Teo Seng rallied together with the bull market in the first quarter of 2019, it gained from RM0.712 to RM1.287 (80%). On 21st Feb, the down candle with huge volume was a strong message to chartist that possible supply at the price of RM1.26. The stock consolidated for 8 days and it started to drop on 6th March. First upthrust on 15th March confirmed the supply and the stock dropped further to RM1.03.
On 19 April, the stock gained slowly with little volume and it continued until 9th May at point A. Point A is an upthrust with highest volume since Teo Seng was listed and it implied the composite man was distributing. The green candle on 15th May at point B with volume similar to point A indicated effort with little result. It was not a trade as some traders might thought the high volume and green candle is a good time to buy. Unfortunately, it doesn’t apply for this case.
The red candle on 16th May confirmed the distribution and the climatic sell commenced together with the mini bear market. The stock rallied again in July and it dropped before touching RM1.28 resistance. The drawback for this stock is that I do not see any spring at RM1.03 support. Point C indicated the stock is weak and it might be the right shoulder at the top. Although the fundamental shows Teo Seng is making profit, I won’t enter this trade after analysing the chart. The chart doesn’t demonstrates a possible trading opportunity. Charting is the X-ray for a stock, trading without it is like a doctor conducts medical diagnosis without X-ray. (Click here for full picture)