Fibonacci Retracement Analysis

Fibonacci Retracement is a TA strategy that is applied to Bollinger Band breakouts.  Bollinger Band breakouts normally happens after a period of consolidation.  The main purpose a Technical Analyst uses Bollinger Band breakouts as an indicator is to trace speculative movement of a stock. Such stock appears on Technical Analyst's screen such as NextView online real time platform that provides a filtered list of stocks that closed above the Bollinger Band.

With IGB having first BB breakout on 4th of Jan, the closing prices of latest 3 trading days are calculated to determine the Buy In price on next trading day, 5th Jan.  Fibonacci Retracement is measured by using the latest 3 days closing price as 0-100% reference, with the latest one closed above BB upper limit.  This phenomenon is called a BB breakout.

Fibonacci Retracement analysis suggests that 61.8%, 50% & 38.2% levels of the latest 3 days closing price  will act as 3 strong supports for a uptrend stock for the next trading day. Therefore the Buy in price for the  following day should be placed at 61.8% i.e.Rm2.136 or higher, while the Cut loss price should be at 38.2% i.e. RM2.114 or higher for a TA investor.

The Selling price depends on TA investor's view on the current trend and stock profile.  For this study case, we find that for the next 2 following days, the stock still breaks the Bollinger Band with huge volumes.  Therefore the Technical analysts can upgrade their TP to a very high level.

IGB & KFC Review - FEB 2011

Ichimoku Kinko Hyo Analysis

1.  IGB - UPTREND.  Stock price has been floating and dancing above the cloud for months.  IKH analysis suggests that, the thicker cloud formed at beginning of March, will act as a bigger support and push the price higher.  Strong supporting price by March is RM2.22.

2. KFCH - MIDTREND.  Stock price entered the clouds second half of Dec 2010 and fell below the cloud early Jan 2011 since then.   RM3.86 acts as a strong resistance when Tenka Sen (Conversion line) leads Jikun Sen (Base line) with small margin.

IGB hit all time high with near 200k unit volume.

IGB hits all time high.  Next target is to close at RM2.50.  Corporate exercise may be around the corner.  Still waiting for medias for confirmation.  Tomorrow still got plenty of space to fly!!!

Bollinger Band with RSI value Analaysis

The chart indicates that, still got plenty of room to fly tomorrow.  With RSI value around 55%.  Overall fund manager would prefer to short sell a stock after reaching 75% - Overbought state.

Buying volume consolidated for the second day, and today closing reflects yesterday correction.  Closing price finally breaks the BB.

Tomorrow we should see closing price break record high.  RM2.50 is a very nice figure for everyone.

MACD Signal Analysis
1.  Only yesterday, chart analyst can see the GO Long or Buying signal when the MACD blue line and the MACD signal red line cross each other.

2.  With MACD blue line continues to move on top of MACD signal red line, the stock price is growing. The reverse of lines position means stock price is falling.  The more space that blue line leads the red means bigger growth.

3.  GO Short or Selling signal will appear again when both lines cross each other again.  Like in Jan 20.  This can be noticed few days earlier, when blue line is starting to fall near to the red line.

4.  Best thing is, use RSI to help you along the way.  RSI > 75% simply means Overbought.  Best time to sell for big profit!!

IGB breaks the Bolinger Band Upper Limit!!

All fund managers can see IGB closing price breaks the upper limit of Bolinger Band today.   Tomorrow is a panic buying day when their analysis published to their clients.

Meaning Domino just started...  Good time to buy for a TA analyst.

IGB Review - Feb 2011

TA analysis for IGB
1. Stock price moves within 20d Bolinger lower band.
2. RSI touching 30% and it is good time to purchase to fund managers.
3. Buying momentum is recovering.
4. Huge buying volume is coming.
5. If previous buyers all return for the counter, the stock price can break Bollinger Band Upper Limit @RM2.32.