every day which in fact our research shows that this stock is filled with proper fundamentals to back it up in case the trading position goes wrong. We decide to stay long on this and would in fact buy more if it reaches RM1.90 shoulder support.

CANONE made a major rally coming back to the RM4.00s range after the major blog by Mr. Koon. Although technical analysis showed that we should get out at around RM4.50, we’ve decided to hold on. The reason being its uptrend pattern from the lows of RM3.40. With RSI coming back to the 50% line, expect to see the stock continue rising challenging its previous high. We believe the current trading band is a correction from exhausted from its previous rally.

FFHB, a high growth company to be with its Starbucks contracts. Similar to BJAUTO, we see that it is on a good uptrend having higher lows and moving averages acting as support for the stock. The triangle breakout pattern is forming and we believe that when market gets a little stronger, the triangle would break out creating a rally for the stock.

To be honest, we have yet to close these 3 positions as the market corrects around 4% from the top, the price for these 3 counters stayed put. In return, we believe that when the strength in the broad market returns, these stock would outperform.

That’s all for now…

Stay safe in May! Yes we are really scared…

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