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Watch only trends: Stock analyst gets technical
Thai securities analyst Wanchai Thanjasiri told stock investors in Ho Chi Minh City Monday to focus on price trends, not macroeconomic numbers or other investors’ actions.
“Use your eyes, not your ears, believe what you see in the [price] charts,” Thanjasiri told a forum titled “Vietnam Stock Market – A Crisis Situtation: How to Cope with It?”
The forum, organized by stock services company Kim Eng Securities Vietnam (KEVS), briefed local investors on the basics of technical analysis.
Thanjasiri, executive vice president of King Eng Securities Thailand and an instructor at the Thailand Institute of the Stock Market, said technical knowledge boils down to one “top secret” thing: the highest price of a trading day.
“If the [highest] price [today] goes higher than the highest price of yesterday, [the trend] is up.
“If the trend is down, don’t buy, just sell.”
Thanjasiri said, using technical analysis, he had predicted the downward trend of the Vietnamese stock market before it actually nosedived.
The VN-Index, which reached 366 last Friday, has gone as low as it could and it is useless for investors to be worried now.
“You have to stop loss at the top, not the bottom,” Thanjasiri said.
“The crisis was at 1,000 points, not at [around] 360.”
He said when the VN-Index was at around 1,000 points, it started to go down, and then bounced back but not to its previous height.
“[This is when] I know the crisis is coming.”
He predicted the VN-Index would climb back to the 1,000-point level in about 85 weeks, or more than a year and a half from now, and said once it climbs to 420, it would be time to start buying.
Local investors, especially short-term ones, should not to pay too much attention to GDP and the like, he said.
“Market action discounts everything,” he said.
“Look at the hedge funds. They tell you ‘this [or that] country is very good.’ Then you buy and they sell.”
Foreign investors’ action is not a good thing to follow either.
Thanjasiri said after the forum that foreign investors are often big-money, long-term investors who look at the “fundamentals” of an economy such as economic growth.
But local investors are often small ones.
“So retail or household investors [should] think like this: you [foreign investors] buy, I buy. You buy, I buy. You buy, I sell. That’s all.”
Nguyen Ngoc Vy, an investor attending the forum, said Thanjasiri’s “unflinching” faith in technicals is impressive.
“He looks at the Vietnamese market from one angle – technical analysis. He has a lot of experience and he may be right.
“If you play with stocks for a long time, you will either follow one theory or another.
On my part, I’m still influenced by macroeconomic concerns and will wait for better signs from the economy.”
Thanjasiri told the forum they might not believe him.
“Wait for five to 10 years, you’ll remember my words.”
Thanjasiri said he lost a great deal when the financial crisis hit Thailand in 1997, but has learned a lot since then.
Thanhnien
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