Monday, October 15, 2012

JCY: My Trading Diary

Well, I have been following JCY forum @ i3investor.com for the past 5 weeks and seeing people are still interested to enter or holding on to this counter. At that time I did mention it will have more downside pressure when the price are hanging around 0.98/0.99 level and weeks later JCY take a dive! As per last Friday, it hit low of 0.68! Why I am interested? It happen that I am also investor for this counter (short-term) few months back. :-)  So I decided to do some write up on how I get involved and adding some JCY story and explanation from the chart as below.




So, what make this JCY so special? I think most of you guys will know, right? Thailand flood causing its competitors factory shutdown and lucky that JCY factory was not impacted. Is this true? I not sure as I read from the news. The news flow in Nov to early Jan (if I not mistaken) and analyst from various brokers firm start to recommend JCY, news are out and prospect of this company are on high note and the radar is ON for most of us here. Some of the headline I still remember was HDD shortage and to meet this demand, more orders are coming in for JCY from Western Digital and Seagate to supply HDD components, this will be the opportunities for JCY to outshine its competitors, new production to support new orders, etc. All this news will create more attention for us and it will play a musical song in our mind (trust me), yes this will be good place to invest, yes this will be good prospect, yes operation increase, yes more orders, yes financially sound better revenue and profits, I am not spared as well. Does this mean I get 'Influence'?

Now, to my side. I started to check on the chart, and to my interest it really attract me to join the boat. So I start to do some study from the chart and at the end I have set two profit target at 1.38 and 1.90 for my short-term investment. I started to monitor the trend and daily price activities and waiting for a breakout. Well, finally it breakout on mid Dec while I was on holiday trip to Singapore! Without hesitate I enter buy 0.75 (No.1) from my mobile and the orders matched. Now, that day really keep me uneasy, I was afraid the price might go down or is it a false break out? But I told my self it will go up and I trust my research! Am I 'Suspicious' about my own research and analysis? So on that day it close new high with volumes. What a relieve and I enjoy my holiday for rest of the week. :-)  

The smooth up riding now is with me for a month plus until it reach its peak at 1.50 on early Feb and it start profit taking. Actually, I did not exit at that time. My 'Greed' was whispering that the target will hit 1.90. What else influence my decision? Before the peak there is news saying that its competitors factory in Thailand still not in full operational and may drag it till mid of the year and JCY might get new contract from Seagate and this will be lucrative long-term revenue and profit for the company, right? So my decision struggling is about this news and my analysis on exit and price target. At the end I did not successfully exit (No.2) and as a result I was pinch and get squeeze on my profit when the price fall to the level of 1.0x. Again, I am saying to myself, this is not the sell price yet base from my analysis. I confidently hold and believe it will rebound once the supporting trend was hit. Its sound like 'Hope'? On mid March, I got excited as the chart give me a reversal signal and the price start moving up slowly. This time I change my target price to 1.60 (No.3) . Why? This price will be a strong resistance level base on the trend line I draw (from No.1 to No.3). Most of the time this trend will be the hard resistance and the price will not go far beyond this point. At the end of Apr I totally exit from JCY at 1.60. The 1.90 target will be my history!

Another thing I wanted to highlight beside a poor financial result publish on May that cause the share price consolidate, between Jun to Aug, there was new news and familiar news coming out which is repeating to the news that came out early of the year. One example is the possible major contract from Seagate for JCY. For new news it was mention about the operation recovery of its competitors, JCY will face challenging environment to maintain its HDD supply and it will lose to its competitors, etc (hope my memory still can remember correctly). The chart show how the price react between this period (more volatility seen and the trading band is formed - day trader would be interested to trade in this type of trend). Does this trend show those big guys are disposing the shares slowly? Mmmm...you guess. There might be late entrant as well during this period with long term investment in their mind hoping for more upside in coming years. This is what happen to me when I was newbie to the market. :-)

Now back to the chart on how to identified market top and the rest of exit point. I have put up another 3 exit point - the 2nd exit point is when the trend breakdown from 1.60 on early Jul. There is sign of double top created early Aug and the most clear sign of overall upside price failure is at 3rd exit point when it form a head and shoulder top reversal. This pattern tell you that the uptrend has ended and long downtrend going to start. 4th exit point will be the final and a confirmation of downtrend process. Some traders or investors will be starting to pay attention during the downtrend with the aim to get cheaper price for a rebound or long term investment. From the chart there is many low level going low again. Those who are buying during this period either turn out to incur loss or still holding the shares reluctant to sell out. In the end the price drift more lower and they couldn't even sell out! This kind of downtrend will also attract me to enter for purpose of wining quick profit, but sometimes you will not as lucky as you think it is. Take example of myself about the INGENCO sell down, I was planning to punt and earn quick bucks by making an entry (catching the falling knives), but turn out I lost the game!

What will be next for JCY? Since 0.72/0.73 show support failure - not even make it to hold for a few days and the price shoot below this level and close 0.685 (Fri). With this new low, I expect more downward pressure seen and base from the downside triangle breakdown (from the chart) the price will be steep fall towards 0.50 soon and than slowly drag towards 0.40 before any rebound seen (should be not that strong). From the chart I foresee JCY will not go above 0.70 for a long period of times if its going to hit 0.4x/0.5x. Unless there is another creation of miracle happen! Hope I am right.

Hmmm...Seem like I have been telling a long story. To summary, we as normal human being constantly fighting between emotions - suspicious, hope, influence, fears and greed (for my case here). Emotions is the culprit and it is hard to get rid off in the market. Another important key point would be a regular review of your trading game is needed and be flexible to change overtime base on the current market situation. Stock market can either be your friend or foe depend solely on how well you execute your trading strategy. In the end, stock market still is a very interesting place to earn money for all of us. Cheers!

Good luck and all the best!

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