On the ball

Away indefinitely! (again!?!)

2009-08-18T09:58:00.000+08:00

Will be away for a while. Don't think I can write anything concrete at the moment... Be back in the not so distant future

Something that all traders go thru

2009-07-30T10:32:00.000+08:00

Many traders usually go through different phases in their trading in this particular order.

1. Methodology. The first phase is that all-too-familiar quest for the Holy Grail – a trading system that never fails. After spending thousands of dollars on books, seminars and trading systems, the aspiring trader eventually realizes that no such system exists.

2. Money Management. So, after getting frustrated with wasting time and money, the up-and-coming trader begins to understand the need for money management, risking only a small percentage of a portfolio on a given trade versus too large a bet.

3. Psychology. The third phase is realizing how important psychology is – not only personal psychology but also the psychology of crowds.

But Jeffrey Kennedy of Elliott Wave International thinks it is the other way around. I definitely went through the phases exactly as above. I went through the school of hard knocks!! Where was Jeffrey's advice when I started out?

Jeffrey thinks that aspiring traders should begin their journey at phase three and work backward. The first step in becoming a consistently successful trader is to understand how psychology plays out in your own make-up and in the way the crowd reacts to changes in the markets. The reason for this is that a trader must realize that once he or she makes a trade, logic no longer applies. This is because the emotions of fear and greed take precedence – fear of losing money and greed for more money.

After the aspiring trader understands a bit of psychology, he or she can focus on money management. Money management is an important subject and deserves much more than just a few sentences. Even so, there are two issues that I believe are critical to grasp: (1) risk in terms of individual trades and (2) risk as a percentage of account size.

Once the aspiring trader understands this psychology, it’s easier to understand why it’s important to have a defined investment methodology and, more importantly, the discipline to follow it. Jeffrey uses the Wave Principle as his methodology. His advice in this realm is that whatever you choose to use, it should be simple.

So, there you have it... New traders, pay heed! :)

How is the Ringgit doing now?

2009-07-29T10:23:00.000+08:00

Following my earlier write-up on the Ringgit, (see Where is our Ringgit heading to?), I said that the Ringgit is likely to weaken more then pre-peg levels of RM3.80 to USD after a short period of strengthening.

The Ringgit (MYR)is now strengthening in line with my earlier forecast. MYR, currently at RM3.5170, has strengthen from the RM3.6005, it wave-b high. It is likely to head towards the RM3.4355 levels in the coming weeks to complete wave-B, where wave-c is 0.618x of wave-a. RM3.4333 is also the 50% FR levels of wave-A.

Revised ST outlook for KLCI

2009-07-29T08:50:00.001+08:00

After the index took out the 1,164 resistance, I knew that my earlier count was incorrect. After relooking and recalculating the waves, I think this is more likely the proper count, which was the alternative count earlier.

The KLCI is now at a critical juncture. It can either stop here and now, where wave 5=1.618x of wave 1 at 1170.6 while a RF of 2.0x is at 1,172. The MACD has been sporting a lower high every time the index hits a new peak. This is a bearish signal, suggesting that momentum is slowly dwindling. However, it remains only a warning signal, telling investors to be very cautious now.

However, there is also a good chance that prices could even continue on higher towards the 1,200-1,210 levels if wave 5=0.618x of wave 1 thru 3. We will have to wait and see.

Improve your trading success with Elliott Wave

2009-07-24T10:40:00.001+08:00

EWI International is now offering investors a chance to get this 'trade guide/book' for free till 10 Aug. Just click on this link - http://www.elliottwave.com/club/best-of-traders-classroom/default.aspx?code=33996. Sign up and you will get this guide book for free. You will get to learn more about Elliott Waves and I think it will help you in your overall trading. Happy Reading and Trading!!

Thailand 1-1 Liverpool

2009-07-23T14:48:00.001+08:00

I saw the game live on Astro last night. I wanted to catch a glimpse of some of the youngsters of Liverpool FC, particularly Nemeth and Pacheco. They are supposedly very talented and could make a few appearance this season - whether is in the Premier League or in Cups. Anyway, the whole game was not the usual Premier league game as clearly, the whole Liverpool team was not match-fit. Nemeth showed some great touches and skill when he had the ball. I think he could come good this season but it depends on whether Rafa thinks so too.

What do you think? Can Liverpool win the league this upcoming season? If Gerrard is charged with affray and IF he is not available for a few months, do you think we can still make it?

KLCI is hitting its short term peak soon

2009-07-22T10:39:00.003+08:00

I believe that the KLCI is close to hitting its short term peak soon. At the time of writing, the KLCI is at 1147. I expect the KLCI to peak soon to complete wave 1. 1150 is based on 2.618x of wave 1 while 1153 is the based on the elliott channel. Its indicators are also showing signs of divergence, supporting the view that the benchmark index is close to a short term top.

Should the index do actually top near the 1150-1153 levels, it could pullback to at least the minimum 1132, back to Wave 4. Ideally, it should pullback to 1103-1120 of wave 3(iv), where the 38%FR is at 1115 and 50%FR is at 1104.

The alternative view (of a lower probability) is that the KLCI is already completed a short wave 2 down to 1132, then the index is likely heading towards 1218 next, suggesting that wave 3 has just begun and would likely extend further.

Where is our Ringgit heading to?

2009-07-20T14:20:00.003+08:00

Based on the the Elliott Wave Theory, the Malaysian Ringgit appears to be heading for another round of weakening - meaning our Ringgit is going to buy less goods elsewhere. More expensive tech toys :(

The Ringgit has fallen to a low of RM3.7365 in early March from a high of RM3.13 in April last year. There was a clear and distinct 5-waves movement, which I have labeled A. Hence, it is now in correction mode with wave-a completed when the Ringgit hit RM3.4695. It has since rebounded to RM3.6005, just shy of its 50%FR level of RM3.6030.

In the near term, the Ringgit could strengthen towards 3.4355, where c is 0.618x of a. The 50.0% FR at 3.4333 is also nearby. Hence, there is a good chance that the Ringgit could head towards those levels in the coming weeks tom complete Wave-B. Whether it could strengthen further, we will have to see and take it wave by wave.

I have a BIG arrow at the end of wave-c of Wave B to show that the Ringgit is going to weaken to below RM3.7365 in the coming months. The Ringgit could falter to about RM4.00 (if wave-C is equal to wave-A) to the USD if wave-C stops near the levels mentioned above. If Wave-C is 1.382x of Wave-A, then the Ringgit could weaken to RM4.2737. This would mean that the Ringgit is going to be weaker (maybe a lot weakner) than it was when it was peg at RM3.80.

Be prepared for it as the weaker Ringgit could 'probably' cause the Malaysian stock market to fall as well, just like the Asian Financial Crisis in 1997/98. Is the KLCI heading back towards the 263 lows? That is another question for another day. Happy trading while it lasts.

Liverpool's fixture list for 2009/10

2009-07-19T09:22:00.002+08:00

Liverpool 2009-10 Barclays Premier League fixtures:

August

15 Tottenham Hotspur (a)
19 Stoke City (h)
22 Aston Villa (h)
29 Bolton Wanderers (a)

September

12 Burnley (h)
19 West Ham United (a)
26 Hull City (h)

October

3 Chelsea (a)
17 Sunderland (a)
24 Manchester United (h)
31 Fulham (a)

November

7 Birmingham City (h)
21 Manchester City (h)
28 Everton (a)

December

5 Blackburn Rovers (a)
12 Arsenal (h)
16 Wigan Athletic (h)
19 Portsmouth (a)
26 Wolverhampton Wanderers (h)
28 Aston Villa (a)

January

9 Tottenham Hotspur (h)
16 Stoke City (a)
26 Wolverhampton Wanderers (a)
30 Bolton Wanderers (h)

February

6 Everton (h)
9 Arsenal (a)
20 Manchester City (a)
27 Blackburn Rovers (h)

March

6 Wigan Athletic (a)
13 Portsmouth (h)
20 Manchester United (a)
27 Sunderland (h)

April

3 Birmingham City (a)
10 Fulham (h)
17 West Ham United (h)
24 Burnley (a)

May

1 Chelsea (h)
9 Hull City (a)

Markets at new highs

2009-07-16T09:51:00.001+08:00

As I write this blog, the markets around Asia are hitting new highs, higher than the June highs. KLCI is now at 1,120 while STI is also at a high of 2,432. Both markets should continue to edge higher in the medium term. KLCI should hit 1,160-1,170 and if we are lucky, the KLCI could even reach a high of 1,220. For the STI, it is likely to climb towards 2,640 levels. It is even possible for the index to hit 2,800-2,900 but it might be pushing it a bit. Nonetheless, both indices have a chance of riding on this strong wave upwards and rising to the higher end of the targeted range but it is still too early to confirm. We will have to wait and see if both indices can push past their initial targets. Happy Trading everyone coz this run could be the last run for a while. Once this run ends, the next fall will be a crash that will be an 'eye-opener'.

Back after a year out!

2009-07-15T10:02:00.002+08:00

1 year have just passed with a blink of an eye. What have I done during the past year? Nothing much... getting on with life. Work, sleep, eat - in that order and that pretty much sums up the year :). Holidays u asked? Have been thinking a lot bout it but not doing much to actually make it happen. Does life actually get 'worse' when you get older?

Anyway, I will try to update this blog once in a while just for fun.. will try to add more stuff rather than just markets. :) probably add my favourite passion - footie, the EPL and of course Liverpool! hmm, what else can I add? I dunno, will add as I go.. Think that's enough for now.. catch ya soon!

Quote: Hopefully being a year older = a year wiser :)

Today is the day - the bulls hit back!!!

2008-07-09T08:25:00.002+08:00

I believe that we may have found a bottom at 1,120 for the KLCI, or at least a temporary bottom. Over in the US, the DJI, SP500 and Nasdaq all appear to have found a bottom. In Europe, yesterday's looks a tad like a capitulation. With all these factors, going for the bulls, today could be the day the bulls hit back!! KLCI would like see a stronger rebound today. With the Futures markets in a deep discount, we could see a sharp rally to 'cover'. Investors may want to look at stocks with high beta - MRCB, Bursa comes to mind. I prefer the former as it has always been a 'trading' stock. Keep a good lookout!

Are things getting overly bearish?

2008-07-08T08:01:00.003+08:00

Yes I believe so. Fundamentally we are now trading near crisis levels. Should it be a screaming buy now? Yes, politically we are now in unchartered territory but opportunities like this don't come very often. Below is an article from the Singapore Business Times.

Business Times - 08 Jul 2008
Uncertain times in Malaysia

IF Malaysia's stock exchange were regarded a barometer of its economy, the country is headed for a mighty storm. Since January, the benchmark Composite Index of the Kuala Lumpur stock exchange has dropped around 22 per cent, one of the worst performances in the Asia-Pacific region. Much of the steepest falls came after March 8, a watershed date in the country's history when the ruling National Front coalition registered its worst-ever electoral showing.

Sadly, things appear to have taken a turn for the worse since then. Prime Minister Abdullah Ahmad Badawi has been attacked relentlessly by his predecessor Mahathir Mohamad who blames him for the Front's poor showing. In turn, Dr Mahathir himself is being attacked by a High Court judge for attempting to influence trial outcomes when he was in power.
And as if all this were not enough, a 23-year-old male aide claims that he was forcibly sodomised by the 61-year-old former deputy premier and de facto opposition leader Anwar Ibrahim, echoing an allegation made against Mr Anwar a decade ago for which he was tried and eventually absolved.

Adding to the tension are allegations that Najib Razak, the current Deputy Prime Minister, was involved with a Mongolian model whose murder is the subject of an on-going trial. Worse, the man who released his statutory declaration with the allegations, retracted them the next day and has since vanished with his family, raising more questions about this case.
Meanwhile, Mr Anwar has lodged a police report alleging corruption against the country's top police officer and its Attorney-General. The reports are being investigated by the country's Anti-Corruption Agency.

Then there are questions about the integrity of High Court appointments following the inquiry and report on the so-called Lingam tapes. Clearly then, Malaysia is in a political mess. Yet, despite the gloom in the stock market, the broader economy is doing relatively well: it remains a net oil exporter and is a leading producer of commodities from palm oil and rubber to gold and pepper, all of which are fetching high global prices. Exports remain buoyant, the country has a strong net reserve position and domestic demand remains surprisingly resilient.
But, make no mistake, continued political uncertainty will take an economic toll; investors will stay on the sidelines till the dust settles.

Mr Anwar claims that he has enough support within Umno, the dominant partner in the ruling coalition, to engineer a collapse of the government.
But this only adds to the uncertainty. Economic management is getting little attention. Left to drift, the situation will eventually erode Malaysia's economic, as well as social, foundations - a dangerous development.

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved

Is the KLCI index hitting a low?

2008-06-24T09:49:00.000+08:00

Is the index hitting a low? It appears to be building a base above the 1,188 support level. I think we should see a low this week, probably marginally lower then the 1,188 level - maybe 1,180 or so. Being a contrarian is akin to taking on high risks - so, investors who cannot or unwilling to take on such high risks ought to wait a while before getting. And for those who choose to get in, keep your stops tight - very tight.

Because there are too many stocks to buy and you don't know which is better, you might want to learn a bit more about trading futures. Trading the KLCI index futures (which is listed on Bursa) can offer certain oppotunities which stocks cannot offer - such as Leverage and shorting, where it is allowed in futures trading. Nevertheless, it is a double edge sword. You can make as much as the market gives you but you could also lose all in a blink of an eye.

Things are looking bearish here in Malaysia but...

2008-06-16T08:21:00.001+08:00

Everything are starting to look bearish right now. Even our Bank Negara's governor - Tan Sri Zeti Akhtar Aziz says that BNM may revise their GDP forecast for 2008 of 5-6%. She says that "Right now there is also a risk that we may have a slower growth and this is being experienced in the global economy, including the region." The general feel is definitely cautious with a slight twist of bearishness right now. I think that this is common within a Wave 4 correction or a Wave 5(ii) correction. I believe that we are in a Wave 5(ii) and once this is over, the KLCI could rally strongly to all time highs by the final quarter of this year. Stay tuned!

Everything is looking bearish but...

2008-06-11T09:22:00.002+08:00

Right now, everything is looking bearish... globally, everyone is facing high inflation. In the US, unemployment just rose and the word stagflation has begun spreading. However, it is still too early to confirm that the US is indeed in stagflation. Regionally, everyhting is also looking bleak. China's monetary tightening could squeeze the tight market even more. Coming back to our shores, Malaysia is now facing high political risk and 'possibly' high inflation. Everything and I mean Everything!!! are pointing to more bearishness ahead.

But wait, if everyone is hyper bearish, should we be contrarians and trade the other direction? There are still the element of risk if one should trade against the trend. Nevertheless, the returns do outweigh the risks, in my opinion. I believe that the KLCI index will find support around the 1,200-1,213 levels. The Hang Seng Index to find support around the 22,000-22,400 level. STI to find support at 2,945-3,006. Shanghai should hold around the 3,000 level, or slightly below. I still believe that the bull will be back sooner rather than later.. Will update again when the regional indices start to move upwards again.

Steel counters looking overbought...

2008-05-15T08:43:00.004+08:00

Steel counters on the KLSE are looking overbought and a temporary pullback is likely... Yesterday we saw a large surge in all steel stocks including the smaller ones like leader steel. Trading volume was also up suggesting that the uptrend has just started. However, do not be fooled. There is a good chance that yesterday was a buying climax - at least for the time being. There is no doubt that there is an uptrend but TRY NOT to jump in at this current lofty levels. Wait for a pullback maybe a better choice, in my opinion. Just my 2 cents. Trade cautiously.

Kinsteel - could ease to RN1.37-1.45. Lion Ind - could ease to RM2.30-2.50.

Also note that, steel prices could be on its final leg of its long term uptrend. Be forewarned that steel prices, as a matter of fact, all metal prices could peak sometime in 08/early09.

KLCI short term Wave count

2008-05-05T10:29:00.006+08:00

I believe that the KLCI is currently its Final Wave 5 rally towards the end of the year. The current count is that the index is in its Wave i of its final Wave 5. Where is the index within this Wave i? Here is a chart to show where the KLCI is right now and how I see it going in the coming week. We could see a rally back up to about 1,314-1,320 for Wave v in Wave 3. This count would be incorrect if the KLCI falls back to below 1,256 levels - the high of wave 3, i. (Source for the chart above: Bloomberg)

Losers with a capital L

2008-05-02T11:07:00.003+08:00

Here are some of the biggest trading losses ever reported in the media.

1. Nick Leeson and the downfall of Barings Bank. Leeson lost an estimated $1.4bn.
2. John Rusnak and the Yen. Rusnak lost an estimated $691m.
3. Yasuo Hamanaka aka Mr Copper. Hamanaka was a trader at Sumitomo Corp, losing S$2.6bn in copper trades
4. Jerome Kerviel and Societe Generale. He lost more than $7bn speculating in European futures.

Just like in the previous note, Losers begets losers, these so called 'superstars' were doing very well before disaster struck. When these traders started losing, they went out to look for ways to magnifying their bets and try to win back the losses. Apparently, luck has deserted them when they needed it the most.

My 2 cents - It was not that luck has deserted them. It was that they took on too much risk. To seek expectional returns one has to take on equally exceptional risks. There is no magic trick. Investors ought to play great defense and not great offense, i.e. one should manage risks and the returns will take care of themselves.

Losers beget losers

2008-04-30T10:16:00.002+08:00

Have any of you ever gone thru a period where you as a trader/investor have to take losses after losses. First, you take a trade and you find out that you made a mistake. So, the trade reaches your stop loss point and you cut your losses. You feel - unsatisfactory to say the least. You want to regain it as fast as possible. You then trade larger amounts/lots/contracts. In the end, you end up losing more. Is it down to luck? is it because you followed your broker's recommendation? NO!! It is all down to being disciplined and poor money management. You cannot blame anyone else but yourself.

I have just gone thru such a period. Losing is such a bad feeling but I guess everyone have to go thru such a period before one can learn (if one ever learns). Well, I have to just take it in stride as Bob Prechter says. Here's a part taken from Elliot Wave International's website - It's all about "Fives and Threes"

Here's how Bob Prechter, Elliott Wave International's founder and CEO, put it in his classic 1986 report, "What a Trader Really Needs to Be Successful":
"...my observation, after eleven years in the business, is that the biggest obstacle to successful speculation is the failure merely even to recognize and accept the simple fact that losses are part of the game, and that they must be accommodated. The perfect trading system does not exist. Expecting, or even hoping for, perfection is a guarantee of failure."

Trading is tough (very tough if u are a beginner), and don’t let anyone tell you otherwise. Don’t let them tell you all you need is a correct forecast, either. That is maybe 20% of your success, but you only realize that after you've traded for a while.

A tad more upside likely

2008-04-28T18:10:00.003+08:00

A tad more upside is likely for both the KLCI and STI. The KLCI could break the 1,300 mark again soon before reaching a peak around the 1,314-1,320 levels around early March. On the other hand, STI could continue to climb to about 3,265-3,330. I believe that the regional and global markets have found a bottom back in Mar. This rally (wave 1) would likely end around the second week of May. Wave 2 correction could take about a month. Then we could finally see the strong and bullish Wave 3 around June/July. Investors ought to look to buy stocks when this pullback occurs. This could be the last chance saloon before the BEAR sets in. So, traders and investors alike, ought to ride this final leg. This is going to be a wild ride and everyone is going to be SUPER BULLISH!!! So, when the time comes (i.e. newspapers and magazines says that the BULL is back, BEWARE!!!) - that could be the end of this final leg :)

Stay tuned!!! Good luck trading!

Interesting article on Bloomberg

2008-04-18T10:41:00.003+08:00

Leading Economic Indicators in U.S. Rose in March (Update2)
2008-04-17 10:42 (New York)

By Courtney Schlisserman
April 17 (Bloomberg) -- The index of leading U.S. economic indicators rose in March for the first time in six months as cash poured into the banking system and the Federal Reserve
lowered the benchmark interest rate.
The Conference Board's gauge increased 0.1 percent, as forecast, after falling 0.3 percent in February, the New York- based private research group said today. The measure points to
the direction of the economy over the next three to six months.
The improvement is a tentative signal that the economy, after deteriorating in the first six months of 2008, may not weaken further in the second half of the year. The report
indicates the Fed's rate reductions and efforts to ease the credit crisis may help mitigate the damage from the slump in subprime lending.
``We are flat to negative in the first half and we expect some of these elements of policy to kick in the second half and start to see some improvement,'' said Peter Kretzmer, a senior
economist at Bank of America Corp. in New York. ``But the uncertainties surrounding that forecast are certainly increasing.''
A report from the Philadelphia Fed, issued at the same time, showed manufacturing unexpectedly contracted at a faster pace in that region as measures of new orders and shipments dropped.

Economists Forecast
Economists forecast the leading index would rise 0.1 percent, after a previously reported 0.3 percent decline in February, according to the median of 55 projections in a Bloomberg News survey. Estimates ranged from a decline of 0.3 percent to a 0.4 percent gain.
The increase in last month's index brings the decline for the last six months to a 3.3 percent annual pace. A drop of 4.5 percent or more over six months usually correlates with a recession, according to economists at the Conference Board.
``While latest data do not support the assertion that we are in a recession, growth remains weak, a situation that may continue,'' Ken Goldstein, a Conference Board economist, said in
a statement.
Five of the 10 indicators in today's report contributed to the gain in the index, led by a jump in the money supply. Slower supplier deliveries, which indicate an increase in orders, and a
steeper yield curve were also positive.

Credit Markets
As credit markets seized up, the Fed on March 16 gave all primary dealers in U.S. government bonds the same access to loans formerly reserved only for banks. The central bank now auctions as much as $100 billion in funds a month, making it easier to liquidate some hard-to-sell assets. The yield curve, or the differential between the Fed's benchmark rate and the yield on the Treasury's 10-year note, also widened last month. The central bank dropped its target rate by three-quarters of a point to 2.25 percent on March 18, leading to a steeper curve.
The yield differential turned positive for the first time in February after 19 months of negative readings that subtracted from the leading index. The Fed has cut its benchmark rate by 3 percentage points since September, with two-thirds of reduction coming in the first three months of this year.
A report earlier this week indicated factory sales are improving this month, in contrast to today's Philadelphia report. The Fed Bank of New York said April 15 that its shipments index rose to 17.5, from minus 5.2 in March.

Recession Forecasts
The economy probably is in a recession, according to James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. Economists surveyed by Bloomberg News earlier this month projected growth in the first half of the year will come to a halt. A majority of those polled forecast the U.S. is, or will soon be, in a recession.
The Fed yesterday said economic growth slowed in nine of 12 districts since February, hurt by ``anemic'' real estate markets and a slowdown in consumer spending, according to its regional
business survey known as the Beige Book. Earlier today, the Labor Department said more Americans filed first-time jobless claims last week and the total number receiving benefits rose to the highest level in almost four years, a sign the labor market continues to weaken. The number of initial applications rose 17,000 to 372,000.
Claims were the biggest drag on the leading economic indicators index last month. They averaged 375,900 in March and subtracted 0.25 percentage point from today's gauge.
Negative Influences Other components that subtracted from the leading measure included decline in consumer expectations, stocks and building permits.
J.C. Penney Co. Chief Executive Myron Ullman said yesterday that the company will moderate its growth plans in the next year to cope with a ``consumer environment that's very hard to predict.''
The Conference Board's coincident index, which looks at real incomes, employment, industrial production and business sales, rose 0.1 percent in March. The gauge declined in two of the prior four months. The measures are among those tracked by the National Bureau of Economic Research in determining whether a recession has begun.

US Dollar on its final leg downwards

2008-04-17T08:52:00.003+08:00

US Dollar (USD) has hit its all time low last night against the Euro. So, expect more downside for the USD in the near term. However, over the longer term, I believe that the USD is on its final 5th wave down. The 5th wave is the terminal wave for its rally/decline. After this wave is done, I see the USD rebounding strongly.

How would this affect the equities? I believe that the stronger USD would help lift the US market out of its doldrum, even if it is only for a 2-6month period. And if Wall St climbs, regional markets around Asia would also follow suit. I see positive signs for the global equities market in the short 2-6month period.

Critical week

2008-04-07T11:12:00.002+08:00

This is a critical week for global indices... I believe that we may have seen the bottom for most global indices in March. All of the indices have rallied from the March lows. Right now, the bulls are fighting to regain the upper hand. Most indices are fighting to regain the 100-day SMA and 200-day SMAs. Breaching these levels usually means that it is bullish or bearish in the medium term. Breaking above these levels would signal that the medium term uptrend has resumed while breaking below these levels would signal more downside in the medium term. Right now, all are on the verge of breaching 'above' and hence it could be very positive. However, looking at the short term momentum - the breach is unlike to happen just yet.. global indices may pullback a tad before it can rally past these difficult resistances. So, be prepared for a pullback.

Asia to decouple from US this week?

2008-03-31T08:50:00.003+08:00

Over in the US, the markets appear that they may still undergo more consolidation while the Asian counterparts seem to have bottomed out and ready to rally.

I believe that the Shanghai market has just bottomed last Friday and has the potential to lead the Asian market higher. Hang Seng would likely be the co-leader. I still like Singapore but Malaysia could lag a little due to its uncertain political cloud. Also, I believe that the plantation sectors has peaked. So, the upside for these stocks would underperformed against the rest of the other sectors. 30% of the KLCI is now made up of plantation counters, and this would likely keep a lid on the upside for the KLCI. Nevertheless, Malaysia could continue on its rally to close the gap at 1263-1283. With a little bit of luck, it could possibly hit 1,296 as well this week.

STI could continue to head to 3,150 before rising to test the 3,268 level again. Banks and property are the sectors that I like. I also like the S-shares traded on the SGX. C&G Industrial, and China XLX are a couple that I like although China XLX has moved up quite a bit.

Stock Exchanges in demand?

2008-03-26T08:21:00.004+08:00

Yeay!! All markets seem to have reversed their downtrend... STI, KLCI, Dow, S&P. Hang Seng is about to breakout of its downtrend channel.. So, watch for it either today or tomorrow.. STI could reach as high 3,300 but the immediate target is 3,150. KLCI could reach 1,250 first but it could reach as high as 1,304 next.

Since most of the countries' markets are starting to pick up again, it may wise to look at the listed stock exchanges.. I like Bursa Malaysia and Singapore Stock Exchange as well as the Hong Kong Stock Exchange. I believe all three are strong buys now as all have hit their strong support levels. For those who prefer to take on a bit more risk, one may want to look at their call warrants.. Even so, always make sure you know the exercise price of the warrant.

Singapore Banks to fly!!!

2008-03-25T08:58:00.003+08:00

I believe Singapore Banks will fly today!!! DBS, OCBC and UOB could rally hard from here. They make up of about 31% of the STI. With the STI breakout yesterday, the index could be heading towards the 3,150, followed by 3,268 level. So, there banks would likely lead the way. DBS and UOB have a long term target (6-12months) of S$25. OCBC is about S$10.50. For more adventurous investors, one might want to take a look at the call warrants which has lower exercise price.

For Malaysian who want exposure to the Spore Banks, only DBS has a call warrant listed on Bursa. It is quite attractive too as its exercise price is only at S$18.20.

When times are the most bearish....

2008-03-22T17:33:00.002+08:00

Globally, there is talk that the whole global financial market is on the verge of collapse... Depression (which is worse than ressession) is being mentioned all over the the papers, magazines and tabloids... the world is as if it is going to come to an end...

hmm, i smell the bulls are ready to kick back strongly soon... When times are the most bearish, it is time to BUY!!!! We may have seen the worse in this past couple of weeks... especially in the Malaysia where the index saw the largest 1-day fall in a decade...

Technically, global indices may have corrected abt 38% of the large Wave 3. The a-b-c correction on the S&P500, Hang Seng, Malaysia, STI... it is time to go into the market now!! there may be volatility ahead in the next few weeks, but i believe that the trend is about to change!!!!

Malaysia - i like stocks that have been bashed down with good fundamentals - Kencana, Gamuda (for trading), Tenaga.

Spore - i like the banks, and property counters like Capitaland, Banyan Tree, Tat Hong and their call warrants... just becareful with the call warrants on its expiry and exercise price.

Tides are turning again

2008-02-29T08:34:00.002+08:00

As you know, I have been saying that there is another leg upwards ages ago... this up leg has yet to take place and it should have taken place by now... I am now revising the call without this up-leg.

Dow - the up leg appears to have been stopped by its 50-day SMA. There is still a small chance that it could reach 12,900. Nevertheless, I expect more downside from here or from 12,900. This bounce is likely over... if you are waiting to buy, best to wait a while longer... maybe up to end of April...

STI - 3,268 appears less likely... get ready for the fall towards the 2,746 level again

KLCI - a break of the Jan low of 1,340... it could fall further to 1,280-1,289 next.

Best to stay away if you want to buy the market... If you are willing to short the market, there are opportunities.. Pls note that - Shorting is not allowed in certain markets. Shorting is also dangerous and should only do so if the available excess cash.

Outlook for the Dow and the rest

2008-02-22T08:36:00.003+08:00

DOW is currently fininshing its b-wave triangle. It should continue to rally for the c-wave correction soon. I am looking at the 12,900 levels for this c-wave.

STI - Similar point of view. 3,268 is the level that I have for the STI c-wave.

KLCI - Should continue to ease to about 1,275-1,285 before rebounding to retest 1,420-1,432.

Sunway Holdings (4308) - Trading opportunity

2008-02-22T08:27:00.002+08:00

In a StarBiz report today, Sunway Holdings was awarded the sub-contract works by MEB Construction Sdn Bhd to construct and complete the privatisation of the South Klang Valley Expressway for RM264m. Construction would take 19 months plus an additional two months for testing and commissioning.

Technically, the stock posted a hammer candle yesterday. It hit a low of RM1.12 before closing marginally higher at RM1.23. On the longer term chart, the stock also tested its breakout support level. This may be a good level to get for both the short and long term.

Investment strategy (for illustration purposes only): - Buy 10 lots of Sunway or its warrant-B (should be able to buy more warrants - for leverage). Cut loss point for Sunway, is RM1.11. The ST upside target is RM1.40-1.45. LT target points to RM1.70-1.78, its 100-day SMA. When the stock reached the ST target, take profits on 5 lots and raise the stop loss point to breakeven point of RM1.26-1.27. Hold the rest until the next target or is stopped out at the higher stop loss point, whichever comes first.

No change in outlook

2008-02-14T08:31:00.002+08:00

I still think there is one more leg up for Dow, STI and KLCI. This rebound should last till about end of the month before another round of selling takes place.

Do not be too 'gung ho' in buying the rising markets now. Things have not change in the longer term. However there are a few stock that are worth looking at right now.

In Singapore, I believe that there is room on the upside for property counters such as Allgreen, City, Singapore Land, and Capitaland. There are divergences on its MACD which could see these stocks rally a decent 5-10% from here.

In Malaysia, the plantation counters remain in the spotlight. Property counters in Malaysia may also rebound together with regional property players.

Happy Chinese New Year!!

2008-02-06T08:32:00.000+08:00

Happy New Year!! Gong Xi Fa Cai!!! Gong Xi, Gong Xi!!!

Here is to wishing everyone a Happy and Prosperous New Year!!! Hopefully, the year of the rat is going to be as good as 2007. Happy Trading everyone!!

Regards,
Shooting Star

C-Wave up

2008-02-04T08:35:00.000+08:00

US markets posted a biggest weekly gain in 5 years last week. Banks, builders and retailers helped lead gains. The Dow is expected to climb to test the12,900-13,100 level. It is a bit difficult to see right now if that level would break. I still believe that there is somemore downside to come from those levels. Best, I believe that it would be to take profits or cut losses around those levels.

STI could rebound this week to 3,268 followed by 3,325.

KLCI to rise to test 1,417-1,420 followed by 1,435. SapuraCrest or its warrant looks interesting today. It could run as it has a very high beta to the market. The stop loss for SapuraCrest is RM1.45. The upside target is RM1.90. So, it is a tradable option for this short run. :)

C-Wave up is on the way

2008-01-30T08:31:00.001+08:00

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

2008-01-29T08:19:00.000+08:00

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

2008-01-28T08:28:00.000+08:00

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

2008-01-25T08:39:00.000+08:00

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!!

2008-01-22T08:40:00.000+08:00

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

2008-01-18T08:29:00.000+08:00

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

2008-01-17T08:37:00.000+08:00

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

2008-01-16T11:34:00.001+08:00

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

2008-01-15T08:48:00.000+08:00

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

2008-01-14T08:37:00.000+08:00

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?

2008-01-11T10:08:00.000+08:00

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

2008-01-07T08:28:00.001+08:00

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

2008-01-04T08:38:00.000+08:00

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

2008-01-04T08:25:00.000+08:00

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)

2008-01-03T08:45:00.000+08:00

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

2008-01-03T08:35:00.001+08:00

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

2008-01-03T08:18:00.000+08:00

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

2008-01-02T08:47:00.000+08:00

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.

Happy New Year!!!

2007-12-31T08:39:00.000+08:00

Cheers to all!!! Happy New Year and hopefully, 2008 would be a fruitful one!

Market-wise, 2008 should be a good year, at least in the 1st half, based on technical analysis. The US markets (Dow and S&P) and European markets (Dax and FTSE) are forming a 4th wave consolidation triangle. There should be a final 5th wave in the coming weeks, probably in starting the middle of Jan. This should be a very good and tradeable bull rally.

As for Asia, the 5th wave has likely started. The 3rd of the 5th wave is expected to be very bullish. This 3rd would likely coincide with the breakout of the triangles of US and Europe.

So, a strong rally should take place sometime in Jan/Feb... Investors may want to continue to buy on dips... Stay with the uptrend...

Merry Christmas!!

2007-12-24T08:14:00.000+08:00

Merry Christmas and Happy Holidays to all!! :)

Tech Stocks - look out for it!!! It appears that the tide is starting to turn. All the subprime issues and recession concerns in the US is starting to have little or no impact on the stock market. The recovery story could be on the way. This could be the start of a new rally into 2008!!

KLCI and STI also has been holding well.. Both support at 1,380 and 3,300 respectively held on very well indeed. Start looking for laggards.. the 1st round of rally is usually led by the blue chips! The the second liners would rally before finally the penny stocks.

The 1st half of 2008 is expected to be very very good!!! BE FOREWARNED!!! :D

Happy Trading into the new year!

Back at work!

2007-12-19T07:52:00.000+08:00

Wow... it has been quite a break.. anyway, back to the markets...

The US markets.. hmm.. it fell into place just like what I mentioned back in Nov... It reached the 13,600-13,750 levels before easing. It could now continue to ease to 12,800-12,900, which is the good support for the BULLS. There are 2 scenarios for the Dow and S&P. It seems to be forming a triangle now but a sideways rectangular pattern could also take place. Both are continuation patterns. Hence, the BULL is still intact as long as the Dow stays above the August and Nov lows i.e. 12,500-12,600. Keep a sharp eye on those levels. Last night, the US markets rebounded slightly. Continue to expect a little more downside from here...

STI... is finding some support around current levels, the Nov lows. Indicators still point to lower levels from here.. probably finding its footing around the 3,200 support.. similarly, as long as the index stays above that level, the BULL is still very much alive..

KLCI... 1,380 is the current support level.. should hold here for a couple of days... then it all depends on external factors.. technically, it has yet to see a turnaround sign... so, expect selling pressure to persist for now... however, there are some pretty good looking stocks on the charts... Silver (7136) could run soon.. however, keep a stop at RM0.90 or slightly below.. another stock is MPHB.. stop should be at RM1.95.. Both have more than decent chance of rising in the coming months despite the gloomy immediate outlook for the index.. trade cautiously is still the main idea here...

On a break!

2007-11-30T09:58:00.000+08:00

I am going on a break for a couple of weeks. I will try to leave a rough outlook of the markets ahead.

Dow - approx 13,600-13,750 critical resistance level. Chances are, it would likely ease after reaching that level. It could fall back to test 13,000 or lower. This is due to the Dow Theory Sell signal.

STI - could rally straight from here. We could see a decoupling from the US in 2008. But (to be on the conservative side), I would take a same view for now. Meaning that STI could retrace a bit after hitting 3,650-3,700. Only after the retracement is over, then it should rally all the way into 2008.

KLCI - take a similar view. Bullish on the longer term. Pullback after hitting 1,405-1,410. Then it should rally hard into new highs of 1,490-1,560 next into 1Q 2008.

Asean strategy - Buy into dips. Look out for the lower liners coz they are going to be the star this time round!! Remember 1993-1994. :)

Here we go!!!

2007-11-29T08:26:00.000+08:00

There was a slight doubt about the BULL when the Dow fell below its 12,845 level and suggested a Dow Theory Sell signal. However, it has rebounded sharp for the past couple of days. Wall St posted the biggest two-day rally in five years, led by financial shares, after Federal
Reserve Vice Chairman Donald Kohn buttressed expectations for another interest rate cut. The Dow rallied 331pts while S&P500 added 40pts. European shares also rallied the most in 4 1/2 years.

Two days ago, I posted that there could be a possible bottom for the STI. And I believe that this rally on Wall St could kick start the new rally in stocks over in Spore. Investors looking for fundamental stock ought to look at the property and construction sector. Stocks like Tat Hong for construction and Hobee, Capitaland, and Wing Tai for property. Sesdaq counters also look attractive now. Alantac is interesting now.

Malaysian stocks to look at - the foreign Call warrants look very attractive. HSI-C1, SInopec-Cs, and CNOOC-C1.. These are looking attractive even though they expire soon. The underlying shares listed in HK looks very interesting too. Hence, any movement in the underlying would probably lead to higher price here in the Call Warrants.

Currrent levels are good levels to get in - trading wise. Buy now..

Selling to end?

2007-11-27T10:21:00.000+08:00

The S&P500 could be doing a 3-3-5 flat Corrective Wave 4. I think the selling would likely end soon. Yesterday's fall could be close to the end and the only risk to this count is that volume is not sufficient. In other words, there is no selling climax yesterday. Nevertheless, I am stick to my view that the US market could bottom out soon. Give it a couple or more days. Dow could find support around 12,600 while S&P holding above its LT uptrend support. A break below would likely signal the start of a weaker trend in the short term.

Could STI downfall coming to an end? There is a strong possibility that the low is around the corner. Whenever the RSI fell below its 30 pts mark or in the oversold region, the STI usually found a ST bottom. Could this round be the same? I believe so coz it is also holding above its 62% Fibo levels of 3,322. Maintain buy on weakness.

For KLCI, there is no change in view. It should track regional markets accordingly. Strong support is at 1,340 while resistance is at RM1,365.

Waiting for a turnaround signal

2007-11-26T08:31:00.000+08:00

Wall St rebounded on Friday but on relatively low volume. Pls do not read too much into the bounce. I am still waiting for any signs of a turnaround in the US markets. That should lift global markets. (In the immediate term) There could be a possible positive rebound on the US Dollar which could in turn be positive for the US stocks. Again, the Dow looks like a huge sideways formation trading between 12,500 and 14,100. Look for a turnaround the support levels of 12,800-12,845 and 12,500-12,600.

STI held its 62% Fibo level - 3,322 last week. A positive sign. Its RSI is also lingering in the oversold region. On the past 2 occasions, whenever the RSI fell below the 30pts mark, the index actually bottomed out. Could this be a bottom here? I think so. Again, this is only a risk analysis. Buying and selling will depend on your own risk tolerance. I believe that HG Metal looks interesting on the charts. It is now trading at S$0.49. Put a stop at S$0.42.

KLCI could find a bottom with the 100-day SMA (1,340) supporting the index. This level should keep the index afloat for now. Keep a look out on the call warrants. HSI-C1, C2, C3 looks interesting. CNOOC-C1 is also on the rise. Sinopec-C1 is another to look out for. Any rise in the index would see these call warrants rally hard.

To find its feet

2007-11-23T08:15:00.000+08:00

Wall St was closed last night on Thanksgiving. Happy Thanksgiving!! Usually, Thanksgiving week, is bullish for equities but definitely not this year. Dow is now below its 12,845 level suggesting that the Dow Theory Sell signal is in. Just becareful. I still believe that a tradable rally is coming but it will probably a rebound in a bigger picture now that the Dow Theory Sell signal is in play.

STI should also find its bottom soon. The 61.8% fibo did not hold either. Possibly giving up all its gains since Aug if the index do not find its feet soon. The low then was 2,962, which is close to its 3,000 psychological support.

KLCI is also looking weak. It is holding just above its 100-day SMA at 1,340. More weakness to follow should this level give way. A wait and see approach is best for now.

The BULL is not dead yet, probably just delayed now that the Dow Theory Sell Signal is in play.

The bull to take a back seat?

2007-11-22T08:27:00.000+08:00

The S&P500 gave up all its gains this year after last night's fall. Concerns of losses from mortgage defaults have spread throughout the economy sent stocks on Wall St plunging. American Express fell to its 14 month low after Morgan Stanley recommended investors to sell the stock. The Dow is now below its critical level of 12,840, which could mean the delay in the arrival of the BULL. The Dow Theory Sell signal seems to be in place. The last time it occured in 1999, the Dow fell about 30% from its high. It means that it has a long way to go - down. Nevertheless, if Dow recovers to regain the 12840 this week, then we might avoid this bearish scenario. Keeping the fingers crossed.

STI and KLCI would likely see further selling today on the back of Wall St's plunge. KLCI to find support at 1,340 (100day SMA). If the index stays above the this support, then the Bull upcoming run is still intact. For STI, the 3,322 support needs to hold in order for the BULL to continue in the next couple of weeks. The next support is at 3,180 followed by 3,000. With Dow in such a precarious position, it may be better to cut some losses first before getting in again sometime in the near future. Otherwise, investors could hold on until the end of the week to see if both the supports hold.

Has the bull started?

2007-11-21T08:43:00.000+08:00

Well, it is still too early to confirm right now. Dow is still hanging just above the critical 12,845.87 level. I have used the 12,840 level as a last ditch support. Last night, the Wall St rebounded. Dow is now back above the 13,000 level. Nasdaq is likely to have 1 more leg down before it can turnaround. Nevertheless, 2008 is going to be another exceptional year.

For Asian markets, the money would likely flow out of US and into Asian markets be it property or equity. HSI and Shanghai is expected to be the leaders this time round. I have heard stories that HSI could even hit a high of 40,000. That did not surprised me at all as I think it is very much possible. So, get ready for the bull.

STI is also looking bullish in the long run. Though the short term mechanics are starting to show. Yesterday's bullish long white candle is supportive. The rebound from its 61.8% of 3,322 is a very good sign. Continue to accumulate on weakness. I like Broadway Industrial and Midsouth Holdings. Both stocks are looking good fundamentally and technically.

KLCI also fell to its next support at 1,360-1,365 after falling below the 1,380 level. Accmulate between these levels. I see smaller construction companies starting to move. Crest Builder is one, trading a 5x PE. It also broke out of its consolidation pattern. Salcon is also a single digit PE and a breakout could take place soon. According to Bloomberg, analyst has target prices for Salcon at RM1.70-1.80. Faber is also moving.

This week's outlook

2007-11-19T08:11:00.000+08:00

According to Bloomberg news, U.S. stocks posted their first weekly gain this month after investors speculated that the worst of Wall Street's mortgage losses have been disclosed and Wal-Mart Stores Inc. boosted its earnings forecast. The S&P 500 added 0.4% this week to 1,458.74. The Dow Jones Industrial Average rose 1% to 13,176.79, and the Nasdaq Composite Index gained 0.4% to 2,637.24.

Homebuilders and banks may face further declines this week. Economists expect reports to show U.S. housing starts fell to a 14-year low in October, signaling the real-estate slump will
continue to weigh on growth. Is this going to be the final leg down before the BULL arrives? Maybe. It all depends on Dow's performance this week. Can it hold its support at 12,840-12,878?

STI is back down to its 50% Fibo support at 3,434. Its 62% Fibo is at 3,322. The strategy for the Spore market is to nibble between these levels. Longer term, I am looking at 4,022 at least.

KLCI should find support around the 1,366-1,380. Similarly, the strategy is to pick up good stocks between these levels. Longer term, I am looking at 1,490.

Magnum (3735) - Privatisation - True or False?

2007-11-16T08:28:00.000+08:00

Both Multi-Purpose Holdings (MPHB) and Magnum Corporation (Magnum) replied (in Bursa Malaysia website) that both companies - "constantly review options to increase shareholder value. In pursuit of this objective, MPHB and Magnum will continue to evaluate all opportunities which may be available." - when queried by Bursa over a media report on expectations of Magnum being taken private by MPHB. They also added that an appropriate announcement will be made should there be any definitive corporate development.

Airasia - News 2

2007-11-16T08:23:00.000+08:00

In the Star today, AirAsia said the popular period of travel was January and March while the top-selling destinations including Kota Kinabalu, Kuching, Langkawi, Shenzen, Bali and Bangkok.
AirAsia offered 400,000 specially-priced tickets and has successfully led to a surge in bookings. AirAsia-X tickets to the Gold Coast in Australia are also being snapped up. The travel period was fixed from Jan 8 to April 30, but tickets must be booked before Nov 25.

Time for a holiday? Yes, it is good to take a break from the markets once in a while. Come back recharged and I believe is the way to go!! :)

Enjoy your Holidays!!

To test critical level

2007-11-16T07:51:00.000+08:00

Wall Street falls for the 2nd day in a row last night after the sharp rebound on Tuesday night. Dow lost another 121pts while the Nasdaq lost 26pts. This 'should' be the final leg down for the Dow. This final leg could send the Dow lower towards the 12,900 level again or slightly lower. Only a break (and close) below 12,840 would signal a (rare) Dow Theory Sell signal which last happened in 1999. If the level is not breached, then there is a very good chance that this downtrend is over. And the bull run should start then, which could rally all the way into 2008. So, be prepared and keep a sharp eye on the 12,840.

STI should continue to find support above the 3,434 level, which is the 50% Fibonacci retracement level, followed by 3,322, its 62% Fibo level. Investors should start to buy between those levels.

For the KLCI, the index continued to find support above the 1,380 level. Yesterday's inside day suggest indecision among investors. However, I believe that the uptrend rally is bout to take place, possibly next week. Investors should start buying whenever the index eases towards the 1,370-1,380 level.

Just keep an eye on the Dow. If Dow breaks the critical level, then my count could be wrong. If Dow holds steady, then I believe that the low is in and a rally could take place next. Having said all that, even if the Dow breaks the critical level, I still believe that the BIG Bull would come, probably delayed by a couple to 6 months. :) So, let'e hope it doesn't.

Same quote:- Do not miss this BULL RUN!!! It is going to be BIG!! Very BIG!!! :)

Dow retraces

2007-11-15T08:43:00.001+08:00

Dow fell 76pts after surging 319pts the previous day. Hence a minor correction is not unexpected. Nevertheless, I think there will be a small pullback from here to complete this downtrend, may be another fall to 12,900-13,000 region (or thereabouts). Investors should get ready for the upcoming Bull run. I do not know what is the catalyst for this upcoming bull run, but I believe it is still going to happen. We are in a Major Bull Cycle which is 'expected' to end in 2008/2009. So, there is still room on the upside.

STI should still find support at 3,434-3,500 levels. Investors should buy on dips. Similarly for the KLCI, the 1,370-1,380 would likely be a good level to get in. Do note that Synergy Drive is expected to be listed sometime in Nov (can't quite remember when - could be next week). It will be the largest capitalised stock on Bursa Malaysia. I believe this would likely give the Malaysian market the kick it needs to move on higher above the 1,400 level.

Lower to buy!!

Magnum (3735) - to be sold or privatised?

2007-11-14T11:13:00.000+08:00

There is a rumour running in the market that Magnum (3735) is about to be taken private or likely be sold by its parent MPHB (3859) at a selling price of RM3.80. Magnum and MPHB ran up yesterday and is expected to continue to run today. Magnum also recently announced that the company wants to raise RM800mil cash to provide the group and its subsidiaries with additional funds to finance their working capital and for acquisitions.

Based on technical, MPHB looks the better bet. On a fundamental basis, MPHB would also be the likely winner as 'the sale' could boost the coffers of MPHB. MPHB could potentially return the excess cash to shareholders via a special dividend :). Since both analysis 'appears' to favour MPHB, it could be better to look into MPHB. For those who prefer to leverage, pls look into MPHB-WB.

Wall Street rebounds

2007-11-14T08:50:00.000+08:00

The US markets rebounded sharply as expected. US stocks climbed the most in 2 months
after Wal-Mart Stores Inc.'s profit beat analysts' estimates and Goldman Sachs Group Inc. said it doesn't plan any significant writedowns on mortgage-related assets. Tech stocks like Apple also surged. Apple led the Nasdaq Composite Index to its biggest gain in four years after China Mobile Ltd. said it's in talks to sell the iPhone in China. Dow surged 319pts while Nasdaq 90.

STI touched its 50% fibonacci retracement at 3,434 yesterday and rebounded. This could be the low for STI. A new rally to new highs is likely to take place very soon.

KLCI support at 1,380 appears to be strong. Bulls seem to be buying strongly whenever the stock fell below the support.

I think these are good levels to get into S'pore and M'sia stocks. Even for the conservative investors. Do not miss this BULL run! It comes only once in a blue moon (well 13-14years to be exact). Happy trading!

Mah Sing (8583) - a new investor?

2007-11-13T08:54:00.000+08:00

A consortium of Middle East, a Malaysian blue-chip institutional and individual investors are eyeing a strategic stake in Mah Sing Group, according to Business Times' sources. Partnering with the current major shareholders and management of Mah Sing will likely be the vehicle of choice for the investors' Southeast Asian expansion plans. The deal would likely be different to which Middle East investors recently bought into Putrajaya Perdana and Loh & Loh Corp. With this tie-up of the consortium of investors in Mah Sing (if it comes through), the company's ability to grow further locally, regionally and in the Middle East is set to be very good.

My 2 cents - it should be very positive for Mah Sing if this is true. They could even have a bigger share of the IDR if the potential investors turned out to be the same ones as the ones who plans to invest a big chunk in IDR. Even without that, the group's business has been very good in the past couple of years. It is rumoured that they are close to securing enblock sales of its properties, both commercial and residential.

Dow reaching target

2007-11-13T08:40:00.000+08:00

Wall St continued to fall yesterday led by oil and metal producers. Worries that economic growth could slow due to rising oil and commodities prices. Tech stocks such as Google posted the worst 4-day slide in its history. E*Trade tumbled 59% after the company said that its earnings fell short of forecast. Citigroup went as far as saying that the company could go bankrupt. Apple also lost 7%.

Now with Dow close to the 12,900 level, there could be a potential minor rebound in the coming days. Nevertheless, selling pressure is still present in both Dow and Nasdaq. Now, we may have to wait and see if the market eases lower to retest the Aug low. If Dow breaches the Aug low, we could have a Dow Theory Sell signal, which is very rare.

STI's gap support held well. Yesterday's hammer candle is bullish but it needs further confirmation. Maintain a wait and see for the light pocketed investors while deep pocket investors should start to nibble. Gap support 3,470-3,520. Resistance at 3,600 followed by 3,660-3,688.

KLCI is also holding above its last week's support of 1,380. A break (and close) below the support would signal the start of an immediate term downtrend. Note: the longer term outlook is still very bullish. Aggressive investors should start to buy now just above the 1,380 support. Conservative ones should wait a while longer.

Wall St plunges further!

2007-11-12T08:35:00.000+08:00

As I mentioned before, the US markets has not bottom and the final wave of selling was ready to kick in. It appears to be happening now. Where is the bottom? I am looking at12,900 levels for the Dow. However, should the index fall below the Aug lows, then we have a Dow Theory Sell signal. So be careful.. For now, stand aside. Wait for clearer signs before jumping in. The bulls should have sharpened their blades by now and just waiting for the right moment.

ST- more downside expected. Could be sharp but is expected to be short. Target 12,900 for now.
LT- Big bull is coming after this consolidation - no matter how sharp it is..

STI could find support at the gap of 3,460-3,520. LT uptrend is still intact.
KLCI to find support at 1,380 again. Looks the strongest among its regional peers.

Nevertheless, buyers in both markets ought to wait. Only investors with deep pockets can start to nibble and average lower should the market continue to fall. Be prepared for the next bull run!! It is going to be a good one but it would likely be the last. The next bull could take place 14yrs down.

"You've been warned!!" :)

Sellers to the fore!!

2007-11-09T08:36:00.000+08:00

Wall Street continued on its downward pullback as expected :). This time it was the Nasdaq that fell sharply after outperforming the Dow and S&P in the past month or so. Nasdaq took another day of pummeling after Cisco fell 9.5% due to the fall in demand for its products from its top25 customers. The late nibbling in banking and financial stocks lifted the Dow from its lows. Dow ended 33pts lower while S&P500 was down 0.85pts. Nasdaq lost 1.9%.

STI should continue to ease due to its weakness in Wednesday's closing. The 3,660 support is unlikely to hold out today. The next support is at 3,550 thereabouts.

For the KLCI, Wednesday's strong close is baffling to me. Based on the charts alone, the uptrend is still very much intact. However, I believe weakness in the regional markets will keep a lid on its rise. I think there could be a correction or at least a pullback in line with its regional peers. I am looking to see if the 1,380 support breaks this time round. Upside resistance is at 1,440.

Airasia - News

2007-11-07T08:53:00.000+08:00

In the Edge Financial Daily, Malaysia and Singapore are expected to sign a bilateral agreement by end November that will allow AirAsia and Tiger Airways to fly twice daily each between Kuala Lumpur and Singapore, said Malaysia’s Transport Minister.

Good for consumers and Airasia. Bad for MAS or SIA? Not really, coz it is only 2 flights a day - hence minimal impact. But it is a start. Oil prices should also keep a lid on the share price of MAS and SIA as well as Airasia.

Minor rebound to resume

2007-11-07T08:37:00.000+08:00

Dow rebounded 117pts to 13,660 while S&P500 added 18 to 1,520. Dow appears to have formed a head & shoulder formation with a neckline at 13,450. A break below this level would definitely increace the chance of the index hitting the targeted 12,900 level.

STI and KLCI shld rebound further today. STI could test 3,700-3,722 level while KLCI could test 1,394-1,400 again. Nevertheless, investors ought to stay vigilant when trading in these volatile markets. Again the plantation and the smaller cappers would do well today.

A little reprieve

2007-11-06T08:34:00.000+08:00

Dow recovered last night to end the day at 13,543, down 52pts while the broader S&P500 shed 7pts to 1,502. The Dow fell sharply throughout the day after Citigroup Inc. said it will report as much as $11 billion in additional writedowns. Financial stocks such as securities firms also dropped. Dow 'should' continue to ease to around 12,900 or at least that is what I expect.

STI held the 3,660 support yesterday but KLCI fell below the 1,388 support. However, the Hang Seng is expected to fall further in the coming days. Since HSI has been the leader in the current rise, a fall in HSI would likely affect both market here. It may try to rebound today after 3 days of selldowns. So, both the KLCI and STI could rebound today. Do note that the sellers appears to hv the edge in the short term. I expect more selling to take place in the coming days.

PJ Bumi (7163) - New investor

2007-11-05T08:57:00.000+08:00

CIMB wrote based on the news in the Edge Weekly - A Saudi Arabian investor is making an entry into Second Boarder, PJ Bumi, in an exercise that will see the departure of its founder Tan Sri Ahmad Johan. According to sources, the Saudi Arabian company is buying into PJ Bumi to tap its waste and waste-water engineerging expertise, which it hopes to take back to the Middle East.

Technically, the stock is expected to rally further after breaking out of its LT sideways trend last Friday. Leave a stop at RM0.53 and the 6-month target is RM0.92 based on the height of its LT trading band.

Volatile markets ahead

2007-11-05T08:51:00.000+08:00

Expect more volatility in the markets this week. Dow lost 97pts on Friday morning before recovering to close up 27pts. The Dow should continue to ease in the coming days this week. I am looking at about 12,900 for the Dow. The usual suspect - financial stocks would likely send the Dow lower as I expect more bad news related to the subprime thingy. The odds a market crash (i.e. a fall of about 10% or more) has increased. So, be careful.

Both the KLCI and STI would likely trade sideways for now until a breakout on either side. However, the onus in on the downside this week. KLCI is expected to trade within 1,388-1,425 while STI to trade between 3,660-3,850. Be careful when trading this week.

Wall St tumbles

2007-11-02T08:24:00.000+08:00

Wall St fell sharply after banks fell the most in 5 years. The subprime worries has hit again. The Dow lost 362pts while the S&P500 gave up a hefty 40pts. The fall yesterday erased about $369 billion of market value from the benchmark for the American equities. We should continue to see more downside from here. Having said that, I do not expect a straight line drop but I think it would likely be very volatile. It could swing up another 150pts in between the fall again. (Well, I hope you guys get what I mean). I would likely be a yo-yo market with the larger picture trend is down. 12,900-13,000 could be the target for this downtrend.

KLCI yesterday closed near the low, which for the immediate time frame is bearish. So did the STI. Both could hv actually formed a rounded top but it needs confirmation. KLCI should ease to retest the 1,392 after failing to breach the 1,425 resistance. STI could head back to retest the strong support at 3,660-3,688. The upside resistance for STI is at 3,850.

Dow's outlook stays the same

2007-10-31T08:44:00.000+08:00

After looking through the charts, I am still keeping to my call on Dow (see Weds 24 Oct note). We are currently in a wave 5 in a larger Wave C down. There is a possibility of a sharp fall on the Dow as one of my indicator is very bearish. How will it pan out? Wait and see :)

Once this fall is over, the bull should be back. This wave count would likely be wrong if the market continues to rally past its old high of 14,198. This would mean that the bull has already started and this down is a Wave 2 correction rather than Wave C. I feel that the former has a slight edge or a 55:45 ratio.

Will the Asian markets buck this downtrend? It is too early to say but I think it could. The KLCI has been lagging the regional market while the STI has yet to show any negative signs that a top is in. Both indices are still on a ST, MT and LT uptrend.

Today, more profit taking is expected. Nevertheless, the trend still has not change. Stay long but trade cautiously.

CI Holdings (2828) or its warrant (2828WA)

2007-10-30T19:15:00.000+08:00

CI Holdings closed at its 4-year high today at RM1.12. This suggest that the stock's buying momentum is strong. I expect more upside from the stock tomorrow. Technically, the stock broke out of its reverse Head & Shoulder neckline resistance yesterday. The reverse H&S has a target of RM1.92. This is a long term target.

CIMB wrote about the stock today - called "Expect a Bubbly start." CIMB expects the stock to post a 67% rise in 1Q earnings year-on-year. If they do that, it would be their 5th consecutive quarterly profits after years of losses. This could be a turnaround story. CIMB has a BUY call with a target of RM1.42 based on a PE of 15x.

KLCI to rally further

2007-10-30T08:36:00.000+08:00

KLCI is expected to rally further even after yesterday's gains. The positive close on Wall Street is also another 'positive'. There is a lot of upside potential in the small cappers or penny stocks. M3nergy is one of the stocks to look out for (see later note for more info). Again, I see MKLand (8893) or its warrant coming into play soon. There are signs of accumulation and it is a matter of time before the stock rallies. Also look at MPCorp and GPharos.

STI is also expected to continue to rise to retest its year high of 3,906. The Sesdaq could start to move soon... Look at lower liners like Alantac, Beng Kuang Marine and Health Management Int(HMI).

I may have to relook at the Dow's outlook and wave counts but I have yet to find the time.. Dow could be in Wave 4 corrective wave now. What I have written are only from very short term charts and hence the ST outlook.

Anyway, traders in KL and Spore should be in for a ST bullish time (ST- means a week or 2)
:) Happy trading!

New highs expected

2007-10-29T08:46:00.000+08:00

Wall Street positive close last Friday is expected to lift both indices in today's trading. The STI should continue to rise to test its 3,906 high again soon. The KLCI, at its all time high of 1,398, is expected to continue to rise further as the momentum players continue to chase the index higher. KLCI could hit 1,410 soon today. The longer term target for the KLCI is 1,444-1,460. Construction, property and plantation stocks would shine. Lower liners would likely outperform its more mature peers this time round.

Both indices would likely be still affected by what happens on Wall St. Like what I mention last Wednesday, this rebound on the Dow is probably the sideways (or leg up) before 1 more leg downwards within a month or so. Then only the Bull market would likely kick in thereafter...

Dow rebounds but the view remains

2007-10-24T07:37:00.000+08:00

Dow rebounded 109pts last night while the S&P500 added13pts to 13,676 and 1,520 respectively. The rebound is still within the range of my wave count. There is likely another leg down in a day or two - this is Wave 3. This is expected to be followed by a few (about 3-4) volatile days or sideways trading - this should form Wave 4. Followed by the last impulsive Wave 5 down to about the 50-62% correction level - 13,150-13,330. Then the Dow would continue to rally into 2008! This is the correction that I roughly expect to pan out. After this correction - the BULL returns!!! :))

STI should also roughly follow in the same lines. I am looking at 3,500-3,660 for the STI. It may be a wide range but I believe that these are good levels to get in - Heavy for the upcoming BULL run. 4,000 should not be a problem for the STI.

KLCI should break above the 1,392 after this correction. 1,392 is a ten year high - meaning that the bull trend is on its way. Correction should end in Oct or Nov. 100-day SMA should hold steady at 1,336. I am starting to 'hear' about a few stocks. I found these 3 stocks attractive, both technically and fundamentally (except for MKLAND) - CRESBLD, BAHVEST and MKLAND. Will write bout these soon.

I have put down the outlook for the next few weeks. I will not be able to update this blog in the next couple of days because I do not have access to the internet. :)

'Trade within your means' - SS

Mini rebound but more downside expected

2007-10-23T08:40:00.000+08:00

Wall Street saw a minor recovery led by Apple and tech stocks. Dow closed 44pts higher after dropping 114pts in the morning. The consolidation for Dow is not over, I believe. This is just a minor correction after the previous day's sharp drop. There should be one more leg down based on the wave counts. This consolidation is expected to last until end of the month at least.

STI could rebound along with Wall Street's rebound. The index is expected to hold on to its 3,660 support today but similarly to Dow, I expect anther leg down. KLCI is also expected to rebound today probably to close the gap at 1,370. After that, another test of its 100-day SMA at 1,336.

Dow crashes on 20th Anniversary

2007-10-22T08:38:00.000+08:00

Dow crashes on its 20th anniversary of Black Monday. Dow fell 2.6% of 366pts while the broader S&P500 fell almost 40pts. This reversal would likely be swift and maybe 'sharp'. Be prepared for more downside on Monday. On worse case scenario, (If this is wave 2) then it could fall another 1,400 pts back to the Aug low. On the best case scenario, the correction is over (Dow has fallen to its 38.2% Fibonacci retracement) but this is the least likely scenario. How far more, we may have to wait and see.. So refrain from buying just yet... the time will come to buy but not now!!

STI should continue to consolidate after breaking below its 3,780 support. 3500-3550 should be the next strong support. KLCI should also open 20pts lower as suggested by FKLI Futures.. KLCi support is at 1,335, its 100-day SMA. Refrain from buying now!!!

Black Monday - Oct 19, 1987

2007-10-19T11:44:00.000+08:00

How can I forget such a date? It is what Wall Street called it exactly 20years ago. Hmm, I was probably still in school somewhere in the suburbs of KL. There are a lot of similarities here and in 1987.. Here is a summary what a famed Strategist wrote in Newsweek International July issue:-

1.1987 - markets has been rising for 5 years from an extended bear market (ended in 1982)
2007 - markets have also rose for 5-6year since dotcom bust
2.1987 - talk of trouble in the US savings and loan industry
2007 - Subprime-mortgage concerns
3.1987 - Speculative bubble in Japan
2007 - Speculative bubble in China??
4.1987 - surging oil prices - then to USD60 per barrel
2007 - surging oil price - now to USD100 per barrel??

Just be aware that - 'History tend to repeat itself'!!! Would Monday see a crash? I don't know but there is a good chance that a correction is coming - could start next Monday

Idaman (1112) - reprimanded by Bursa

2007-10-19T08:36:00.000+08:00

Bursa Malaysia publicly reprimanded Idaman Unggul for breach of paragraph 9.16(1)(a) of Bursa Securities Listing Requirements ("LR"). Bursa Securities views the contravention seriously and cautions the company on its responsibility to maintain appropriate standards of corporate responsibility and accountability in order to achieve greater disclosure and transparency to its shareholders and the investing public. (Bursa Malaysia S/B).

oops... not a good news. Still, this stock is a lower to buy.. also see Idaman(1112) -new uptrend has begun. Keep in mind that stop loss must be adhered to... Remember, in these volatile days, it is better to keep risks at a minimum.

Sideways market

2007-10-19T08:21:00.000+08:00

Wall Street was rather flat yesterday after Bank of America announced losses of $4bn from trading losses, defaults and loan writedowns. Tech shares kept the indices up. S&P500 was 1pt lower. The US markets would likely be sideways again tonight due to expiration of the options tonight.

STI is trading close to its support of 3,780-3,800. A break below would likely see a new consolidation period for the STI. Chinese S-shares would continue to be in the limelight today.

KLCI is also trading close to its support of 1,365-1,367. Local funds appears to be holding the index by nibbling on some of the key blue chips such as TM and Maybank. Tenaga is still under selling pressure. As predicted, construction stocks saw some profit taking yesterday after their recent strong run. A foreign broker also downgraded Gamuda to a Neutral yesterday. Penny stocks would again dominate - look out for PECD, MPCorp. Both ran already yesterday so be careful.

Personally, I remain a short term bear. I expect a pullback next week. Only after a pullback (depending on how far down - that I do not know yet!!), I would change my ST bearish view. If I am a long term player, I would be buying on the way down.

Idaman (1112) - disposal of insurance arm?

2007-10-17T08:43:00.000+08:00

Idaman Unggul (1112) could announce soon (as early as this month) the disposal of its general insurance arm, Tahan Insurance Malaysia and the planned sale of its timber assets. The sale of the timber asset concession could be worth around RM300m, according to a source. (NST)

My 2 cents - could explain the recent surge in volume traded. Should this rumour be true than it would be beneficial to Idaman. Also, technically, the stock is on a new LT uptrend. See Idaman (1112) - new uptrend has begun.

Another down day ahead

2007-10-17T08:37:00.001+08:00

Consolidation is expected to continue today in line with the fall on Wall Street. Dow lost another 72pts while S&P500 shed 10pts. For STI, we should be able to see more downside today after yesterday's breakdown from its double inside days. A fall below 3,780-3,800 would likely signal the start of a new ST consolidation. On the other hand, for KLCI, a fall below the 1,365-1,367 level would send the index into a ST pullback towards the 1,334 level. It maybe best to stand aside as the overall market is likely to be weak. Construction stocks which has been rallying for the past week could see some profit taking today. However, there maybe one or 2 penny stocks that would outperform.

Turnaround happening now?

2007-10-16T15:48:00.000+08:00

At the point of writing (3.50pm Malaysia/Spore time), the market appears to be turning around. The dreaded reversal is taking place or at least close to happening. The 'trigger' for KLCI and STI are 1,365 and 3,780-3,800. A break below those level at 5.00pm today would likely confirm the ST downtrend has begun. As an investor, I would likely unload most if not all of my share holdings from now till 5.00pm. I would even go as far as 'shorting' if that was possible in the market (that is how bearish I am right now, short term at least).

So, ppl, Raya is over!! Get out now! :)

Be cautious this week

2007-10-16T08:41:00.000+08:00

First of all, Selamat Hari Raya to all readers. :)

Ok now, back from the holidays, how would the markets perform? Dow last night fell 108pts on soaring oil prices and also more worries on the bad debt situation. "U.S. stocks fell the most in five weeks after Citigroup Inc. said defaults will plague the financial industry for the rest of the year" - (Bloomberg News). Consumer stocks are also starting to ease as some fund managers believe that the slowdown has just only started and has a way to go.

STI has had a double inside day which suggest indecision. The players do not know exactly where the market is heading. With overbought indicators, investors should move to a more risk-adverse stance on the market. Reduce some of your shareholdings would likely be the best option, I believe.

KLCI, closed yesterday due to the Raya Holidays, is expected to open flat. There might be some selling pressure on the Blues but penny stock would likely be actively traded. I think investors should start reducing some exposure to the market on rallies this week. If the market do not fall this week or next (i.e after neutralising the overbought indicators), investors could then get in again. Trade cautiously for now.

Profit taking on Wall Street

2007-10-12T08:40:00.000+08:00

Last night Dow fell another 64pts to 14,015 while the S&P500 lost 8pts to 1,554 after Technology stocks fell. Tech stocks fell after JP Morgan issued a sell recommendation on Baidu.com, China's search engine. Google fell for the 1st time in 5 trading days while Apple lost the most in one month. Technically, Dow looks like it is about to turn downwards. Its MACD is also about to issue a ST sell signal. We may have to wait tonight to see if the sell signal takes place or not.

STI saw an inside day on the charts yesterday - which means that investors are undecided on the direction of the market. Nevertheless, with overbought RSI and Stocastics, I think a short term pullback is on the cards. Probably in the next week.

KLCI is at is 55-day high, which is bullish. However, the selling remains on the TMT. Indicators are still positive but also slightly overbought. The index may try to test the 1,392 level today but i foresee a lot of sellers would be waiting at those levels. Penny stocks saw a comeback yesterday afternoon with Mui Ind and BJ Corp leading the way. I continue to like penny stocks for now but I would continue to trade cautiously due to the overbought market.

It is time to be wary

2007-10-11T08:40:00.000+08:00

Oww man... this is the second time that nothing came out...must be my office's internet :(

Dow turned down yesterday, closing 86pts lower. Regional markets should continue to ease a little. Yesterday, there is a bearish engulfing candle on the STI. It is a sign of a possible top for STI. It needs to close below the 3,800 to confirm the change in trend. Otherwise, it could continue to climb.

KLCI continues to climb higher but the big 3 of TMT is still under selling pressure. This could be fund managers are recomposing their portfolios, reducing the TMTs and adding counters like Sime, GHope (for Synergy Drive) and construction counters like Gamuda and IJM. Penny stocks would remain in the limelight but could be under a bit of selling pressure after strong gains lately.

Both the KLCI and STI are in overbought situations and may come under some selling pressure due to profit taking activities. Just be careful when trading as a pullback could take place soon (either this week or next). Besides, just keep in mind that Black Monday took place on October 17th 1987.

Dow at another record

2007-10-10T08:12:00.000+08:00

Yesterday, US markets continue to climb into record levels for the second time this month which should be good for the regional markets. In yesterday's FED minutes, investors found comfort that the US economy is NOT heading for a recession. Dow closed 121pts higher to 14,164 while the broader S&P500 added 13pts to 1,565.

STI should hit new highs today with 3,945 the next target. KLCI will try to breach the 1,380 levels first then followed by 1,392 later. Penny stock would likely to be in the limelight. I have highlighted 2 stocks today which saw a bullish breakout on their charts. They are Idaman (1112) and Metacorp (8389). Also keep an eye on MESDAQ counters like YTLE (which also moved yesterday), AIM, Opcom and BAHVEST (but no volume).

Happy Trading!!!

Idaman (1112) - New uptrend has begun

2007-10-10T08:08:00.000+08:00

Idaman (1112) seems to have started its MT uptrend. It has to confirm by breaking out above the RM0.40-0.42 level. This stock could double :) . As long as the stock stays above the RM0.24 level, the uptrend should still be intact. So, first target is RM0.40-0.42.

Metacorp (8389) - Hop on!!

2007-10-10T08:04:00.000+08:00

Metacorp (8389) rallied strongly in the afternoon session yesterday. It broke out of its 2-month consolidation triangle. I think it is a good time to jump in and join the bandwagon. Stop loss should be just below yesterday's low of RM0.52, maybe at RM0.51. First target is its year high of RM0.705. Should the stock continue to climb, i think it could even hit RM1.00 in the longer run.

Lower liners continue to shine today but...

2007-10-09T08:03:00.000+08:00

Dow closed marginally lower but the Nasdaq continue to climb to 5-year highs. Regional markets saw a lot of volatility yesterday. Some profit taking activities coupled with bargain hunting send the HSI swinging wildly yesterday similar to the past 2 trading days. In Msia, the penny stocks continued to be actively traded. In Spore, more penny stocks are starting to see action after a few weeks in the doldrums.

Note of caution: The markets are now overbought. Investors ought to be wary of pullbacks. I believe that there could be a pullback sometime this week. The KLCI is already pulling back while the STI is still flat.

Multi-Con Systems (Spore) - Bullish breakout!!!

2007-10-05T08:43:00.000+08:00

Multi-Con Systems also staged a bullish breakout yesterday. Trading volume was very good, suggesting that this breakout is genuine. There is still room on the upside here. Next target should be S$0.32-0.355. Downside risk - put a stop below the breakout level at S$0.24, maybe at S$0.23. Long term outlook looks good too. Something to hold for the longer term if investors choose to do so.