For a market-maker or stock operator, managing the second-wave of a
bullish cycle has always been the toughest part of the business. Firstly, you got to flush out most of the stale-bulls. In the case of
VIOVCOM, there is a mixture of the tired bulls. Some are sitting on massive
profits and have no confidence that prices would advance and have taken the
opportunity to sell in waves each time the stock attempted any mild rally.
Some are truly exhausted-bulls who have lost their marbles due to the
prolonged sideways trading conditions and are keen to get out with minimum
losses.
This has been a proven fact. Each time prices rallied over the last
9-months, sellers came out in many waves to realize their profits or reduce
their positions by cutting loss. The situation facing this stock-operator presently is just like monkeys
playing up on a coconut tree. If you can shake the tree hard and long enough
they would fall and would not be there to bother you get up that tree!
It was obvious that the prolonged 9-weeks price congestion at 0.27 to
0.30 sen has enabled much long-liquidation profit-taking selling as 1.89
billion shares changed hands over this period. The vital question now is how much free-float or not friendly shares
still out there? A large number would mean that the narrow-band price
congestion would be extended untill a larger portion of these shares are un winded.
There are two sides to a coin. It is all about market psychology. Some
viewed the stock’s inability to advance as price resistance. Others viewed it
as a price support level and hold and accumulate further. I think it is a
support level.
Strictly from a quantitative analysis point of view, the congestion
period is viewed as a consolidation and accumulation phase. The smart-money is
on the long-side and had built up a strong volume base in anticipation of the
next-move or second-wave, which is up.
What does the congestion period means?
Price break-out after an extended
price congestion signals a cycle-change or change in the trend. VIVOCOM price congestion has
lasted 9-weeks. The period of the time-frame break-out is crucial. Price break-out after a
short price consolidation time-frame is not significant.
Break-out after a prolonged
price consolidation time-frame as in the case of VIVOCOM is very significant. Break-out of all 9-week tops
is more significant than a break-out of all tops for the last three weeks. Watch for the upward price
break-out for VIVOCOM.
Volume would surge and that would confirm the start of
the 2nd wave of the bullish cycle. Deng Shou Peng once said:
White cat or black cat? The colour of the cat is irrelevant as long as it
catches mice!
What should Vivocom traders be
looking for?
Success in stock market is
not so much a matter of knowledge and analysis as it is a function of
consciousness, of being able to let go and
flow with the
continually-changing way it is. Let us look at the reality.
Any serious trader or
investor of VIVOCOM should not be influenced by what happened in the last
rally. That was a completely different technical game and it is now over.
Vivocom is in a new trading
phase. Traders should re-focus their focus. They should look at what transpired
over the last nine weeks and look seriously at the volume and the implications
of the tight-price actions.
They have to consider who actually
absorbed, like a sponge, the 1.89 billion shares that were ditched out and start
to understand what it means by “smart-money” or “people with deep pockets”.
Investors must understand that for every share sold there is a buyer. With a proper understanding,
they will then know that the setting for the next bullish-wave is been
established!
VIVOCOM Price Trend- What’s
Next?
People make markets and they are irrational much of the time. Markets
are not random – because they are based on human behaviour, and human behaviour
especially mass-behaviour or Madness of Crowds, is not random. It never has been. It probably never will be!
How long would
the price congestion last? That is a few- million- dollar question! I honestly
do not know. Only the market-makers know. What I really know is that the start
of the next big upward move in VIVOCOM would catch many by surprise! When
traders least expected it to happen, it happens! This I guarantee!
My Monkey
Crystal Ball Calls:
1st
upside objective: 0.335
2nd
price-target : 0.40
3rd
price-target: 0.475
CONCLUSION: If the Sun rises from the West, I would certainly dare to
call a sell on VIVOCOM. But, the Sun does not!
Happy and Prosperous CNY. G.M.Teoh
Note:
G.M.Teoh is an independent market analyst who has successfully defied the conventional wisdom of trading.
His analytical research work on stock market were published by Star Publications weekly under the column name “The Stock Market Signals” from 1986 to 2009. He is currently the chief coach of the Master Trader Tutorial (MTT) conducted in Singapore, Malaysia and Indonesia.