Once again, in the SMMG Club, another student of mine made me proud by punting the correct stock yesterday which brokeout furiously today. This time round it was Mewah, a third legged penny stock. From what they were discussing, it seemed like the catalyst for this rushed up in price was due to some rumors that the company is planning to be delisted from SGX.
When she posted yesterday, again, after a quick scanned on the chart, I gave my "endorsement" seal that it was not bad of a move because yesterday there were some buying activity. Moreover looking at the minute chart, Mewah was in accumulation mode which contributed to the warming up of a turbine engine. At around 2pm+ earlier today, the stock just suddenly went into an explosion mode where there was an insider buying up to 10 million shares which gave public more confidence to load up more shares. The churning of volume from the explosion mode then turned into a hysteria and frenzy mode where the stock hit a high of 0.58 before some profit taking took place which cooled off the exuberance buying mode which then converted into reactionary mode. Moral of story, if you want to chase price, chase at the start of the engine, never be the laggards.
TIMING, TIMING and still TIMING. Nothing beats precision TIMING. Always buy 1-2 days ahead so that your funds are not tied up. When everyone starts buying, that's where you start reaping profits bits by bits. Never try to save 1-2 pip in the stock market because that will cost you opportunity. The goal is to buy ahead of the pack and unload when the rest are buying furiously.
Ronald K - Market Psychologist - The Big Speculator