Consolidation

The market turned very quiet the last few days, volume dropped to an average of just over 300 million shares. The KLCI is hovering around 1230 level, as mentioned is previous post the market sentiment is still bearish, and is entering into a consolidation phase with a downward bias. The high oil price plus political uncertainty is the current main concern of the market. CI may still move between
1215 to 1240 with a southward inclination. If 1215 is again breach, CI may again visit the 1190 territory.

Despite the gloomy atmosphere, there are some stocks that are against the general market trend, Takaful is one of them. However, one need to be more cautious trading under the current environment.


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.

Bearish sentiment

The market sentiment was bearish since entering June. The announcement of price hike in petrol on 040608 has caused a big fear in the market, and resulted in a sell down on last Thursday. The dumb money (panic sellers) was really irrational and push the CI all the way down to 1214, however, the smart money came in quietly to buy and manage to bring the CI up to close at 1223.56 (Thursday 050608). On Friday, the CI turned very bullish, moved by TENAGA,which saw the largest single day gain of Rm1.70, and closed the gap at 1248.57. On Monday, 090608, the CI again suffered another round of bashing due to DJIA closing down 394 points last Friday. However, the candlestick of CI actually shows an up day despite the fact that CI was down 17.59 points. This indicates that the big boys (smart money) was actually accumulating the blue chips at this level. Similar candlestick formations are seen in many of the blue chip counters.

The market sentiment is generally bearish, the moving averages of very short, short, medium and long term are all pointing south indicating down trend. Since CI had already broken all the key short term support at 1250, 1241 and 1233, the immediate support at 1215 is critical. If this is not defended, we may see CI revisiting 1180. For the immediate term, we expect CI to move in a narrow range of 1215 - 1250.

However, one don't need to be overly bearish, there are still counters such as KPS, Kencana and a few others that are moving in divergence to the down trend, if you do your home work, you'll be able to find them.


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.

CI heading south

On Monday, 020608 the CI was for most of the day holding around 1266 to 1268 point, but a last minute sell down push the CI down to close at 1262.49 (-13.61, -1.07%). Volume was very thin at 390 million shares. This indicates weakness and lack of participations in the market. As mentioned in previous post, the CI may slides further south to test the support at 1250, 1242 and 1233. The immediate 60 MA support is at 1255.

Last few days the market focus has been on those Property and Construction companies that have exposure in Vietnam, e.g . Gamuda, SPSetia, BJLand. Taking Gamuda as an example, from the lodgment to Bursa on changes of substantial shareholders, one can see that in actual fact the substantial shareholders has been selling their shares since 20May08, the big boys were doing it quietly at that period, however, the close on last Thursday which break the important psychological support at 3.00 was an indication of the selling down by the big boys. Hence, it is important to track the movements of the big boys. As there is no indication of bottom yet, Gamuda may move further down to test the downside target of 2.10. Don't try to buy low, any up move now is just a technical rebound, a chance for those who still hold the shares to sell. One will have to wait for a trend change before considering buying Gamuda.


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.