It's national day today and I just finished my weekend study on Kimly and Koufu and why one rose while the other just collapsed for a year plus and never recovered. Both are doing similar business but they yield different results. The chart has all the necessary answers and it can only be attributed to how many retailers were caught on the first day of breakout. I am not a news person nor TA guy but I prefer to study emotions in stocks and in the market.
Kimly had a super heavy sell down on the first day and subsequently in recovered in a fast steep speed where soon the stock did not see more daylight and crumbled. It looked as though the buyers had unloaded near the peak and let the stock became a low hanging fruit without supporting much. The volume decreased and there wasn't much activities after that. Today Kimly just released a set of bad earnings which put the stock more pressure without any buying interests.
https://www.theedgesingapore.com/kimly-reports-48-dip-3q-earnings-5-mil
On the other hand, Koufu's chart painted a different story. The stock did not experienced heavy swings while it only suffered dip for the first 2 days. It then turned ws and trended higher with steady buyers without much dramatic movements. That's what one should look for when longing a stock. The buyers were slow and gradual and while this stock is still new and no one knows how much upside it can go, it's best to wait to see how much sellers emerge first during a down market and decide if the stock suffered heavy selling/little selling.
I had been using these analysis for many years and it served me so far so good although at times I would need to cut some small losses. Will continue to monitor trends on both stocks and see how it pans out. Come for my talk next Tuesday, I will share more on how to spot those buyers/sellers using simple charting that is readily free on the internet. Register using the below button.
Ronald K - Market Psychologist - A Stock Market Opportunist
