Roller-coaster ride

The bearish sentiments still prevail in the market. KLSE yesterday opened with a slight dip due to overnight Dow's small loss. It then rebounded on speculative buying especially on Gamuda and KPS, CI bounded to the intra-day high of 1136, and profit taking sets in. In the afternoon session, CI took a dip due to heavy selling on plantation heavy weights like SIME, KLK and IOICorp, many that posted gain the morning session turn red. KLCI finished the day at 1121.25, near the low of 1120.31. Volume increased to 450 million shares traded, with market breadth at 258 gainers to 344 losers. The increase in market volume indicates selling by the foreign fund especially on blue chips.

The Support now at 1120 is critical, if this is broken, we may see the CI plunging towards 1102. The other leading indicator is the CI future, FKLI for July has already gone done to the low of 1083 and closed at 1090, running at 31 points discount to the cash market.

The market will turn irrational, when major support like 1100 is broken, this will draw another round of irrational selling. However, as it always is, at the selling climax, it is always the market bottom. Hold your belt tight for the roller-coaster ride and get ready your bucket for the quality stocks at deep discount.