Ekovest shows increasing revenue and profit, did I make a mistake?

My friend, CK had been arguing with me the upside potential of Ekovest in April 2019. He claimed Bandar Malaysia Project was the reason to buy this stock. Even though the company had issued the statement that they are not involved in the project, he still insisted the price will move up. He was confident with the detailed information he had studied on the internet.

After my post on 26th May, he disagrees with what I wrote in the post and he said the price will bounce after the shakeout. Fortunately for him, the stock bounced at RM0.705 and he was delighted. He even claimed my technical analysis was wrong. On 11th June, I warned him that the stock did not rally with high volume and it could be a distribution day. TA traders will avoid this type of candle because the upthrust characteristic. Initially, CK has no problem with this upthrust candle, but he started to worry on the following upthrust candle with higher volume on 19th June.

He sold all his holdings on the next days and accepted some losses. The stock plummeted -7.09% on 8th July, CK thanked me and admitted he had to pay the lesson fee for overconfident. I think his price was RM0.90, about -7% losses. The bounce saved him from making more losses. Since then, we continue to monitor the price action. The stock started to show weakness in September and it fell to RM0.72. Here, the stock bounced up and traded above RM0.73 for two months.

Although Ekovest reported increased revenue and profit in November, the supplies filled up the demands and the stock traded below RM0.85. The lack of demands initiated the stock to fall -8.96% and found support at RM0.764. On 3rd December, the green candle with high volumes indicated strong demands rushed in to buy this stock. I reckon it is too early to decide the direction of this stock, however, seven months of consolidation has prompted me to reconsider this stock might be under accumulation phase. You can see the stock refused to fall below RM0.70 and the support lines are getting higher. Maybe I was wrong in the first place and CK was right. The only problem was he entered at the wrong time.

Author: Gerald Koh