Tuesday, March 31, 2009

I don't feel good that I have liquidated my Sino-Ocean Land

I have liquidated my Sino-Ocean Land @ HKD 4.91, way ahead of my plan, for a mere gain of $400. Why?

Yesterday, stock market took a turn for the worse (with HKSE down 600+ ,STI down 70+ points), I really have a feeling that a major correction coming, and I would have another opportunity to buy lower. (I am getting jittery about the rally, as stock indices had already increased by 20%). Furthermore, I spotted 2 bearish engulfings and 1 shooting star on Sino's chart.

Should I still have stayed? The plan states so. The trend is up. So, why am I running scared? I hate it when I don't trade according to plan. It is going to be a missed opportunity if the counter runs up. I think the reason, why I got scared so easily on this trade, is because privately, I am afraid that I am longing in a still-bearish environment. From the start, I was not comfortable to take on early leaders. I am thinking like the scared analysts out there. A recent report from KE Live stated:
"Nevertheless, the bigger question on everyone’s lips is: Will history repeat itself? For now, we continue to view the two-week run as a bear rally. Going by past downtrends, the final bear market rallies tend to be sharp and short-lived. For instance, during the Asian Financial Crisis, the STI reached a low of 1040 in Jan 1998 before rebounding 49% to a high of 1553 in Mar 1998. But this did not end the downtrend and within 6 months, the STI retreated below the previous low and ended the down cycle at 808 – a 48% drop from the high of 1553.
On average, post Great Depression bear cycles have typically last about 23 months. We believe the STI has yet to find its bottom, which is likely located below the prior low of 1455. Meantime, the market is in heavily overbought territory and a short term correction appears imminent. But expect the STI to have intermittent bounces as it heads lower. At this juncture, we would advise traders to close off all long positions and wait for the market to pull back before re-opening any fresh positions."

So, really, I am mentally not prepared to follow through with this kind of trade (although this counter is really strong). What a pity. However, I will still be monitoring, and will try to institute a new position if this counter undergoes a correction (it has since shot up again to HKD5.10). But, for now, not going back to this stock, even if it shoots through the sky (until I sort myself out), cos inside me, I am still torn between being a bear (to short S&P) and a bull (to long China). This is the worst kind of feeling that a trader can have.

However, most important lesson I must learn from all these, is have a plan that I stick to. Otherwise, no point making plans.

No comments: