Technically speaking and market observation:The rationale of investing in Liondiv(2887)

Date of writing:March 20, 2012, 2:32pm.

 Investing in Liondiv(2887) at 0.35 is considered at the safe level. Buying stock, price is important, if you get in at the wrong price, it is difficult to get out.


Normally, when the price reached 0.35, it will just rebound and will hit the target of 0.415.  But, of course, there are always exception, if the players prefer to stay out for the moment, this stock will be in the consolidating stage for awhile.

Let us look at the cycle of Liondiv in the near past:

1. Oct 4, 2011, the low of this stock is 0.30, and later it rebound to the high of 0.405 on Oct 17, 2011, holding for 13 days.  If you were to buy 50,000, you can make 4990.93. Your return on investment is 33.27%.

2. Nov 24, 2011, the low of this stock is 0.325, and later it rebound to the high of 0.40 on Dec 7, 2011, holding for 13 days before coming downward. If you were to buy 50,000 shares, you can make 3483.63 on theory provided you can catch the low and the high.  You ROI is 21.46%

3. Dec 28, 2011, the low of the stock is 0.34, and later it rebound to the high of 0.415 on Jan 13, 2012, holding for 16 days.  If you were to buy 50,000, you can make 3473.18.  Your ROI is 20.43%.

4. Feb 3, 2012, the low of the stock is 0.38, and later it rebound to the high of 0.415 on Feb 10, 2012, holding for 7 days.  If you were to buy 50,000 shares, you can make 1458.58.  You ROI is 7.68%

If you check the FD rate, the interest ranges from 3.15 to 3.88%.  For 6 month FD rate, it is 3.15 to 3.22 and some bank granted 3.88% during promotional period. Even with 7.68% is better than the FD rate.

Your profit possibilities for Liondiv(2887) for 50,000 shares if you buy at 0.35 :

Sell price 0.36 Profit 239.35 ROI 1.37%
Sell price 0.365 Profit 487.78 ROI 2.79%
Sell price 0.37 Profit 736.20 ROI 4.42%
Sell pricie 0.375 Profit 984.63 ROI 5.63%
Sell price 0.38 Profit 1232.05 ROI 7.04% 
Sell price 0.385 Profit 1480.48 ROI 8.46%
Sell price 0.39 Profit 1728.90 ROI 9.88%
Sell price 0.395 Profit 1977.33 ROI 11.30%
Sell price 0.40 Profit 2224.75 ROI 12.71%
Sell price 0.405 Profit 2473.18 ROI 14.13%
Sell price 0.41 Profit 2721.60 ROI 15,55%
Sell price 0.415 Profit 2970.03 ROI 16.97%

0.35 and 0.355 is a good price.  Market is unpredictable. If we are buying from the stock operators and if they knew that is our game, they might just sell down before pushing up. If history will repeat itself, we can trade at this tight range.