FBM KLCI - lower on continued selling pressure

Stocks on Bursa Malaysia closed lower yesterday with the benchmark FBM KLCI falling 10.06 points or 0.59% to end the day at the lowest point of 1,699.70. The index fell in the afternoon after Prime Minister Najib Abdul Razak announced a cabinet reshuffle, in which he removed Muhyiddin Yassin as the deputy prime minister and replaced him with Ahmad Zahid Hamidi. Losers thumped gainers by 726 to 197 with 251 counters unchanged. Total volume fell to 2.14 billion units valued at RM2.25 billion from 2.22 billion units valued at RM1.8 billion. Read more >>

FBM KLCI - likely to trend higher

Stocks on Bursa Malaysia ended on a firm note last Friday with the benchmark FBMKLCI hitting more than a two-week high, boosted by year-end window-dressing activities. Bursa Malaysia was closed on Thursday for Christmas holiday. The benchmark FBMKLCI rose 14.70 points or 0.84% to 1,764.44 after moving within a range of 1,747.20 to 1,765.61 throughout the day. On a Friday-to-Friday basis, the key index gained 48.45 points or 2.82% from previous Friday’s 1,715.99. Gainers trounced losers by 436 to 255, while 301 were unchanged. Total volume fell to 846.49 million shares worth RM870.12 million from 1 billion shares worth RM995.56 million on Wednesday. Weekly turnover dropped to 4.99 billion shares worth RM5.17 billion from 9.42 billion shares worth RM10.63 billion the previous week. Read more >>

Consolidation

In response to the overnight 215 points gain of the DJI, our KLCI started Wednesday with a 3 points gap up on opening and hit a intraday high of 1373, and profit taking sets in quickly. KLCI has been maintaining in the positive zone most of the day. At about 3.30 pm, the market took a dip as a result of the "limit-down" action of a few speculative stocks. The actions really affected sentiment of the general market at a time like this, where the market is just trying to recover from the recent correction. However, the magic hand is there doing his job and closed the KLCI at 1366.58, with 1.59 points gain. Market breadth remains weak with 297 gainers and 556 losers, volume is back to 1 billion share level. As mentioned previously, our market is consolidating at the current level with a trading range of between 1340 - 1380. The general market will only regain activeness if only the KLCI can goes above 1380.

Majority of the regional markets have also moved into the base building consolidation phase except Shanghai index (SSEC), where it has just broken the 120 days MA support, and may go further down to test the support at 4335.

The bulls on the DJI are fighting back, and the index has rise about 545 points over two days to bring the DJI above the 13,000 mark, back to the uptrend channel and above the 200 days long term MA. The bull may meet some strong resistance around the 13,500 level. Whatever it is, at least the Dow is back on track, and may goes into a consolidation phase between 13,000 - 13,550.

The sentiment of our local market was really affected by the plunge of the RL group of stocks, taking the lead was ETITECH, COMINTL, OILCORP, and KBES. If one wants to play these kind of stocks, one must always be happy with the profit when one have it, don't try to take every drop out of it, then one may end up giving everything back and may even get roasted.

The plantation sector remain steady in anticipation of the listing of Synergy Drive tomorrow, hopefully SD will lift the sentiment of the market and kick-off a new round of rally. Some of the plantation stocks that are worth watching are Twsplnt, Kretam, Cepat and Harnlen.

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.

Mixed Market

The local stock market yesterday started the day with a short joyful moment, CI was positive until 10 am, thereafter it went into the red territory for the rest of the day and at last minute the CI closed at 1374.39, up 2.01 point. Our CI is always good at performing last minute magic show, good job. This is important to keep the investors' confidence of the local market, as most people like to see the market up so that they can sleep soundly. In actual fact, the CI has been in a selling pressure mode due to investors cashing out on the Synergy Drive related counters (many are CI link stocks), as well as news that India's authority was intervening their stock market, record high oil price and a renewed fear of the subprime credit issues, brings fear of a repetition of the 1987 October 19 crash.

If at all the crash does happen, what should you do? Sell everything and keep your money underneath your pillow. If one is really fearful of that will happen, he (she) should sell before this Friday, wait and see the market will crash on that day or not, if the crash didn’t happen, buy everything back five minutes before market close. Some may say, I’ll lose on commission, no, that is called insurance premium. If the crash does happen, you can sleep soundly and look for bargain / discounts while watching the stocks fall. Is this a good idea? It is really up to you and depends on your trading plan.

Back to our market, it was a mixed market with 444 gainers against 409 losers. Some stocks were under selling pressures, and some did a good show. Idaman, was one of the good performer. Unico also did well. Kretam shows a good up trend. The other stocks that show a probable trend change are Dataprp and HWGB. Dataprp is worth watching as it has been lifted off the PN17 rank.

(Click to enlarge chart)

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