Downtrend biased

2020년 9월 27일

... but a trader is always prepared to face the consequences if he/she were wrong.

As we all know, the KLCI has had its bull run since March 2020 to date mainly driven by TOPGLOV and HARTA. Therefore we can say that the fall of gloves would be equivalent to the doom of KLCI.

I am on downtrend biased on a few possible events that may negatively impact glove (or this market as a whole):
1. The possibility of vaccine coming out
2. The end of moratorium in a few more days
3. The chance of this country going into a snap election

However, I am also aware that gloves may continue to rally for the below reasons:
4. The entry of local institutions (EPF has entered) and/or foreign funds (so far not very positive)
5. The possibility of the COVID-19 virus having mutation and/or the increase of cases locally & worldwide
6. The (over-)optimism of retail players on gloves being a good investment regardless of price points

Currently I am holding put warrant FBMKLCI-HAR, which is expiring end of March 2021.

If on 28 September 2021 (tomorrow) the market closes above 1515, I am reducing my lot size by half and will do some intraday trading on gloves to cover the losses (with hopefully a nett gain).

If on any trading day the market closes above 1530, I take it as an uptrend confirmation and would go bullish on gloves, and would clear my put warrants on the next trading day.

However, I would maintain the put warrants on my watchlist as I am of the opinion that this market will still be bearish due to the disconnect from the real economy and shall one day join the reality. We just have to see when is the good point to get into put warrants (again) when it is cheaper.