KLSE: MAHSING: Tonight KTV On Limpeh!

Did any of you ride the Mah Sing Group Berhad bullet train to Hosay-land on Friday? If you did, congrats! Limpeh also profited from this stock. I watched it shoot up while taking my morning dump. It surged 20% in the 15 minutes it took for me to do a bowel movement! Very kick leh.

I literally watched the price action in real-time via Rakuten’s app. The bulls pushed up the price non-stop and trading volume was immense. Very exciting stuff!

In fact, I sold half of my holdings at 0.87 while sitting on the porcelain throne! I queued the other half at 0.95 while reaching for the bidet. I’m very pleased at my disciplined approach and systematic trading. A self-pat on my back is in order. *pat pat*

I bought MAHSING at 0.727 on Thursday, before the bull run. I originally read about this juicy stock tip from Research Hive, Rakuten’s trading calls Telegram channel. Please note that I take trading calls with a pinch of salt. I mostly read them as entertainment and to have my finger on the pulse of the market.

However, I have been meaning to get MAHSING shares for about a month. The fundamentals are okay, the dividends are decent. I’ve put it on my watchlist. When the news broke that they’re entering glove production, I thought now’s a good time to get in and watch it fly. The market is highly sensitive and reacts positively to all glove/face mask production news.

I’ll go through my trading approach and explain why I did what I did:

Why did I enter at 0.727?

On October 15th (Thursday) 0.727 is close to the daily low. MAHSING has been trending up for the past 7 days in a predictable pattern. It opened at 0.73 on Thursday and pushed up to 0.775 before retracing to 0.725. I figured 0.727 was a good point of entry since it’s the support of the uptrend channel so I queued there.

Why did I only sell half initially?

I only sold half coz the price action was very bullish, with thick green candles. I saw there was plenty of room for more profit but I also wanted to lock in some of my profits. A disciplined approach in cases like this is to just sell half to lock in half your profits and let the other half run.

Why did I sell the first half at 0.87?

0.87 is the previous resistance. In 2020, the highest MAHSING has ever gone was 0.91. I set my first sell batch at 0.87 coz that was the resistance that’s been tested a few times in August with no breakthrough. Always sell at resistance unless you have a longer-term plan.

Think of resistance this way: Why is nasi lemak bungkus normally sold at RM1.20? I’m sure many traders have tried to price theirs at RM2 or RM3 or even RM5 but no one wanted to buy their nasi lemak at that price. Thus, RM1.20 is the resistance e.g. the max amount the public is willing to pay for what they think nasi lemak is worth.

Why did I sell the other half at 0.95?

Stocks will only increase max 30% for stocks above RM1 or 30 cents for stocks below RM1 per day before hitting limit up. This is an artificial cap set by Bursa Malaysia to prevent price manipulation and reduce volatility. MAHSING opened at 0.75 on Friday, and with the “under RM1 stock” rules, the max it will go is RM0.30 more, or 1.05.

I used the more conservative 30% increase instead because I saw price rejection at 0.97 (highest it went on Friday) and queued to sell my other half at 0.95.

You may have your own set of rules. The point of rules is to give you a disciplined approach to trading while still being flexible enough to respond to real-time market data.

Why did I not keep the stock long term?

I have serious doubts about new companies going into gloves. There was a spate of such new ventures a month or so ago, which resulted in a short spike in their share price before retracing. It’s for goreng only.

Reason being, there’s a big economic and technological moat surrounding the glove industry. You need FDA certification. There’s a huge initial investment in equipment. It’s not easy to start production and get certification, and it takes a long time for new players to get up and running.

I already have a significant amount of my investing war chest in the Big 4 glove stocks and I prefer to invest in these solid, proven companies instead of a startup. However, I’m always game for a good ol’ big breakfast fry up!

Uncensored trading results:

I invested only around RM3,000 into MAHSING. Again, this is based on my own trading rules. Even though MAHSING is a decent company, this is a pure trading play. I wasn’t going to keep the stock long term. Read Cooking With Fire: How To Goreng Stocks for my systematic approach to the riskier plays.

I bought 4,000 units of MAHSING at 0.727 for RM2,910.41 and sold it at RM3,629.36 for a RM718.95 profit. That’s a 24.7% profit in two days!

Treat goreng stocks like your pirated DVD business. Don’t invest too much and don’t be too attached. Send your machai to pasar malam and dodgy malls to hawk your shiny disc wares and get out of the business before Netflix kills the physical medium. Take profit while you can and cabut!

Trade smart, financial gangsters!

Start trading and investing now with a Rakuten Trade account. You can sign-up and get approved entirely online! Register now using my referral code and we’ll both get 500 RT Points! You can convert the points to AirAsia BIG, B Infinite, or Bonuslink.

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