Technically speaking and market observation:The rationale of investing in KPS(5843)

Thursday, March 22, 2012

Technically speaking and market observation:The rationale of investing in KPS(5843)

Date of writing:March 22, 2012, 5:51pm.

Investing in KPS(5843) at 1.09  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. 1.09 is regarded as the support level for KPS


Normally, when the price reached this low level, it will just rebound and will hit the target of 1.16 or higher. This is a water stock and there is a cyclical play for this kind of stock.

Let us look at the cycle of KPS(5843) in the near past:

1. On Jan 5, 2012, the low of this stock was 0.885, and later it rebound to the high of 1.23  on Jan 9, 2012, holding period lasted for 3 trading days. If you were to buy 10,000 shares, you can make 3294.76. Your return on investment is 37.23%.

2. On Jan 19, 2012, the low of this stock was 1.02, and later it rebound to the high of 1.24 on Jan 30, 2012, holding period lasted for 6 trading  days before coming downward. If you can catch the low and sell at the high,  you can make 2033.62 by buying 10,000 units of the stock.  You ROI is 19.94 %

3. On Feb 8, 2012, the low of the stock is 1.12 and later it rebound to the high of 1.43 on Feb 9, 2012, holding for 2 days. If you were to buy 10,000, you can make 2912.35  Your ROI is 26%.

4. On Feb 28, 2012, the low of the stock is 1.06, and later it rebound to the high of 1.22 on Mar 5, 2012, holding for 5 trading days. If you were to buy 10,000 shares, you can make 1432.36. You ROI is 11.74%

 

5. On Mar 15, 2012, the low of this stock was recorded at 1.07, and later it went up to the high of 1.16 on Mar 19,2012, holding period lasted for 3 trading days. If you can catch the low and the high, you can make 736.51.

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 KPS(5843) for 10,000 shares if you buy at 1.09 :

Sell price 1.11 Profit 38.40 ROI 0.35%
Sell price 1.12 Profit 137.71 ROI 1.26%
Sell price 1.13 Profit 237.14 ROI 2.18%
Sell pricie 1.14 Profit 336.51 ROI 3.09%
Sell price 1.15 Profit 435.88 ROI 4.00%
Sell price 1.16 Profit 535.25 ROI 4.91%
Sell price 1.17 Profit 634.62 ROI 5.82%
Sell price 1.18 Profit 733.99 ROI 6.73%
Sell price 1.19 Profit 833.36 ROI 7.65%
Sell price 1.20 Profit 931.73 ROI 8.55%
Sell price 1.21 Profit 1031.10 ROI 9.46%
Sell price 1.22 Profit 1130.47 ROI 10.37%

Sell price 1.23 Profit 1229.84 ROI 11.28%
Sell price 1.24 Profit 1329.21 ROI 12.19%
Sell price 1.25 Profit 1428.58 ROI 13.11%
Sell price 1.30 Profit 1924.43 ROI 17.66%
Sell price 1.40 Profit 2917.13 ROI 26.76%
Sell price 1.43 Profit 3215.24 ROI 29.50%

1.09, 1.10, and  1.11 are good prices. Market is unpredictable. Buying at the support level, we should be quite safe. If history will repeat itself, we can trade at this tight range and make money