Retrace kicks in after a rebound in KLCI as we have mentioned in our previous posting. Again it is testing the so-called “psychological” level of 1,400. Psychological level is where the market thinks that if it is broken, the price will go down or up further. However we don’t believe in the psychological level that much. 

Our principle & view towards the stock price movement is affected by the big boys. They will not sell just because of the psychological level, their selling would have started way before the psychological level, they won’t care about what level it is. Only retail investors will react on the psychological level, which is often too late. 

We understand there are many retail investors who are worried about the market condition & the analysis most retail investors are not able to tell whether the market is going to rebound but rather guessing. That’s why we often worry about something that we don’t know. 

As always, we will apply our own analysis to track the intention of the KLSE big boys to understand whether they will continue to press the market lower or going to support the price after the retrace. If this is the first time you read about our post, you may understand more about our operator analysis at the link below :

https://roundnsurge.com/news/what-is-operator-market-maker-big-boys

Strong bear or bull ready for a charge?

If we are looking at the daily stock price movement it will be quite worrying with the price down. But when we analyse these losers’ price & volume flow in detail, we will find some of the losers in KLCI showing signs of demand flow in to support the price at the low.

Stock A

Stock B

Stock C

The major volumes created on the same day are mainly from the price at the bottom. It is not so much of selling volume during the price drop. This can be a good sign that the big boys are supporting the stock price at the low. 

However, this is just an indication of pause or slow down in price fall. When will the big boys come back to markup the price we will need to monitor again. The intention to markup & support are different. 

Stock A - 5 mins chart

Stock B - 5 mins chart

Stock C - 5 mins chart

Investors should take note that these big boys have huge funds to hold. If they find that is not the right timing to markup, they will wait & even let the price fall lower. Therefore, what we are having in the market is showing signs of pause in price only. 

We mentioned in our previous post, a price retrace is a good point for us to monitor whether it is good for us to time our entry for mid to long term investment. When the price starts to markup with high volume again after the retracement shows that the big boys are in & ready to markup high in mid term. 

https://klse.i3investor.com/web/blog/detail/rns810/2022-10-05-story-h1650055933-Is_Recession_Here_or_is_the_market_bottom_Let_s_see_how_the_Price_Volum

The above only apply to bigger cap stocks, because the big boys' operation methods are different compared to mid to small cap stocks. Usually mid & small cap stocks mainly operate in mid term, which means you will see price up & down within a year, forming a price movement like a mountain in the chart. These kinds of stocks are not suitable for long term investment even though they are paying good dividends. 

Small boys price action in the top active list

Those stocks have performed really well in the past few months is where we need to be a bit worried about it. Some of them are showing signs of holding lesser shares in hand & are going to distribute the remaining shares in hand, press the price down slowly & not trigger panic selling to the retail investors. Continue to give hope to the retail investors by marking prices up now-&-then to attract more investors to buy their shares or average down. 

Retail investors will always put high hopes on the losing stocks in their portfolio. Because it is too painful to cut losses, we will feel much better to keep hoping the price will go up higher. Not knowing the big boys are selling their remaining shares down.

Another reason why we hold on to losses & hope for rebound is because we don’t know the stock price will go down or the big boys are getting out of that stock. That’s why we are here to share our analysis to understand better about the big boys. You may follow the link below to understand more about our Operator Analysis if you are interested in improving your trading.  

Knowing the upcoming price movement can help us to avoid unnecessary losses & take profit before the price falls. Some stocks in the KLSE are showing signs of continuation of price fall with selling pressure & no demand coming in to support the price to form the bottom. Follow the link below to learn about selecting stocks from the Top Active List in KLSE : https://www.roundnsurge.com/news/how-to-select-klse-stocks-from-top-active-list

Stock D - 5 mins chart

Stock E - 5 mins chart

Like the 5 mins chart above, the main volume created during the day is from price down & price moves lower along the day without forming a bottom with high volume. Stocks with price movement like the above will usually go down further. 

Some are showing signs of price peak, which the big boys have no intention to mark higher. They are starting to distribute the remaining shares. 

Conclusion

Overall market is not that bad, but we need to know which one to avoid & which stock will have a rebound in KLSE to avoid getting trapped in the bear trend. It seems SOME of the KLCI component stocks will find their bottom next week, which means the KLCI will be having a roller coaster movement in the coming week. 

Small & mid cap stocks mainly are more bearish in our point of view, but there are some stocks showing signs of accumulation & are ready to mark it up higher. 

Knowing how to find an accumulation stock is every investor's goal in the stock market. The current analysis available in the market is not sufficient enough for us to identify the big boys' actions. We need an analysis that is more “solid” to tell us what is going to happen next, rather than waiting to take profit or cut losses. 

Join our upcoming webinar at the link below to improve your analysis in the KLSE by knowing the big boys accumulation pattern & criterias to find one. 

Date : 

19TH OCT 2022 | 8:30PM | WED

Registration link : https://attendee.gotowebinar.com/register/1581645703697849355

Easy way to learn how big boys accumulate shares: https://bit.ly/3AOhUz1

Website: www.roundnsurge.com

Facebook: www.facebook.com/roundnsurgeofficial

Youtube: www.youtube.com/c/RoundSurgeoperatoranalysis

Instagram: @roundnsurge

About Us

Malaysia's 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.

Trading Account Opening

They are offering an Intraday trade brokerage rate at 0.05% or RM8 whichever is higher for day trading stocks RM 50,000 & above-transacted volume (buy sell the same stocks on the same day). Buy & hold at 0.08%or RM8 whichever is higher.

Open a cash account now at the link below:

https://registration.mplusonline.com/#/?drCode=R311

As Kelvin’s trading client, you will be exclusively invited to join Kelvin’s weekly webinar and telegram group. Click here to join.

For more inquiries contact him by email: kelvinyap.remisier@gmail.com or 019-5567829

If we have missed out on any important information, feel free to let us know and feel free to share this information but it will be much appreciated if you can put us as the reference for our effort and respect, thank you in advance!

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 their own trading decision. The author of this blog is not liable for any losses incurred from any investment or trading.