KLSE: HARTA – Head And Shoulders Pattern? Hantam dia!

I watched the head and shoulders pattern resolve on Hartalega’s chart with great pleasure. I’ve been reading up on candles and charting patterns and this was the first time I’ve seen the pattern develop so clearly. I monitored it for a few days and watched it break the neckline, plunge a similar distance, and went in when it recovered. This was an ultra-explicit HD 4K textbook example and it’s been steadily going up ever since. 😋

What is the head and shoulders pattern?

This is said to be the most reliable price action pattern. It’s a bearish signal e.g. the stock is on a downwards trend.

Isn’t that a bad time to buy a stock though? Will go Holland one wor. 🇳🇱 Not necessarily. I don’t just do technical analysis when deciding to buy a stock. The company must be solid, with good fundamentals, and Hartalega is one such company. Hartalega is the second biggest among the Big 4 glove stocks but their net profit in 2019 is the highest among all! Hartalega also has the best ROE (Return on Equity) out of the 4, showing them to have superior efficiency and management.

Tunggu apa lagi? Hantam kau kau!

The best time to go in is after the head and shoulders pattern completes. This is not an exact science but the idea is to wait for the price to plunge the same distance as the head to the neckline before entering.

That should be RM10 but it didn’t go that low. It’s worth mentioning that these patterns are not 100% textbook or we’ll all be billionaires.

Savvy investors will wait for the confirmation signal of an uptrend before buying in. Meaning, you must see it go up (instead of down) after it hit the new low before purchasing. I want to be that kind of investor so I waited till it reached RM13 and entered at RM13.11.

This is my most satisfying purchase among the boring dividend stocks and dubious goreng stocks in my portfolio. It’s been up 7-8% since then. Hartalega’s upside has not been fully explored – meaning it has more room to go up, up and away! 🚀

With knowledge and practice, you can invest in a systematic and disciplined manner. Here’s wishing you green skies and overwhelming profits in the battlefield, kawan-kawan sekalian. 📈

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