Millionaire Trend Trader: Corrections

Monday, May 26, 2008

Corrections

Previous week was a bad week for the KLSE, it started the week on last Tuesday with a negative response to Tun Dr.Mahathir's exit from UMNO and continued with more corrections on the KLCI. The KLCI closed the week at 1274.78 near the weekly low, down 26 points w-o-w forming a bearish engulfing candle pattern on the weekly chart. This week, the KLCI is expected to continue testing its immediate support at 1271 and a critical support at 1264. If 1264 is breached, then CI may visit 1250, which is the 38.2% Fibonacci retracement level of the recent up wave.

A new record high of crude oil price of USD135 has put more inflationary pressure on the US economy, hence, the downward correction of the DJIA to close near the week low at 12,479.63 forming a bearish engulfing candle on the weekly chart.

For the KLCI, the continue high price of the crude oil may have positive effect on our plantation stocks, hence, may cushion off the downward pressure on the CI slightly. Plantation and oil and gas stocks such as Ioicorp, KLK, Swkplnt, Dialog, Kencana, Sapcres, Tgoff may continue to attract attentions of the investors.

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 solely your own responsibility. Do consult your dealer before taking any action.

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What's happening now is that the market remains trading at very thin volumes and that can affect prices, even when just a handful of shares are traded. The decision of any fund to pull out from certain stock hits the price. - Carlos Slim

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When people are frightened, they cut their time horizon dramatically, even advisors will say to sell because they see portfolios crumble and they fear people will have nothing left. It's really not rational, but it does happen. - David Dreman

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If you believe that some day it's going to happen, some day it probably will happen. You just have to make sure you're there when it's happening, and ideally you're at the front of the parade, and the principle beneficiary of when it happens, but it's not a kind of thing where you just sort of sit back and wait. - Steve Case

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Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed. - Benjamin Graham

The price pattern reminds you that every movement of importance is but a repetition of similar price movements, that just as soon as you can familiarize yourself with the actions of the past, you will be able to anticipate and act correctly and profitably upon forthcoming movements. - Jesse Livermore

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Monday, May 26, 2008

Corrections

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