(Click to enlarge)
Last week was a consolidation week for the KLCI after a rapid correction of the CI the previous week. KLCI was mainly in the sideway mode the whole of last week swinging between 1370 and 1400 with 1380 as the short term strong support. As mentioned in the previous post, the long term trend of KLCI is still up, medium term is going sideway and the short term is volatile.
We must thank our government for managing the CI very well, when people in the world's largest economy were having sleepless night in the past weeks, our stock market, a barometer of the economy is still performing okay. All these are a result of the effort to create a pre-election feel good factor.
Where is our KLCI heading next? We may move in tandem with the rest of the major indexes, especially the DJI. DJI has managed to stay above the 12000, and closed last Friday at 12743, hopefully with Bush government's economy rescue plan DJI will stabilize around the current level. CI may move between a range of 1370 to 1420 for the immediate term. With the coming national election factor, there may be some chance for those who like to punt the market to make some money but trade with caution, and always have your stop loss in place.
Jesse Livermore, one of the greatest trader of all time used to say that the stock markets are designed to fool most of the people most of the time. News is a way the insiders fool and manipulate the public but there is one thing that does not lie and that is the chart. If you can close your ears to the lies and learn to read a chart you can be in the 10 % of players who make money.
Lastly, I wish everyone a happy and joyous Chinese New Year, Gong Xi Fa Cai, and may you get a big Ang Pow from the market.
Reminder: Drive carefully.
