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Preliminary Update 9/5/2008  



Welcome to
Koreanbulls.com
The Daily Section

This section covers the daily part of this website. For Weekly Support please click on the “Weekly” button above the top menu bar.

About This Site

This site analyzes all the securities listed in Korean stock markets on daily basis using end of day data. The job accomplished in the background is immense. Approximately one hour after the closing bell unchecked day's closing data is collected and a preliminary update is made for the convenience of our website users. The final update is made later after approximately 6 hours. Most of this time is used for dowloading of the final corrected data for all the stocks and for checking false and suspicious data. The filtered data is then once more analyzed by a very sophisticated algorithm and the final update is made.

The job at the background is very complex but presentation of the results is simple and user friendly. There are six trading signals posted. These are BUY-IF, BUY CONFIRMED, SELL-IF, SELL CONFIRMED, HOLD and WAIT. The signals are accompanied by daily commentaries. The commentaries are automatically generated for each signal and are revised in case of signal failures. A multiple factor weighting scheme assign stars to all the stocks ranging between zero and five. The average success of five star stocks is a very impressive 90.91%. Other important features of the site are: intraday confirmation status, portfolio tracking, stock scanning, and two-year signal history, all of which are explained below.

Most of this section of the site including the signals as well as the commentaries is open to public and free of charge. However, access to intraday confirmation module, star ratings, portfolio tracking and stock scanning are membership privileges.

The Philosophy

The philosophy shaping the signal system stems from our experiences which extend into quite a few years. This is not a trend following system. It emphasizes the identification of reversal points and is able to generate significant profits even in sideways and bearish markets. The essential tool used for this purpose is the Japanese candlestick patterns. The algorithm is able to recognize 91 different candlestick formations with high precision. It identifies relevant candlesticks applicable to each security on daily basis, explains the patterns shortly and generates a brief candlestick commentary. Interested investors may visit our educational website www.candlesticker.com for thorough information about each pattern.

This site transforms the investor into a dynamic and vital element of the trading system in order to cope with the speed and volatility of the market. This is a feature unique only to this site. To accomplish this, pattern based bullish and bearish alerts are issued. Alerts can only be confirmed under certain pre-defined conditions. The task of the investor is to check the validity of these conditions in the next day and then go long or short only in case of confirmation. The Signals section explains this process in more detail.

There is no fundamental analysis in this site. You won’t find balance sheets, news, experts, comments and gossip here which are conducive to manipulation and wrong interpretation. The aim is to create a truly objective system with no human interference at all (including even us). The system prevents interference of human emotions with trading decisions.

The Signals

BUY-IF and SELL-IF are conditional pre-signals (alerts) that are generated on the basis of the candlestick patterns, using daily patterns, and they are posted for the next day. Traders should consider the signals as confirmed and place their orders only if the market action in the next day proves that the alert generating pattern is confirmed.

There are three specific and well defined rules of confirmation for the pre-signals. Each of these confirmation rules is associated with pre-defined and definite price benchmarks. The confirmation rules and price benchmarks applicable in the next day are precisely explained in daily commentaries. The investor is supposed to check if one of the three confirmation rules is satisfied or not by comparing the price activity of the confirmation day with the benchmarks. If the investor is convinced about the validity of the confirmation, he/she must place the orders without waiting the next day. The system frequently (in the absence of negating patterns) waits one more day, thus allowing a second chance of confirmation. If the pattern is still not confirmed, then the conditional signals should be taken as null and void and should be ignored.

BUY CONFIRMED and SELL CONFIRMED are post-signals confirming the conditional signals. They show that the pattern is confirmed. They are actually a warning and a last chance for traders to place their orders. If investors are unable to monitor the prices in the confirmation day, they may wait to see if the BUY-IF or SELL-IF alert has been transformed into a BUY CONFIRMED or SELL CONFIRMED or not, in the system. However doing so, investors may realize their trades at more disadvantageous prices.

HOLD comes after a BUY CONFIRMED and stays until the next confirmed SELL signal. It urges investors to keep their long positions as long as the HOLD tag stays.

WAIT comes after a SELL CONFIRMED and stays until the next confirmed BUY signal. Investors are urged to keep their cash positions as long as the WAIT tag stays.

The system monitors the performance of each signal after it is issued. The investors are notified by revised commentaries in case of slight signal failures. If signal errors reach to intolerable levels, commentaries are revised again to accommodate a special warning.

A transparent history of the confirmed signals is given for each stock. Wherever applicable, the history is given for the last two years. The success and failure of the signals are clearly shown with checks and cross signs. Moreover, investors can also see what has happened to a KRW100 invested two years ago and following signal based trading. The buying and selling rates in the history table are price benchmarks used for confirmation. Consequently, the signal history approximately reflects the prices at which an investor acting on the basis of signals can genuinely buy or sell. The gains reported in the history table do not include potential short sales, interest gains, and broker commissions.

Members Area

Our members enjoy certain privileges in return for a modest fee. These privileges are intraday confirmation status, portfolio tracking, stock scanning, and access to the stock star ratings.

Members can create and track their own portfolios. When the portfolio button on the members’ daily home page is clicked, an empty page opens. Adding a stock to a portfolio is easy. It is sufficient to go to the page of any stock and click on the “Add to Portfolio” button. A click on the “Remove from Portfolio” button on the stock page deletes this stock from the portfolio. The day’s signal, previous signal, gain/loss since last signal and star rating is reported for each stock on the portfolio page.

Stars are assigned to all the stocks on the basis of a multiple factoring scheme according to percentage gain in the last two years, in the last three months, signal hit ratio, volume and beta value. Stocks below a certain score are not rated and get no stars. The highest rating is five stars. The average success rate is 69.43% for unrated stocks, 85.14% for rated stocks and 90.91% for five star stocks.

Stock Scanning is a very effective and convenient tool that enables the members to scan the stocks with respect to the market, currently posted signal, star rating and volume levels. Simply select a stock exchange and then select a signal (e.g. BUY-IF). You can narrow the scope of your scan by selecting an appropriate star rating, e.g. only four and more (4+) stars, and volume (e.g. only stocks with a volume over 10 million). You will then instantly be provided with a list of all stocks satisfying your criteria (all the stocks in the selected Stock Exchange with a BUY-IF signal, a volume over 10 million,and a rating of four stars and above). To select multiple signals at once, hold down the Ctrl key while selecting the desired signals.

Using This Site

Koreanbulls analyzes the stocks in Korean stock markets. The home page is the introduction page. The weekly button at the upper left corner must be used to access the weekly home page. Two samples (one long, one short), that are showing the most successful single trades in the last two years history, are highlighted on this page. The member's home page however is enriched with a table that shows four recommended stocks from each stock exchange with BUY CONFIRMED, BUY-IF, SELL-IF and SELL CONFIRMED signals (from left to right respectively).

Navigation through the site is by use of the menu buttons on the top menu bar. Stocks can be reached by "Search Stock". Each stock has one daily and one weekly page.

A stock page displays the closing price, the candlestick pattern, the signal, a concise explanation about the interpretation of the pattern and the two year signal history of the stock. A detailed commentary explains what should be done and makes recommendations for the next day. A detailed quote for the stock can be found at the bottom of the page.
Rules of Confirmation

There are three symmetric confirmation criteria for BUY-IF and SELL-IF alerts. The investor is expected to monitor the market and check by himself/herself if any of these criteria hold or not on the confirmation day.

A BUY-IF signal is confirmed and turns into a BUY CONFIRMED signal by one of the three following conditions:

The market opens with an upward gap (an opening price above the previous close) signaling a bullish sentiment. The benchmark is the opening price. A confirmation is valid if the day’s prices stay above this benchmark. The pattern of this confirmation can be defined as a white candlestick with an upward gap.

The market opens at a level either equal to or below the previous close. The benchmark is the closing price of the previous day. A confirmation is valid if the day’s prices stay above this benchmark. The pattern of this confirmation can be defined as a white candlestick closing above the previous close.

The market opens with a big downward gap (an opening price way below the previous close) suggesting a very bearish day in this rarely observed case. However, the prices turn up and the day ends with a long white candlestick that still closes below the previous day’s close. The benchmark is the closing price of the long white candlestick. The pattern of this confirmation can be defined as a long white candlestick closing below the previous close.

If one of these conditions is not satisfied, the BUY-IF alert remains valid without confirmation and three confirmation criteria are sought in the following day. The only exception is a long black candlestick, which makes the signal void and invalid automatically without further search. If there is still no confirmation in the following day, the alerts are void and invalid regardless of the following day’s pattern and the search is terminated.

On the other hand, a SELL-IF signal is confirmed and turns into a SELL CONFIRMED signal by one of the following conditions:

The market opens with a downward gap (an opening price below the previous close) signaling a bearish sentiment. The benchmark is the opening price. A confirmation is valid if the day’s prices stay below the benchmark. The pattern of this confirmation can be defined as a black candlestick with a downward gap.

The market opens at a level, equal to or above the previous close. The benchmark is the closing price of the previous day. A confirmation is valid if the day’s prices stay below the benchmark. The pattern of this confirmation can be defined as a black candlestick closing below the previous close.

The market opens with a big upward gap (an opening price way above the previous close) suggesting a very bullish day in this rarely observed case. However, the prices turn down and the day ends with a long black candlestick that still closes above the previous day’s close. The benchmark is the closing price of the long black candlestick. The pattern of this confirmation is a long black candlestick closing above the previous close.

If one of these conditions is not satisfied, the SELL-IF alert remains valid without confirmation and three confirmation criteria are sought in the following day. The only exception is a long white candlestick which makes the signal void and invalid automatically without further search. If there is still no confirmation in the following day, the alerts are void and invalid regardless of the following day’s pattern and the search is terminated.

Intraday Signal Confirmation Module

This module is the biggest aid to investors seeking confirmation for a BUY-IF or SELL-IF signal issued at the end of the previous day. The intraday module starts 15 minutes after the market opens and ends at the closing bell. It calculates the "benchmark price" and shows the current confirmation status according to the above defined "Rules of Confirmation". It saves the investor from the trouble of making complex calculations to decide whether the previous BUY-IF or SELL-IF signal is "CURRENTLY CONFIRMED" or "CURRENTLY UNCORFIRMED" or whether it is "CURRENTLY REJECTED", according to the position of the current price with respect to the benchmark price, and according to the type of the candlestick formed at that moment. The current confirmation status may change during the session according to the intraday stock price. The final confirmation is given according to the closing price.

The module is a membership feature.

Stock Search

The search box is the main tool for searching stocks. It allows you to directly access the daily page of any stock simply by typing the stock symbol or company name in the search box and then by clicking on the GO button.

  Disclaimer  
 

The opinions provided herein are intended to inform. They come with no warranty of any kind. If you should choose to interpret Koreanbulls.com information as investment advice, you do so at your own risk. Investing can be a very dangerous venture and it is you who must assume the entire cost and risk involved in all of your investment decisions, should you choose to follow this advice or use this information. Koreanbulls.com staff, members of the staff's families, and/or entities with which they are affiliated, may from time to time, buy, sell or hold stock in and have other financial dealings with the companies that appear on the Koreanbulls.com web site, mailings, or publications. The information contained on the Koreanbulls.com web site, mailings, and publications is drawn from sources believed to be factual and reliable, but in no way does Koreanbulls.com represent or guarantee the accuracy or completeness thereof, nor in providing it, does Koreanbulls.com assume any liability. This information is given as of the date appearing on the Koreanbulls.com web site report or mailing, and Koreanbulls.com assumes no obligation to update the information or advice on further developments relating to any named securities. The information found on the Koreanbulls.com website, mailings, or publications is protected by the copyright laws of the United States and may not be copied, or reproduced in any way without the expressed, written consent of the editors.