A Golden Trading Opportunity

 
Below are data of the performances of Hang Seng Index for the last 2 trading sessions in December followed by the first 2 trading sessions in the New Year for the past 5 years:
30 Dec 2008 – 14,235.5   

---

   Bear market period
31 Dec 2008 – 14,387.48
02 Jan 2009 – 15,042.81  [Up 655.33]
05 Jan 2009 – 15,563.31  [Up 520.5]
30 Dec 2009 – 21,496.62
31 Dec 2009 – 21,872.50
04 Jan 2010 – 21,823.28  [Dn 49.22]
05 Jan 2010 – 22,279.58  [Up 456.3]
30 Dec 2010 – 22,999.34
31 Dec 2010 – 23,035.45
03 Jan 2011 – 23,436.05  [Up 30.04]
05 Jan 2011 – 23757.82   [Up 400.60]
29 Dec 2011 – 18,397.92 
30 Dec 2011 – 18,434.39
03 Jan 2012 – 18,877.41  [Up 443.02]
04 Jan 2012 – 18,727.31  [Dn 150.10]
28 Dec 2012 – 22,666.59
31 Dec 2012 – 22,656.92
02 Jan 2013 – 23,311.98  [Up 655.06]
03 Jan 2013 – 23,398.60  [Up 86.62]
The Hang Seng Index never failed to leap by over 400 points on either the first or second trading sessions in the New Year for the past 5 years – success rate of 100% so far!  Anyone who bought into the HSI Call Warrant on the last trading day of December and sold at the end of the first or second trading day of the New Year when the index leaped by over 400 points, would have reaped handsome gains. The odds of winning are extremely high on such occasions that it is truly a golden opportunity for anyone willing to take a bet. [Also well suited for those looking for quickie profits or contra gains.]
As an illustration, those who bought the most active call warrant b]HSI23000CW130130[/b on 31 Dec 2012 would have paid between 12.7 and 14.3 cts per warrant; and sold out on 2 Jan 2013 at between 15.6 and 19 cts. [Why HSI Call Warrant? Ans: Easy contra trade without need for CFD or Margin]. A transaction of 100 lots would translate into a profit (excluding transaction cost) as follows:
$1,300. – bought at the highest price on 31/12/12 & sold at the lowest on 2/1/13. (Min. gain)
$6,300. – bought at the lowest price on 31/12/12 & sold at the highest on 2/1/13. (Max. gain)
Outside the timing described above, the trading of warrants should best be left to those having the relevant knowledge, experience and skill to pull off many successful trades.
Next golden opportunity for such a bet – 31 December 2013, for those who can remember.
 
 

7+ more months to go before year end.

What're your favourite stocks now, Observer2?

Hi, Sana, I am not a trader, so I do not monitor or keep a list of trading stocks. However, I do trade once a while when the odds of trading success are considered high – like on a price breakout following a consolidation period. I am on the constant lookout for what I perceived as good growth stocks but only at an attractive valuation. Right now, I like Kreuz, SinoGrandness, China Minzhong and Dukang. Share prices of SinoGrandness and China Minzhong have already risen quite a lot and becoming unattractive for reaping good potential capital gains at current entry levels.
As good growth stocks are usually difficult to come by, I also look for what I perceived as greatly undervalued stocks [not necessarily a growth stock]. These are usually neglected or unpopular stocks that could take some time to see a re-rating in their share prices; their downside is generally considered as low but potential upside high – I consider Eratat and Fujian Zhenyun as 2 of them.
I could be wrong in my selection. Please don’t follow me without doing your own homework.

Trading is not for everyone, as one needs to have the necessary knowledge, skills and emotional stability to be a successful trader. However, many traders and investors are unaware that there are odd occasions where the winning odds for a trade are extremely high that even a novice trader can also execute a profitable trade with high degree of success. One such occasion (based on last 5 years historical data available in Yahoo Finance) is the first two trading sessions of a new year for traders of Hang Seng index or the first trading session of the year for traders of Dow Jones Index (DJI). I had already shared some basic information on the former at the start of this thread.

Below are the historical data of DJI’s performance on the first trading session from 2009 to 2013:

YEAR - OPEN - HIGH/LOW - CLOSING - UP/DN
2/1/09 – 8,772.30 ----9,065.30/8,760.80 –-- 9,034.70 --- UP 258.30
4/1/10 – 10430.70 ---10,605.00/10,430.70 – 10,584.00 – UP 155.90
3/1/11 – 11,577.40 – 11,711.50/11,577.40 – 11,670.80 – UP 93.30
3/1/12 – 12,221.20 – 12,479.70/12,221.20 – 12,397.40 – UP 179.90
2/1/13 – 13,104.30 – 13,412.70/13,104.30 – 13,412.60 – UP 308.50

The DJI has not failed to finish on a positive note on its first trading session for the past 5 years. Will it continue its winning pattern on 2/1/2014? While there is no certainty that it will, I believe the odds of it happening are extremely high now that much of the anxiety over Fed tapering are out of the way.

For those who are looking for New Year “angpow” and are prepared to take a “CALCULATED RISK” to trade stock indices, may the sharing above provide useful ideas to their endeavor to look for profitable trading opportunities.