(Click to enlarge chart)Regional market, especially HKSE, SSE, STI and JKSE has been making new high since the 17 Aug crash. The KLSE, however, is lagging behind these markets despite the many good news announced by the government. What is the market waiting for? Probably some new stimulus after Raya for that 20 points gain to breach 1400 on CI; or the market is actually having a fear of the 20th anniversary of the 19 October 1987 "Black Monday Crash", where DJI fell a hefty 508 points in a single day (or equivalent to 22% of the market capitalization then), hence CI is hesitant to move forward due to the fear of history repeats itself? However, this is anybody's guess.
The trigger for the 1987 stock market crash were the devaluation of US Dollar and the dafault in payment of the high risk and high interest "rubbish" grade bond; the situation today with the subprime credit problem and the continued devaluation of the greenback brings memory back to the past event, hence, the talk or forecast by some that the coming week, especially Friday 19 Oct 2007 is an important date to watch. However, my view is that the fear is actually more of a psychological one.
Those who practices technical analysis should know that one of the important tenets of technical analysis is "history repeats itself", this often shown well on the chart with some of the classical chart patterns such as head-and-shoulder, double top and even the candlesticks patterns such as shooting star, evening star, bearish engulfing, etc, where one is almost certain what is going to happen to the market next when one sees them, as history always repeat itself due to crowd psychology and the emotions called greed and fear. So, is the market going to celebrate the 20th anniversary by replaying the same show? Let's watch.
Coming back to our local stock market, there are actually plenty of opportunities if one is able to identify them. Some of the trending stocks that we identified earlier are still in strong uptrend position, i.e. BHIC, PPedana, Landmrk, Magna, Maybulk, BJland, BJCorp, JAKS, Sweejoo, and Complet. Some of the new additions to the trending stock family are Suria, Sunway, and Unico. Muiind and AMDB, despite the profit taking correction, the uptrend is still intact.
Ranhill, Scomi, and Mudajya are some of those counters which has recently corrected in price with the major trend still up.
Idaman is probably going through a short term trend change with strong upward bias.
Disclaimer: The above is not a recommendation to buy or sell, all suggestions mentioned are purely for academic study purposes for our trend trader club members only, and the author may have personal interest and position in some of the examples mentioned. Any losses incurred if you were to trade base on the study examples above is sole your own responsibility. Do consult your dealer before taking any action.
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