Another buy & hold casualty

Public Bank and Public Bank foriegn have been strongly sold down the past few days. According to the 'experts' it is because of down ratings by those masters of universe.

No doubt that this bank's management remains as prudent as ever and their balance sheets are still solid as a rock, but the selling down by everybody does not seem justify their usual thinking of buy and hold on a 'fundamental good' stock. No ? I mean whatever happen to their claimed "anti gravity stocks" ?

Taking a look at the bank's daily chart, you would notice the selling already started in June last year. The current sell down is merely a continuation of its prior trend. By applying a simple MACD indicator onto the chart, you would notice there was a bearish divergence therein where prices kept on new high but the MACD was only achieving a flat peak. Whenever we see such a divergence, though it does NOT necessarily mean it is the end of the world , BUT we do need to take extra precautions. The normal trade practice is that to sell off 1/2 of your holdings first and monitoring the balance for quick exit.

Here I appy a simple exit rule:- when price closes below the lower Bollinger Band , I will get out. With this simple rule, the final exit is on the 4th of March on open and you would NOT want to look at it until a new buy signal flashes.

By learning and applying a simple technical analysis based trading system, even though nobody can guarantee you will become a millionaire, but definitely it will keep you out of trouble. Most importantly of all, you do not need to be mislaid by the 'experts' into the slaughterhouse. Yes sir. I like that.