Background:
Bursa Malaysia (Bursa) is an exchange holding company approved under Section 15 of the Capital Markets and Services Act 2007. It operates a fully-integrated exchange, offering the complete range of exchange-related services including trading, clearing, settlement and depository services. The wholly-owned subsidiaries of Bursa Malaysia own and operate the various businesses.
Fundamental:
First, it is a monopoly-type of business. Bursa is an easy-to-understand business, it will make more money when exchange-related activities is high. Hence, I would say that Bursa is a good stock for contrarians who buy stock when nobody else wants to buy and sell the stock when everyone else is fighting for it. When the stock market is hot, Bursa doesn't need to spend much on advertisement and promotion but the business turnover will certainly increase. Bursa also doesn't have to increase its workforce too much when the business turnover is increasing. More business but workforce is almost the same. Good business model.
Techical:
I bought 3000 shares of Bursa on 6 Feb 2009 when it was trading at RM5.00. It was near it support level of around RM4.96 and near the bottom of its 3-years price range . Doji appeared on 5 Feb 2009 after coming down from RM5.95 on 7 Jan 2009. From ADX, i noticed that the downward momentum had decreased. RSI and stochastic were in oversold regions. I did not wait till MACD to give me the buy signal as i expected Bursa to move sideway for a while before rebounding higher.
It was disappointing to know that Bursa dropped to RM4.36 after US Dow Jones broke and fall below its 21 Nov 2008 support level of 7449. Dow Jones broke the support 20 Feb 2009 and triggered another massive sell down to reach 6626 on 6 Mar 2009. KLCI also dropped to 847 poitns.
I sold 1000 shares of Bursa at RM5.20 on 1 Apr 2009 after Bursa rebounded 20% from RM4.36 to RM5.20. I was a bit emotionally exhausted after seeing Bursa dropped to RM4.36, so I thought I should took some of the profit out of the trade. RSI and stochastic were in overbought region. MACD was still indicating buy signal but i was not confident that Bursa could keep its upward momentum after rebounding so much. I expected Bursa to trade sideway.
Yes, i was wrong. Bursa continued its bullish momentum. I sold another 2000 shares of Bursa at RM6.20 on 27 Apr 2009. On 27 Apr 2009, KLCI opened in red. Investors and traders were very concern of the outbreak of swine flu in Mexico which already killed more than 100 people. I was thinking that this could be the catalyst to break the bullish momentum and for the traders to take the profit out of the table.
I was glad i made this decision, Bursa closed at RM6 on 27 Apr 2009 and dropped another 15sen to RM5.85 the following day on 28 Apr 2009.
At the same time, i was also very disappointed that I did not close most of my long positions when i was thinking the bullish momentum would be broken. As a result, my portfolio value decreased by more than RM10,000 on 27 Apr 2009. This is really a good experience for newbie like me.
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