C-Wave up is on the way

US is now testing its August low (resistance) at 12,515 level. A break appears likely, which could send the index towards the 12,900-13,100 level next. Would the FED cut rates by another 50bps tonight? If they don't, then we can forget the 12,900-13,100 level as sellers would likely pile in..

STI - facing some difficulties... today would likely be another mixed day... still, i expect it to retest the 3,268 level soon. If not, then the index could ease to retest the 2,775-2,850 level again.

KLCI - lacking momentum too... this rebound needs to kick up higher from here - otherwise, it could be heading back to 1,340 or lower.

All in all, the global markets still hanging by a thin thread... the Bernanke's thread.. if he does not cut rates (then bye bye!!??!!).

Rebound to continue today

US markets is now doing its C-wave of this rebound rally. I expect both the STI and KLCI to follow suit this morning. STI could retest the breakdown level of 3,268 soon followed by 3,325 while KLCI to retest 1,417-1,420 first before testing 1,435.

For short term traders and intraday traders, this is a good time to get in but for longer term investors, it would be better to wait for longer until the market finds its footing.

The bear and the bull

We saw a bear and a bull market all in one week. Wow!! I know some traders which made money on both side - they ought to be put on a pedestal!! hahhaaha... They are really good.. anyway, this week - rebound should continue...

US markets - DOW could consolidate for another day or two before resuming its uptrend toward the 12,900-13,100. Thereafter, i believe that there could still be more downside from there. Should Dow beat the 13,100 resistance, then I may have to change my view. Otherwise, it should still be in consolidation, probably trying to find its bottom, the 4-year trough that almost everyone is looking for.

STI-should track the US markets for now... similarly, fall early week then continue on its rise towards the 3,268-3,325 level. Beating the 3,325 level would likely end this correction. Keep a lookout.

KLCI - It needs to build a base before it can rally again... Again, it needs to beat the 1,435 support-turned-resistance before it can run again... Be vigilant....

Rebound likely to continue

US markets are likely going into a rebound phase before another leg downwards. For the Dow, the upside should be capped at 13,100. If it goes above, then there is a good chance that 11,600+ was the bottom. Keep a close watch here.

STI rebounded from its 2,775 long term support. It could bounce to about 3,100-3,200 before falling again. 2,775 needs to hold in the longer term.

KLCI saw come support at 1,340. It could eventually fall to 1,287-1,300 after this rebound. 1,400-1,410 is likely the top of this bounce.

Strategy - Sell on strength.

Bye Bye Birdie!!

KLCI continue to outperform regional market due to its defensive qualities. Nevertheless, it fell below its trend line supportof 1435, suggesting that it could ease to 1,377 its 38% Fibo and also its 100-day SMA. A minor bounce could take place then (probably Thursday)... till then, as the title says bye bye birdie!!

STI is expected to continue to plunge towards the 2,775 long term uptrend channel support. In the short term, a rebound could take place - probably sometime this week. Could be Wednesday or Thursday. Stay tuned.

Looking for a rebound

Regional market rebounded slightly yesterday. KLCI also rebounded from its strong support 1,435. However, with Dow falling another 300-plus pts, we could see a lower opening on the
KLCI. 1,435 - i think will be tested again today. A break below suggest that more selling could take place. But I believe that the level can hold because the US markets are very oversold and is due for a rebound - either tonight or Monday - which could last at a least a week. Longer term, the trend is down for the US - with Dow looking at 11,380-11,600.

STI - rebounded off 3,000 yesterday. Similarly, STI could start the day lower due to the US markets. But I believe that it could rebound later in the day or Monday. A rebound is also likely for STI as its indicators are oversold. Nevertheless, it is not a buying opportunity but a selling one.

Sell on strength is the strategy to employ on all markets.

KLCI support at 1,435

KLCI current support is at 1,435, its trend line from 1,141 to now. A break below would signal that more downside is likely. The next support is at its 100-day SMA or 1,371. The 38.2% Fibonacci retracement is also nearby - at 1,377. Keep an eye on 1,435.

STI is now at its support. Could rebound today from here or from its 3,000 psychological support. Near term - could rebound but the longer term outlook is still bearish. It fell below its long term support and could now head to 2,760-2,880. Its 38% Fibo is at 2,814.

KLCI's failure to hold 1490

It looks like KLCI could not 'de-couple' from the global market meltdown for long. This morning the KLCI fell 30+pts in line with the fall in regional markets. KLCI opened at 1,490 and continue to fall, breaching support after support. 1,470 support the index for a short while but sellers continued to pile in. It would likely be better to cut losses now for the selling pressure appears very strong.

KLCI to continue on higher

KLCI should continue to climb higher today on the back of a rebound in the US last night. After yesterday's minor pullback, I expect KLCI to reach 1,544 this week. Yesterday's stock picks still holds - could start to run today. Keep an eye on all.

STI - fell below support. Do not look good in the near term. Should be able to find support around 2,970-3,180. Capitaland and Wing Tai have broken below their support, suggesting more downside from here. However, Banyan Tree is still ok. So, only SingTel is looking bullish right now. Not much punting stocks to look at currently. Better stay away.

Dow could see lower after this current rebound. If the Head & Shoulder is correct, then Dow could be heading towards 11,500-11,650. At 12,100, there is a long term trend line support. Either way, the strong support is a quite a long way down. Expect more weakness in the coming days. The outlook could improve towards the end of the month.

KLCI to rally after minor pullback, STI to try to hold support

KLCI is expected to rally again after a short pullback today. The pullback is due to Friday's weakness on the Dow. Use this as an opportunity to get in. Plantation counters would likely lead the charge again today. Could reach 1,544 this week, where the next (projected) resistance is. I also like property counters like YNH Property (3158) and Mah Sing (8583). Scomi Eng and Scomi Marine could move sharply today or tomorrow. Construction counter Muhibbah is also going to be a star as it should hit new all time highs soon.

As for the STI, I think it going to track the US more closely. Well, at least, it is still holding within its consolidation triangle. Aggresive investors could continue to accumulate now while risk adverse investors may want to wait a while (for the index to stabilise) before getting in. The index could fall to 2,970-3,170 should the 3,268-3,275 support give way. I still like property counters in Spore - Capitaland, Banyan Tree, Wing Tai all seem to be holding within their respective triangles. However, similar to the STI, a break below its support, suggest that it is time to bail.

Dow - H&S pattern?

Dow fell below the critical 12,700-12,800 level a couple of days ago. It appears that the Head & Shoulder pattern is taking precedence. This is a very bearish signal. If the Dow do not close above the 12,900 level tonight, we could be seeing 11,500 in the coming weeks for the Dow.

Regionally, the indices are doing really well, holding above their respective support despite the sharp fall in the US (which has recovered slightly). STI continue to hold above the 3,300 level. This is also a critical level for the STI.

KLCI continue to reach new highs but I believe that a short pullback could take place beginning late today. This pullback could last until Monday (the earliest) or Tuesday. Once this pullback ends, I expect the index to continue on its rise to about 1,546. Longer term, I see the index reaching the 1,601 level.

Critical time

Why is this a critical time? Well, it is critical that Dow stays above the 12,750-12,800 level. If it rebounds from here, there is a good chance that the final rally for the bulls is on the cards. However, should this level give way, then, it is TATA to the bulls for at least another 6months. I believe that this is a good level to get in, as the stop loss point is close by. Comparing it to the potential of 'returns' then you will see why this is a good level to get in.

STI needs to hold above the 3,300 level (which I think it will). LT players should accumulate around these levels as I foresee that the STI could retest its 3,906 high again sometime soon.

KLCI is at its all time high now. Follow through buying is expected to lift the index towards the 1,490, 1.618x Fibonacci extension target. Continue to buy on weakness. With construction and plantation counters already moved, property could be next. The 2nd Board is also looking good. Start looking for a pick up in volume in lower liners. They could be the next short term 'star'.

RM at new highs

In Bernama's report today - the Ringgit (RM) surged to RM3.28 against the US dollar, a new 10-year high, on strong commercial demand, particularly from foreign funds.

My 2 cents - Does this mean that a RALLY in the stock market is going to start soon? I believe so. Get ready for the ride of your life :)

Accumulate slowly

I believe that this is about a good time to accumulate good stock as any. If my wave count is correct, then the US's and Europe's 4th-wave correction is about to end. Asia is likely already in the lead, with its 5th wave already on its way.

US could correct a bit more but this is about time to get in for the big and final rally of this bull run. Still, for this count to be 'correct', it has to stay above the 12,760-12,800 level in the upcoming trading days. A break above the 13,450 level would confirm that the 5th wave is on its way.

STI - is now in the buying range of 3,300-3,400, marginally.. If it drops further today, then the market is enabling investors to get in at a lower level. Construction counters Tat Hong and HL Asia are 2 stocks that I like. The smaller construction counters such as Yongnam and Lian Beng also are looking ripe to move. Property counters would follow suit.

KLCI - is now in the buying range of 1,420-1,440. Similarly, large construction counters such as Gamuda, WCT and IJM have already moved. Oil and Gas counters could move soon too as investors would like hop on the 'idea' that crude oil is close to US$100 per barrel. Plantation counters would also continue to gain further despite it outpacing the rest in Dec. Today, steel companies such as Ann Joo, Kinsteel, Masteel would likely rally again after yesterday's short pause.

Ranhill (5030) and RUBHD (5050)

In the Business Times today, Ranhill and its unit Ranhill Utilities (RUB) said they would always seek proposals to improve shareholder value in response to queries by Bursa Malaysia. There were reports that Tan Sri Hamdan Mohamad, the group's president and CEO, is planning to take Ranhill and RUBHD private.

Technically, the stock broke out of its bullish wedge pattern. Could see further upside from here. Upside target (is roughly based on the bullish wedge) is around RM2.75-2.80.

US Markets tumbled

US stocks fell sharply on the 1st day of trading in the new year. This is Dow's worst start since 1983. The fall was led by banks and computer companies, after the announcement of the biggest decline in manufacturing numbers in 5 years. Intel fell the most in a year after Bank of America lowered its ratings. Caterpillar and IBM led the sharp fall in the Dow. Technically, Dow is likely doing the e-wave of its corrective Wave-4's triangle. However, should it fall below the 12,800 level, then the count is likely wrong. For now, the call remains. The Dow would likely rally into the 1Q after the e-wave ends.

STI is also stuck in a triangle since hitting a high in Oct. A drop to the 3,300-3,400 level is likely. Investors would likely do well buying quality stocks around these levels. I remain bullish on STI as I am bullish on Asia right now, at least for the 1H of 2008.

KLCI is likely to build a base around the 1,420-1,440 levels. Investors could choose to buy around these levels as the medium term uptrend is still intact. Continue to accumulate on weakness.

Oil touched $100, commodities rallies

Crude oil rose to $100 a barrel for the first time in New York as record global fuel consumption threatens to outpace production. The 3-figures oil prices appears to be here to stay. Commodities elsewhere also continue to rise. Gold soared to a new high of US$860.10 an ounce while wheat and soybeans rose more than 3%. This rally in commodities was largely caused by the weakening US Dollar against major currencies. As US Dollar falls, it enhances the appeal of raw materials as hedges against inflation.

On this side of the shore - would the Malaysian Govt increase fuel prices? In the Financial Daily today, PM Datuk Seri Abdullah Ahmad Badawi said that the government will have to increase gasoline prices "when the time is right"- two days after a pledge to cap tariffs at the pumps ended. Travelling would cost$ more $$. Food $tuff would likely see further hikes. Roti Canai would cost$ 15% more. The inflationary cycle goes on...and on... HOWEVER, there is one BIG problem to all of this though - the disposable income the stays the same. :(

Minor pullback

STI ended the year with a bullish bar but in the short term, it appears to be still stuck in a triangle since the Oct peak. On the other hand, KLCI ended the year with a indecisive bar but week-on-week, the index is still looking bullish in the short term. What can we expect for the new year?

Investors should accumulate on weakness towards the 3,400 levels for STI and 1,440. Both indices are getting ready for a bullish 2008!! Investors also should be ready!!! Buy on weakness!

Technically, for S'pore - look out for Hor Kew Corp and Chip Eng Seng.
For M'sia - look out for TA Enterprise and Leader Universal. Ranhill could also run further today.