The KLSE saw another round of sell down on the plantation stocks yesterday, with IOICorp -0.50, SIME -0.30, KLK -0.80, PPB -0.25 dragging down the CI to close at 1128.86, -19.82. The falls of the plantation stocks was anticipated in light of the falling commodity prices with crude oil down to an intraday low of USD118. This has cause the recent short term uptrend or rather technical rebound to end its uptrend at 1164.As mentioned in last week's posting, the 1160 level of the KLCI is an important level to hold, if this fail, more downside will be anticipated. As of yesterday's price action, the CI has made a 50% retracement of its recent run up, the critical support is at the 62% level of 1117 which happen to be the strong support area of the previous down trend. If this level is violated, full downside is expected, and of course the 1100 critical psychological support is of utmost important. There after we are talking about downside targets of 1090, 1050, 1030 and even 980. Numerous factors can bring down the CI, somehow.
Technically, we can see that 1164 was actually a strong resistance area with the down trend line blocking the way and the long term MA are still pressing the price downward. However, if one do pay attention to individual stocks, one would have found that there are stocks that are not falling in tandem with the market, bucking the down trend. Perhaps these are the opportunities during a crisis. The dump money is selling now, and the smart money is accumulating. Try to spot signs of accumulation. For the retailers, money and risk management is most important at this kind of uncertain time.
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