What does the turtle say?

Background – Turtle Trading

By the early 1980s, Richard Dennis was widely recognized in the trading world as an overwhelming success. He had turned an initial stake of less than $5,000 into more than $100 million. He and his partner, Eckhardt, had frequent discussions about their success. Dennis believed anyone could be taught to trade the futures markets, while Eckhardt countered that Dennis had a special gift that allowed him to profit from trading.

The experiment was set up by Dennis to finally settle this debate. Dennis would find a group of people to teach his rules to, and then have them trade with real money. Dennis believed so strongly in his ideas that he would actually give the traders his own money to trade. The training would last for two weeks and could be repeated over and over. He called his students “turtles” after recalling turtle farms he had visited in Singapore and deciding that he could grow traders as quickly and efficiently as farm-grown turtles.

Turtles were taught very specifically how to implement a trend-following strategy. The idea is that the “trend is your friend”, so you should buy if the latest closing price is breaking out to the upside of trading ranges and sell short downside breakouts. For example, one may consider this approach : the buy trade to be initiated on breakout on the new 40-day high, whilst the exit signal may be triggered by a close below the 20-day low.

Read more: Turtle Trading: A Market Legend | Investopedia http://www.investopedia.com/articles/trading/08/turtle-trading.asp#ixzz4AijLFOeH

What does the turtle say about SKPetro?

Using a price channel (20 day high, 20 day low):

SKPetro_3Jun2016_Turtle.png

As shown above, this clearly indicates that the closing price of SKPetro (as of 3 June 2016) had breached the upper band of 20-20 price channel, thus signifying a potential upward trend.

What do the other indicators say?

SKPetro_3Jun2016_Other Indicators.png

The other signals appear positive with:

1. 10D MA crossing above the 20D MA;

2. Breach of upper range of Bollinger Band;

3. Strong volume upon price breakout

Nevertheless, we may expect some resistance at RM1.74 and RM1.88 respectively.

DISCLAIMER: ALL ARTICLES CONTAINED IN THIS SITE ARE FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES MENTIONED ABOVE.

Author: Ken Utau

Data Scientist, Markets Analyst and Food Lover

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