CK had rallied from its bottom at 2.08 THB/share on 21 November 2008 to a new high and a 200 week SMA resistance at 7.10 THB/share on 2 October 2009 (a 241.35% price appreciation in 45 weeks equivalent to a 314.79% per annum compound interest). It had failed that major resistance. Since then the stock had been consolidating and had tested 200 week SMA resistance at 6.52 THB/share on 26 March 2010 and had failed for the second time. After another round of consolidation for 11 weeks, CK finally broken above 200 week SMA resistance on 18 June 2010. At present, the stock price (6.55 THB/share), 25 week (5.69 THB/share) and 50 week (5.64 THB/share) SMAs have made their ways approaching the 200 week (6.35 THB/share) SMA which had become a key support level for the next rally to a new high.
Ideal investment case based on exact prediction of bottom and peek stock prices
- Affected by subprime crisis, CK stock price had made its way down to the bottom of 2.08 THB/share on 21 November 2008.
- We entered our investment right at this bottom price (we actually never knew this would be the bottom at the time).
- Various economic stimulus plans had been launched, CK has won various giant infrastructure projects including the purple-line underground mass transit railway.
- CK stock price climbed up to the peak of 7.10 THB/share on 2 October 2009.
- We exited our investment right at this peak price (we acutally never knew this would be the peak at the time but we knew that the price had hit a very strong reistance of 200-week SMA line).
- This ideal investment gave a gain of 241.35% in 45 weeks, equivalent to 314.79% per annum compound interest.
Practical investment case based on a strict simple moving average buy-sell strategy
- Affected by subprime crisis, CK stock price had made its way down to a new low of 2.08 THB/share.
- It recovered from that new low, crossed over and consolidated along the 25-week SMA line for 20 weeks.
- The price crossed over 50-week SMA line.
- A few weeks later on 19 June 2009 the 25-week SMA line crossed over 50-week SMA line at a level of 3.65 THB/share.
This triggered our buy signal and we entered our investment in CK at the price of 3.90 THB/share.
- Various economic stimulus plans had been launched, CK has won various giant infrastructure projects including the purple line underground mass transit railway.
- On 2 October 2009, CK stock price climbed up to a very strong resistance at 7.23 THB/share of 200-week SMA line.
- Most of the time a recovering stock would not have enough energy to pass the 200-week SMA line in its first try.
CK failed to close above the 200-week SMA line of 7.21 THB/share. This triggered our sell signal and we exited our investment in CK at the price of 6.80 THB/share on 9 October 2009.
- This practical investment gave a gain of 74.36% in 16 weeks, equivalent to a 512.14% per annum compound interest.
Below is a CK 5-year weekly chart as of 16 July 2010. Click on the chart to enlarge it.