Hartalega along with Top Glove is one of those stocks that has been rewarding investors nicely. The stock is still in a very nice uptrend. Will this stock continue to reward the patient investor?
Once again we will look at the charts to aid us.
I will do the technical analysis (chart and sector analysis) and you will supplement it with your own fundamental analysis. When we combine these two disciplines, it brings the best of both worlds.
Just like Inari, its been such a long time since I look at this stock.
There's one thing I notice about this stock when I look back at the past analysis I made. It's the kind of stock that I prefer people to invest in : )
The 45 degrees uptrend stock.
Somehow, these kind of stocks tend to go higher and higher till the trend ends of course.
One should not look at a stock without considering the trend. You should do your own fundamental analysis to complement my technical analysis. Anyway, below are the technicals for this stock. So far it is telling us that it is still healthy.
We will first begin with the weekly chart of Hartalega.
Well, this stock has been in an uptrend for a very long time. It is still in a nice uptrend and looks strong. Recently it broke out of a consolidation pattern.
At this moment, one should still be bullish on this stock mid term term as long as it stays above the rising weekly 20 MA.
There are two support areas in the weekly chart which I would like to draw your attention to.
First is the immediate support which is the previous resistance. TA tells us that a resistance once broken will now act as a support.
As long as the stock stays above this support area, then short term wise it is healthy.
The other support area I would like you to take note is the second line I have drawn. Notice how the stock formed 3 bottoming tails there? The fact that it formed 3 bottoming tails show us that it does not want to go lower at that point.
So it will be an important long term support area for Harta. Do take note of that for long term investors.
The chart above is the daily chart of Harta.
As you can see, it recently broke out of a short term consolidation. It also broke out of a daily resistance as well. You can see it in the weekly chart I have shown you but I think it is clearer when we zoom in to the daily chart.
So as long as Harta stays above 6.00 then short term we can consider that this stock is taking a rest and trading sideways before shooting up higher later.
I have colored the recent consolidation with green. Be careful short term if it drops below the area.
But overall, long term holders should not worry that much as long as the stock stays above the second line I have drawn. It is the area in the weekly chart I have shown you where 3 bottoming tails appear.
Let us start off with the daily chart of Hartalega.
Hartalega has been in a nice daily uptrend. Going up in a 45 degrees angle is one of the keys to success in the stock market.
As the stock is moving up, it provided many trading opportunities as well as opportunities for investors to add to the stock. Hartalega bottomed from the sideways movement in October 2017 by forming an ascending triangle bottom.
Next, it had a box breakout. Then it formed 2 ascending triangle continuation patterns. As I have shown you in the past, the ascending triangle is one of the very best patterns to play in Malaysian stocks.
I just want to take some time to explain about this pattern. If the ascending triangle pattern is very large and big, then it is more suitable for longer term investors as the breakout might be slower. On the other hand, if the ascending triangle is smaller and more refined, they are more suitable for traders.
If you play this pattern more and more, you will begin to realize the small subtle differences. Which is why it is important to specialize in the stock market so that you become very good at one thing.
Being a Jack Of All Trades, Master Of None will not make you that much money in the stock market.
If you look at the ascending triangles in Hartalega, they are small and more refine. Which is why they breakout faster.
The most recent ascending triangle breakout is the 3rd one. The 1st and 2nd patterns are the best and most rewarding. The later patterns that develop will leave you with less risk to reward ratio and by the 3rd or 4th one, usually they get riskier.
Anyway, the trend for Hartalega is still up.
It is above its rising 20 MA and 50 MA and therefore, the mid term investor should still continue to be bullish on this stock. As long as the stock stays above the 3rd ascending triangle (which acts as a new support), the stock is likely to continue moving higher.
Let me just show you Hartalega's friend, Top Glove.
In a rising market, it is always good to see your neighbor in the same industry doing well. This means the bull run in the industry is genuine and it has more firepower to last longer.
Top Glove's stock looks almost the same as Hartalega. Both of them are trending up and whether you have invested in Hartalega or Top Glove you are still making quite a lot of profits from any of them.
The difference is the construction of the continuation patterns.
While Hartalega makes many ascending triangles, Top Glove choose to give investors a box type of continuation pattern. Along the way there is also my favorite 50 MA buy the dip play.
Top Glove recently broke out of another box.
As long as the stock stays above this box which acts as a support area, investors can remain bullish in it. The stock is also above its rising 20 MA and 50 MA. So far the trend is strong and there is no weakness in the stock yet.
If I have time I will do a separate analysis on Top Glove.
Let us now move back to the protagonist of this article. The chart above is the weekly chart of Hartalega.
Needless to say, it is in a very strong weekly uptrend. There is something wonderful about stocks in weekly uptrend. They tend to want to go higher and higher and higher surprising many people.
The trend is indeed your friend.
The stock broke out of a weekly downtrend line and has been moving higher ever since. Since the trend in the weekly chart is up, therefore we should continue to have a bullish bias.
I will now take you to a 50,000 feet view of Hartalega. The chart above is the monthly chart of Hartalega.
This stock has been trending up even in the monthly chart. A characteristic of what we call a "Home Run Stock". This reminds me of Amazon which has been a mutli bagger for early investors.
The other one is Warren Buffett's company.
I believe stocks that are in a long long long term uptrend are some of the best stocks to play and invest in.
I just want to show you the monthly chart of Berkshire "Had A Way". Warren Buffett's company really has a way doesn't it? The way it goes is uptrend even in the monthly chart.
I don't know everything that Warren Buffett has ever said about investing but I do know one thing...
His stock has been in an uptrend for a very very long time.
For those of us who are a fan or follower of Warren Buffett, we try and digest everything that he has ever said about investing. But have we ever really looked at how his company's stock chart behaved?
If we continue to try and bottom fish buying stocks that are in a downtrend, we are actually doing the opposite of what Buffett's stock look like. The next time you decide to do some value investing or Warren Buffett purchases, switch to the monthly chart and see if your stock looks like Buffett's stock.
Ok, I think I digressed a bit.
Let me just look at the 60 min chart of Hartalega right now for a short term view.
For short term traders, you want to make sure that Hartalega stays at the top of the daily ascending triangle. The stock is still grinding up higher but if it drops below the 60 min 50 MA, then it might have some correction. Anyway, as long as Harta stays above the support area, then things are still fine.
The rising 60 min 200 MA (yellow line) still hints of more bullish upside in the short term.
It is always beneficial to look at the chart of the sector that a stock is in.
The chart above is the chart of the Malaysian Industrial Product sector. Even the sector is trending up. Which is why many stocks in this sector are also going up.
When you decide to invest in a stock, it is always a good idea to check its sector's chart.
The KL Industrial Product broke out of 2 trendlines recently and shot up. This can present nice trading opportunities for those who are observant.
At this moment, the sector is resting after it ran up a lot. Perhaps it might form a flag or some other kind of continuation pattern. As long as it stays above the support area, I believe it will help the stocks in this sector. A breakout higher will also help Harta and Top Glove.
Last of all, I want to show you the monthly chart of the KL Industrial Product sector.
While KLCI and other sectors are still struggling to make new all time highs, this sector has made new all time highs years and years ago. I can see two monthly ascending triangle breakouts as well.
It is always a good idea to play stocks in the best sector.
Choose the best stock in the best sector and in the best industry.
After all, you deserve the very best in your investments!
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