NimbusCapital

[Analysis] iFast (AIY)(SG) Bullish but, plan for averaging down

Long
IFAST (SGX:AIY)  
SGX:AIY   IFAST
Despite the recent 19% retracement from the All-Time High of 9.680 to a low of 7.80, iFast is still extremely Bullish in terms of a long-term trend.

As investors or even mid-term traders, one's strategy should always account for such a level of retracement.

The current support level is at 7.770 to 8.00. If you are looking to purchase at a lower price than the current price, this is the level that you should be looking at. When dealing with uptrend stocks, it is never wrong to buy in at the current price because you do not want to risk missing out on an entry when it suddenly rallies to a high price. However, most investors mistake putting up all the funds available and not accounting for a possible retrace. If the price does retrace, you will want to take advantage of the lower prices by averaging down. This assumes that your risk on all of your positions (including averaging down) is within your tolerance.

The next support level is at 5.500-6.500.

Beyond 5.500 is bear territory, and you should not hold beyond that. Hence you can work out your risk and entry strategy using 5.500 as a cut-off price.

I personally like to go the 40-40-20 route.
40% of the allocated fund at the current price
40% of the allocated fund to average down at first support
20% of the allocated fund to average down at second support (lesser weightage as chances if price reaching that level is not high)


If the price goes below 5.500, you have to ensure you are within your risk tolerance for 100% of your position.


"Plan the Trade"
"Trade the Plan"!

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