Potential Entry After A Shakeout – Chemical Company of Malaysia (2879.KL)
Stocks dump traders all the time with bad news. Most of the traders will turn their attention elsewhere once they been hit by stop loss. However there some good reasons to keep an eye on the stock that bumped you if you have performed the chart analysis correctly.
If the market remains in a confirmed mark-up stage or stage 2, just keep it on your watch list. Take note on hidden potential buying such as Spring during the shake out. The shake out usually will confirm with upbar or 18 Line Change signal.
Based on Chemical Company of Malaysia daily chart above, we notice there is a shake out with Spring bar on 11 October 2018 and followed by Test bar. Price subsequently close up higher with upbar. This is the confirmation of the supply or weak-hand holders have been removed from the market during the Spring bar (shake out).
However, based on the chart, we notice there is a sign of weakness (Up-Thrust) at resistance level. Smart money tends to re-test at resistance to check if the supply has completely removed during the shake out before continue on the mark-up stage.