Analyzing Stocks Using JStock’s Alert Indicator

As I was mentioning in my earlier post, JStock has the pre-built indicators. When in JStock, click on the tab, ‘Stock Indicator Editor’ then click on the button, ‘Install’ (in the Database panel found to the right of the screen).

You’d be prompted with an Indicator Install Wizard. Choose the default and click on next.You’ll be given the choices of 8 indicators.

Click on any one of them and the screen on the right hand side of the window will display some short description about the indicator.

Below are the indicators and their short descriptions. And ran against the stock, GAMUDA (as of 28th Dec 2010)

Indicator: Moving Average Convergence Divergence (MACD)
Usage: Detect DOWN TREND signal
Homepage: http://jstock.sourceforge.net/ma_indicator.html
 
MACD = EMA[12] of price - EMA[26] of price where: EMA[12] = 12 days exponential moving average, EMA[24] = 24 days exponential moving average.
 
When MACD is negative, the stock is moving in downward trend.

Indicator: Moving Average Convergence Divergence (MACD)
Usage: Detect UP TREND signal
Homepage: http://jstock.sourceforge.net/ma_indicator.html
 
MACD = EMA[12] of price - EMA[26] of price where: EMA[12] = 12 days exponential moving average, EMA[24] = 24 days exponential moving average.
 
When MACD is positive, the stock is moving in upward trend.

Indicator: Money Flow Index (MFI)
Usage: Detect DOWN TREND signal
Homepage: http://jstock.sourceforge.net/mfi_indicator.html
 
MFI = 100 - 100 / (1 + Money Ratio)
 
If the MFI approaches 30, the price is moving, with little interest in that trade, and it will most likely fail.

Indicator: Money Flow Index (MFI)
Usage: Detect UP TREND signal
Homepage: http://jstock.sourceforge.net/mfi_indicator.html
 
MFI = 100 - 100 / (1 + Money Ratio)
 
If the MFI approaches 70, the price is moving, with a lot of interest in that trade, and it will most likely continue in the future.

Indicator: Relative Strength Index (RSI)
Usage: Detect SELL signal
Author: Yan Cheng Cheok
Homepage: http://jstock.sourceforge.net/rsi_indicator.html
 
RSI = 100 - [100/(1 + RS)] where: RS = (Avg. of n-day up closes)/(Avg. of n-day down closes), n= days (most analysts use 9 - 15 day RSI)
 
The RSI ranges from 0 to 100. A stock is considered overbought around the 70 level and you should consider selling. This number is not written in stone, in a bull market some believe that 80 is a better level to indicate an overbought stock since stocks often trade at higher valuations during bull markets.

Indicator: Relative Strength Index (RSI)
Usage: Detect BUY signal
Author: Yan Cheng Cheok
Homepage: http://jstock.sourceforge.net/rsi_indicator.html
 
RSI = 100 - [100/(1 + RS)] where: RS = (Avg. of n-day up closes)/(Avg. of n-day down closes), n= days (most analysts use 9 - 15 day RSI)
 
The RSI ranges from 0 to 100. If the RSI approaches 30 a stock is considered oversold and you should consider buying. Again, make the adjustment to 20 in a bear market.

Indicator: Commodity Channel Index (CCI)
Usage: Detect SELL signal
Author: Yan Cheng Cheok
Homepage: http://jstock.sourceforge.net/cci_indicator.html
 
CCI = (Typical Price - SMATP) / (0.015 x Mean Deviation)
Typical Price (TP) = (H+L+C)/3 where H = high, L = low, and C = close.
SMATP = Simple Moving Average of the Typical Price.
Mean Deviation = First, calculate the absolute value of the difference between the last period's SMATP and the typical price for each of the past 20 periods. Add all of these absolute values together and divide by 20 to find the Mean Deviation.
 
CCI can be used to identify overbought levels. A security would be deemed overbought when it exceeds +100. From overbought levels, a sell signal might be given when the CCI moved back below +100.

Indicator: Commodity Channel Index (CCI)
Usage: Detect BUY signal
Author: Yan Cheng Cheok
Homepage: http://jstock.sourceforge.net/cci_indicator.html
 
CCI = (Typical Price - SMATP) / (0.015 x Mean Deviation)
Typical Price (TP) = (H+L+C)/3 where H = high, L = low, and C = close.
SMATP = Simple Moving Average of the Typical Price.
Mean Deviation = First, calculate the absolute value of the difference between the last period's SMATP and the typical price for each of the past 20 periods. Add all of these absolute values together and divide by 20 to find the Mean Deviation.
 
CCI can be used to identify oversold levels. A security would be deemed oversold when the CCI dips below -100. From oversold levels, a buy signal might be given when the CCI moves back above -100.

I will do another one later with another different stock e.g. TimeCom. So, with all this indicators to Gamuda, do you think it is a good stock to keep or to sell?

Tools Of The Trade (Part 1)

Having signed up for a CIMB iTrade account, we have begun familiarizing ourselves with the tool. But along the way we found a couple of other interesting tools in the business. Let me just share some of them here that we are familiar with.

CIMB iTrade (http://www.itradecimb.com.my/)

There are many companies that offers online trading services. Usually there will charges but some don’t. Purchasing your shares via this method would have lesser brokerage fee as oppose to the conventional way of liaising with a remisier.

We’ve signed up with CIMB iTrades. You should look out for others. As for us, due to our limited time back in Malaysia, we had little choice but to stick with them.

Trading with CIMB iTrade, provides 3 basic tools – normal stock trading (click Trading Hall, see pic below)/ cross border trading / IPO purchases.

CIMB iTrade trading hall (from now on referred to as iTrade), is a Java applet which can be run in any browser (IE or FF).

You could simply head down to any CIMB Securities office to sign up for an account. Its FREE.

To learn how to use the tool, when you are logged in, click on ‘Demo’ (see pic below). This will prompt a pop up window which will provide you a short tutorial on the essential features provided by the applet.

JStock (http://jstock.sourceforge.net/)

It’s a free open source tool that was developed by a Malaysian programmer.

It essentially provides the functionality to watch stocks, build ones portfolio, create alerts, chat with other like minded traders, etc.

I’ve just downloaded this tool a day ago and have begun using it. I find the Portfolio management feature more useful than that was provided by iTrades.

Another feature which I just started playing with is its stock indicator.

You could go to its site to learn more about these features. But I like to show what the stock indicator has in store. I’ve install the pre-built indicators like MACD Up and Down trend signal.

and have tested its simulation against a share that I have set my eye on of late, e.g. Aeon Credit (AEONCR).

The simulation with ‘MACD Up Trend Signal’ indicator tells me whether this stock is experiencing a standard MACD uptrend or not. In this case, it isn’t.

(to be continued…)

The Road Ahead

Every journey begins with a single step. Ours unfortunately took a while. We remember how we use to connect with unit trust agents back home in Malaysia to discuss on our financial and investment plans. With their advice, we begin to create our investment portfolio. But then as it turns out, we lack the financial commitment to maintain our investments and often at times we led to the need to take the money out simply because we needed have cash on hand. Although this didn’t happen to all of our investments, we believe we could have avoided losing potential earnings had we not been put in that position.

Well the past is the past, moving ahead, we’ve seen many changes in our lives and one that has been fortunate enough have given us the opportunity to build up our investments. It begin with our parents as our proxies as we did not have any CDS account. With our recent visit back home, we changed that and decided to open up the account and sign up for CIMB iTrade. So our journey begins…..

Inception

2010 marks the end of the first 2 years of our journey to Canada. We have been blessed with this opportunity to experience living abroad. Though it may not be a bed of roses, we like to think of this experience as a retreat - a very long one indeed. 

With 2011 nearing, we thought we'd put a theme to it too. For what it is worth, I believe that 2011 should take on the role of realizing one's full potentials. Now, if you were asking what was the theme for the last 2 years, I would say that 2010 was the year of rekindling the past and building new relationships and 2009 was the year of forbearance and true grit spirit. 

"Realizing one's full POTENTIALS" -> This theme sums up our sentiment at this point of time. One that is of seeking greener pastures and reaching out to build new talents. This blog serves as a platform for us to share our new found talent - TRADING. 

Bedtime traders is a place where we would like to give our thoughts and experience in embarking into the world of investments. Right now, we are targeting KLSE which we are more familiar with. But as time passes, we do not rule out the possibility of venturing into other markets. Why "Bedtime"? Besides the branding (as we have also called ourselves the bedtime bakers), we thought it was apt as the time when KLSE is most active is the time we need to go to bed. So here we are pyjama clad and peering into the monitor screen as we sift through the green and red realtime texts. Till then....