AirAsia

Evening all,

This is AirAsia, 5099.KL. In recent months, AirAsia has been flying high, with price gaining about 100% from the middle of this year. So what can I see on the chart? Nothing much, except the usual short pullbacks and consolidations along the uptrend. I am not too comfotable with such charts, especially when the counter is making all-time highs. I do not have past data to help me out with my analysis. Anyway, I do have something to add.

When a counter is on an uptrend, it will take pauses on the way up. Some of these pauses come in the form of small chart patterns – most often, small triangles. These are some recent examples.

   

Right now, I can identify a small symmetrical triangle in AirAsia, which was followed by another surge. Price made a high of RM2.73 a few days ago, and it has taken a breather ever since. I have drawn another small triangle that contains price action for the last 2 weeks.This triangle is not yet confirmed, and it may not even be a triangle at all. But it does look like it is taking a form of one, thus I decided to highlight it. The next few days will make things clearer.

What is the significance? Well, when I see small patterns along uptrends, they usually precede a new surge in price. So I will monitor AirAsia and see if that is what happens.

All analyses, recommendations, discussions and other information herein are published for general information. Readers should not rely solely on the information published on this blog and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.

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4 Comments

  1. Posted January 9, 2011 at 11:44 AM | Permalink | Reply

    Had bought back AirAsia at $2.40. Your sagely words gave me good reassurance “When a counter is on an uptrend, it will take pauses on the way up.”

    I believe many investors have to learn how to accept this, coming from their own research and believes – and thus determine to hold the stock on the upward triangles – and not to feel dampened and sell when a short selling spree takes place.

    My target is for AirAsia to go up to $3.00. That is in theory. And practically, I am holding it as long as I see the aviation industry and travel industry in going upwards. Each year more and more budget travellers will want to travel by air.

    With an ever increasing number of routes and destination, AirAsia has a solid coverage of destinations favoured by the new age traveller.

    • Administrator
      Posted January 9, 2011 at 4:00 PM | Permalink | Reply

      Denzuke,

      Thanks for the update. I see you are making money on that, since AirAsia is now at $2.70s. Warren Buffett says that sometimes the best time to sell is never. He believes that if a company (or industry) is doing well, and does not look like reversing, then why sell? : )

      All the best in your investment.

  2. Posted May 17, 2011 at 10:36 PM | Permalink | Reply

    That is indeed a wise quote.
    AirAsia is cementing its might and branding very well. It has now surpassed Malaysia Airlines in stock price! (MAS is about RM1.70-RM2.00 range).

    My dilemma is a whole segment of other stocks I bought have not been in the positives (TMCLife, Global Logistic, ChinaOilFld, Homeriz, Midas). My system really is not to sell stocks that are “losing”. And at the same time wanting to move some of those funds into AirAsia or others that I am researching.

    • Administrator
      Posted May 18, 2011 at 10:55 AM | Permalink | Reply

      Denzuke,

      I just took a quick look at the charts of all the counters you have mentioned. I remember you have been touting AirAsia ever since laast year on your blog. That was a really good spot, and I even have friends telling me AirAsia is truly better than the other budget carriers.

      Hmm, I saw the charts of the other counters you highlighted above. I must say, their charts do not look good at all. Most are in general downtrends right?

      I cannot really help you here, except maybe, a few words.
      I am sure you probably have your reasons why you got into those counters. I think it’ll be good if you take some time to think back to the time when you decided to buy into those stocks. Why did you choose them? Why did you want to “own those companies?” Did you have an exit plan? The important thing, I believe, is to follow your plan, follow what you wanted before, and not deviate. Which, I guess, is why your system is not to sell out now.
      Hmm, from what I see – the charts – I will be on the side of cutting losses. That is simply because I trust charts alot, and the charts of those counters do not look good. Yeap.
      But, I think you should trust your system. If your reasons as to why you bought those stocks are still valid, then hold on. If not, hmm, I guess you have to write them off as bad investments.

      Your dilemma is probably a common one. : ) I was in one as well. A whole bunch of counters I bought into, performed badly. I ended up cutting all of them. The reason was because what I expected to happen, did not happen at all. So I told myself, no point in holding them. If they do recover, it will be pure luck. So I cut them off, and had a few lessons to take home. And this is the important thing if you choose to sell now. Learning from what happened.

      I hope I’ve helped in some way.

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