ZLBT Chats

Friday, July 31, 2009

FBM KLCI rebounds smartly

After two days of losses, the local stock market rebounded smartly on Friday, July 31 taking its lead from Wall Street’s gains. The benchmark index started off very strong on Friday, but succumbed to some pre-weekend profit-taking activities in the afternoon. A late spurt of buying lifted it back to its earlier highs. Stocks in Bursa Malaysia posted the highest close for the year amid investor optimism that the recession is over.

The FBM KLCI index surged as much as 16 points early in the morning, but pared two-thirds of those gains in the afternoon session before a late spurt of buying lifted it 14.2 points higher at 1,174.9.

The benchmark FBM KLCI was in positive territory throughout the day on positive cues from Wall Street and Asian markets as the global economic outlook seems brighter. Market breadth was positive with advancing stocks beating declining ones by a 2.3-to-1 ratio at the close. A total of 1.26 billion shares changed hands.

The Finance Index added 0.82% to 9555.23 points, the Plantation Index gained 0.19% to 5609.60 points and the Properties Index rose 0.72% to 752.21 points.

Actively traded stocks include KNM, Ramunia, Handal, SAAG, Mobif, Iris and Bumputra-Commerce. Major gainers include CCB, BAT, Bumputra-Commerce, PPB, and Tanjong plc. Losers include Hong Leong Bank, Public Bank, NSTP and Star.

Friday’s gains helped the benchmark index recoup total losses of about 12 points on Wednesday and Thursday, as investors were then roiled by fears of credit tightening measures in China which sparked a sell-off in global stocks and commodities.

However, confidence improved on Friday, led by Wall Street’s overnight gains as investors cheered more better than expected results, this time from Sony, and bought ahead of expectations of better second-quarter GDP data to be released on Friday. Commodity prices also recovered strongly.

The GDP data is expected to confirm the US economy falling at a much slower pace in the second quarter, with expectations of a contraction of 1.2% compared with a 5.5% slide in the first quarter. With most major results out of the way in the US, investors are likely to return to focus on economic data, to assess the recovery ahead. Elsewhere, economic data is still patchy in Japan.
On Thursday, the government said industrial output rose 8.3% in the April-June quarter from the January-March period -- the biggest on-year jump since 1953. However, on Friday, data released showed the jobless rate in June rising from 5.2% to 5.4%, the highest level in six years, while consumer prices fell at a record level for the month. Japan's core consumer price index fell 0.2% in June, or 1.7% lower than a year earlier. Back home, the earnings season will become busier in August. This will provide leads for investors as to the health of the domestic economy and corporate sector – which has been relatively resilient despite the severity of the crisis in developed countries.

Malaysia July Palm Oil Exports 1.40 Mln Tons, +14% - Intertek

Malaysia's palm oil exports in July rose 14% on month to 1.40 million metric tons, cargo surveyor Intertek Agri Services said Friday. Malaysia's palm oil exports were 1.23 million tons in June. The July estimate is within market expectations for a 10%-14% rise.
Another surveyor, SGS (Malaysia) Bhd., is scheduled to issue its own estimate later in the day.


Since our trading buy call on AirAsia on the 15th of July at a price of RM1.16, AirAsia Bhd has surged 27.5% in just 2 weeks. Our trading target of RM1.50 has now been achieved. Ironically, even we did not expect our target price to be achieved so fast.
However, considering the strength of AirAsia’s rally, it’s obvious that the bulls are not done yet. Our research team also has a buy call on AirAsia at a 12-month target price of RM1.90.
Where to next?
Considering the bullish strength of AirAsia’s rally, it is obvious that AirAsia is heading higher. From the chart above, AirAsia can be seen forming a much steeper red 5-month upward trading box that has broken above its longer term blue 1-year trading box. This signifies bullishness in the mid term. If AirAsia can break above its major 1.70 resistance, it will likely head towards the 2.00 region soon.
How to trade AirAsia and minimize risk
Though AirAsia will head higher in the next few days, it is in overbought territory with a 14-day RSI of 81%. We advice traders to wait for corrections by late next week to accumulate AirAsia at lower prices for a trade towards the 2.00 level.
Trading the Call Warrants
AirAsia has two call warrants which is AirAsia-CE (RM0.22) and AirAsia-CF(RM0.26).

It is risky trading AirAsia-CE as it is due to expire on the 3rd of September 2009. AirAsia-CF is a better trading option, currently at a premium of 13.5% with an expiry 1.5 years later on the 21st of January 2011. It should be noted that call warrants are bullish instruments and should only be treated as a short term trading tool, and not as a buy-and-hold. We expected the premiums of its call warrants to decrease as their mother shares rally higher.

We retain our bullishness of AirAsia and revise our target trading price upwards to RM2.00.

Asian Crude Palm Oil Ends Up On Short-Covering, Demand Outlook

Crude palm oil futures on Malaysia's derivatives exchange rebounded Thursday as investors covered shorts on an improved demand outlook while gains in soyoil supported prices, said trade participants.

Prices rose as much as 2% to an intraday high of MYR2,154 after trading in a narrow range throughout the day as sentiment improved on hopes festive demand for palm oil had risen.

The benchmark October CPO contract on the Bursa Malaysia Derivatives ended MYR32 higher at MYR2,145 a metric ton, the highest finish for CPO futures since July 21.

Traders estimate Malaysia''s July palm oil exports to be up 10%-14% on month at 1.35 million to 1.40 million tons. Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. are scheduled to issue export data Friday.

In June, Intertek and SGS estimated palm oil exports around 1.23 million tons.

"CPO prices closed firmer after fairly choppy trade in the morning session. Prices are likely to remain firm tomorrow," said a Kuala Lumpur-based trading executive.

Prices may test resistance at MYR2,190 should the export data meet market expectations, the trader said.

A 10% rise in exports may push palm oil stocks lower to 1.36 million tons as demand may outpace Malaysia''s palm oil output, traders and analysts said.

Palm oil stocks in June stood at 1.41 million tons, according to data from the Malaysian Palm Oil Board.

CPO's gains were also boosted by higher soyoil and crude oil prices.

Toward the end of trade on the BMD, soyoil futures on e-CBOT rallied, with August soyoil trading 56 points higher at 33.73 cents a pound.

In the cash market, cash palm olein for August was offered $10 higher at $680/ton and September shipment was offered at $675/ton, while October/November/December was offered $10 higher at $667.50/ton.

No trades were reported in the afternoon session as the market awaited the export data. The bid-offer gap was around $10/ton, said a Singapore-based trading executive.

Cash CPO for prompt shipment was offered MYR40 higher at MYR2,230/ton.

The trading volume of CPO futures fell to 10,704 lots from 15,366 lots Wednesday, while open interest fell to 83,246 lots from 83,742 lots. One lot equals 25 tons.

You Fools Don't Get It: This Is A V-Shaped Recovery!

Finally, a rip-roaring bull case supporting the idea that the market will rocket higher from here. As we noted last week, the current consensus is that the economy will soon start growing but that the recovery in 2010 will be feeble.
This consensus is likely to be wrong--the consensus is usually wrong--but uber-bulls and uber-bears have been so shamed of late that most are afraid to come out and really bang the drum one way or the other.
Economies recover much faster than most people think.
"The average forecast for third-quarter US gross domestic product growth is a weak 0.8 per cent, which would be by far the slowest first quarter of any recovery on record. Since 1945, the average annualised real US growth rate in the first two quarters of recovery is 7 per cent. History provides abundant evidence that the deeper the recession, the stronger the bounce. Even the recovery from the Great Depression conformed to this rule, real US GDP grew 10.8 per cent in 1934 and 8.9 per cent in 1935."
Asia is already seeing a v-shaped recovery.
"Output, employment and demand [are] all following V-shaped trajectories, and regional industrial production rapidly bouncing back above the previous peak. Yet this recovery is dismissed by western analysts, who appear unable or unwilling to believe the region is capable of endogenous growth."
10% unemployment will not derail the recovery.
"The 9.5 per cent US unemployment rate is also viewed as an obstacle...This objection ignores the many contrary examples of high unemployment rates and subsequent recoveries, not least in the US. Thus in 1982, US unemployment hit 10.8 per cent, yet GDP soared at an average annual pace of 7.7 per cent over the next six quarters."
One reason unemployment is so high is that employers over-reacted, firing too many people.
"The large post-Lehman rise in US unemployment was a mistake on the part of panicky managements... Businesses, like markets, panicked after Lehman went under. Employment and output were both reduced far more than it turned out to be necessary, as businesses temporarily and understandably assumed a worst case scenario."
De-leveraging is irrelevant: Private borrowing never drives recovery.
"Increases in private leverage never play a significant role in recoveries. Indeed, since 1950, US private sector borrowing ex-mortgages has declined an average 0.1 per cent of GDP in the first year of recovery, with non-financial business borrowing declining 0.6 per cent of GDP."
Consumers are now saving enough.
"A regression of the household savings rate on the wealth-to-income ratio tells us the former has made the appropriate adjustment to declines in the latter. In fact, the rally in the stock market, the low level of interest rates and the stabilisation in house prices all tend to limit the risk of a further sizeable increase in the savings rate."
Put it all together? V-shaped recovery, baby :D

Either way, hang on to your hat!

Stock Of The Day >>> 4405 Tan Chong

The Group's principal activities are assembling and distributing passenger and commercial vehicles, automotive services, distributing automotive spare parts and insurance agency.

Other activities include providing hire purchase financing, personal loans, money changing, property and investment holding activities. The Group operates in Malaysia.


Tan Chong & Sons Motor Co. is the franchise holder for NISSAN vehicles in Malaysia & Singapore since 1957. NISSAN cars sold in Singapore are fully imported from Japan, whilst those in Malaysia are locally assembled.

Tan Chong emphasises excellence in customer service and product quality. Edaran Tan Chong Motor markets and distributes the NISSAN lineup through 70 branches nationwide, supported by 62 authorised sales dealers. Tan Chong Express Auto Service operates a comprehensive network of 45 service centres and 50 authorized workshops across Malaysia.

Our assembly plant in Kuala Lumpur which assembles NISSAN cars, as well as other makes of cars such as Renault and Mercedes under contract, was awarded the ISO 9002 Certification on quality in manufacturing in 1993, a first in South East Asia. Furthermore, the Spare Parts Centre operates 44 branches nationwide with 86 authorized stockists.

Thursday, July 30, 2009

TECHNICAL ANALYSIS >>> Composite Index 30/07/2009 / 综合指数 2009年 7月 30日

Composite Index 30/07/2009
As shown on the chart above, the KLCI consolidated around the 1163 Fibonacci Retracement level, closing 3.83 points or 0.3% lower. Resistance for the KLCI remains at 1186 Automatic Fibonacci Retracement. If the KLCI should rebound, the 1163 WinChart Automatic Fibonacci Retracement shall resume to be the support for the KLCI.

On Thursday, the Bollinger Bands Width contracted another 19%, suggesting the KLCI is consolidating. As indicated by A, the KLCI remains supported by the Bollinger Middle Band, and therefore, the immediate outlook for the KLCI is still bullish biased. If the KLCI should rebound above the Bollinger Middle Band, and the Bollinger Bands Width should re-expand, the KLCI could resume its rally.

As indicated by B, total market volume declined 39.4%, with investors remain at the sidelines while waiting for some fresh leads. Generally, it is normal to have lower volume during the KLCI consolidation. However, if the KLCI should resume its rally, volume has to increase and above the 40-day VMA level to confirm the bullish movement.

As circled at C, the MACD histogram is still showing a rounding top. This suggests that the KLCI short term consolidation is still intact. The MACD histogram should rebound and form a rounding bottom, only then, it would suggest that the consolidation has ended, and the KLCI could have a chance to regain some strength.

From the Technical Analysis point of view, the current low fluctuation / consolidation of the KLCI is a typical healthy consolidation, with the KLCI still above the Bollinger Middle Band, the outlook has not turned bearish biased. If the Bollinger Bands Width should continue to contract, it would suggest that the KLCI is gearing up for a new movement, and the direction of the new movement shall only be revealed when the Bollinger Bands Width re-expands
综合指数 2009年 7月 30日


如图中C圈所示,平均乖离的振荡指标(MACD Histogram)依然处于圆顶(Rounding Top)的状态,这表示综指短期技术调整还未结束。通常平均乖离振荡指标必须形成相对的圆底(Rounding Bottom),那才是综指调整结束,有望转强的讯号。


Crude Palm Oil >>> Trading seen sideway to higher on festival demands

CPO benchmark daily technical indicators remained supportive with moving average period 5 and 15 maintains its sideways to bias upside posture. While, stochastic continue to stay at neutral territory with % K and %D at 46% and 42% respectively. Parabolic also remains in holding long with sell stop adjusted to 2053. Thus, market may continue to move in sideways to bias upside potential in near term as shown by indicators. As for now, the immediate downside support is pegged at 2085-2100 followed by 2050-2070. To the upside, resistance is pegged at 2160-2185 followed by 2200-2220. >Yesterday, the active OCTOBER delivery contract stalled on early session’s attempt to re-take territory above the moderate resistance area at RM2’150/MT. This has attracted selling momentum from the top dragging the market down below the important resistance-turned-support at RM2’134/MT. Failure to resurface above this crucial resistance area will be potentially damaging to the hopeful bulls for the near-term. As this will inspire extended fall towards the nearest intervening support at the RM2’099/MT region. Furthermore, extended weakness beyond this will magnetise the market towards the pivot-support at RM2’063/MT level.

Bursa Malaysia >>> Plantation stocks down at midday

Blue chips extended their losses, with big capitalised PLANTATION related counters among the major decliners at the midday break on July 30 while key Asian markets reversed into the red.
At 12.30pm, the 30-stock FBM KLCI fell 5.69 points to1,158.79. Turnover was 369.43 million shares valued at RM592 million. Decliners beat advancers nearly two to one, with 313 losers, 181 gainers while 224 stocks were flat.
The cautious sentiment was also seen in key Asian bourses where Hong Kong's Hang Seng Index fell 0.36% to 20,006.81, Shanghai's Composite Index fell 1.15% to 3,228.75 and Shenzen Composite Index 1.81% lower at 1,052.75. Japan's Nikkei 225 lost 0.15% to 1,098.49 and Singapore's Straits Times Index 0.06% lower at 2,602.59.
Light crude oil fell 29 cents to US$63.06 while crude palm oil futures gained RM7 to RM2,120.
At Bursa, KL Kepong and PPB fell 20 sen each to RM12.40 and RM14.20 while Genting Plantations declined 10 sen to RM5.70 and heavyweight Sime Darby shed five sen to RM8.05.BAT was the top loser, down two bids or 50 sen to RM45.50, Bina Darulaman lost 11 sen to 81 sen while UMW, Jaya Tiasa and Tasek shed 10 sen each to RM6.15, RM2.40 and RM3.50.

Handal rose 24 sen to 96 sen and it was the second most active counter with 17.5 million shares done. KNM was the most active, unchanged at 86.5 sen. HPI Resources, which is involved in packaging and transportation, was the top gainer, adding 25 sen to RM1.21 with 2.1 million shares done. It posted a strong set of earnings and it also proposed a bonus issue. Carlsberg rose 18 sen to RM4.42, IJM and Tanjong 10 sen higher at RM6.15 and RM14.80.

GDP Zenith?

In a hypothetical scenario, if there was a big black bear out there, he would mark the zenith of the rally during these few days which would coincide with the release of the US GDP data (advanced estimates) tomorrow night.
Late last month, we called for this bullish wave which has pushed the KLCI up by 100 points to a peak of 1,179 yesterday. We believe that the main force driving this 2 week rally is the upcoming US GDP results, which experts think could surprise on the upside. With the US GDP results out tomorrow, we opine that this could possibly be a short term peak, and that traders should be more cautious in the next few days.
On Monday, we called for a correction towards the end of the week. This scenario is now coming into play with the KLCI down 7.9 points yesterday and the Dow mildly negative for the last two days. These are small symptoms of toppishness.

US Q2 GDP Results out tomorrow
The critical US GDP results advanced estimates for Q2 will be released tomorrow night. Consensus estimates peg an annualized GDP decline of 1.5% which is a significant improvement over the previous quarter’s annualized decline of 5.5%. We think that positivity of the GDP data has already been priced in with a 12% rise in the Dow and a 9.3% rise in the highly correlated FBM-KLCI in the last two weeks

Peak of Positivity
With a string of US economic reports (Case Shiller Housing Index and Durable Goods ex-trans) showing positive results yet still failing to push the Dow above its 9,124 high in the last few days, it is obvious that US traders are now uncertain and awaiting the release of the GDP data tomorrow. We think that the GDP data might possibly be the short term finale of the recent bullish wave.

We still retain our bullish view, but opine that KLCI traders should now i) take profit at upticks and ii) suspend buying for now and observe the post-GDP behavior of the US’ Dow Jones. If the Dow and global markets can still rally post-GDP data then it could be a positive continuity sign for the global bull rally.


Every time I chat with people in BT, I tell them that even though I am sharing knowledge obtained through years of hard work, there's one valuable part of this knowledge nobody can give to a student. This is experience .............

Experience doesn't mean having 2 or 5 or 20 years trading the markets. Experience is not necessarily based on the amount of time you spend in the market. I know traders that have been attempting to trade for years and they have very poor results. Experience is not the amount of time you spend trading the market . Experience is the quality of the time you spend.

Most traders wander through the market. They experience many trades. Some trades are successful and some trades are not successful. These traders never learn anything from any of those events. Without a trading plan to follow , it is difficult to objectively determine what they have learned from their trades. Being able to distinguish between a 'good' trade and a 'poor' trade is critical in learning from your mistakes. 'Good' trades are not necessarily ones that make you money once you exit. 'Poor' trades are not necessarily ones that result in losses to your account. A good trade is a trade where the trading plan is followed correctly.

Traders have to go through many different periods in the markets and they will encounter many different situations. How traders deal with those situations shapes their future as traders. Traders can expect to have losing trades and losing streaks where many trades are unsuccessful. This is all part of the trading profession.

If traders intend to survive in the market and become consistent traders, they must find a way to learn from every winning and losing trade. The objective is to avoid repeating the same mistakes.

Ideally, you make a certain mistake once, and you don't make it again. This is very difficult to achieve. Part of developing experience is developing an awareness of the mistakes you are making. Sometimes you have to repeat a mistake several times before you recognise the error. You can quickly identify mistakes as soon as possible if you review all your trades. Then you can stop making that mistake.

Professional traders do not spend 100% of their time trading. A professional trader spends a third of their time preparing for the market, another third actually trading and the last third evaluating the trading results.

The rapid market fall in 2008 shows why it is necessary to have a good trading plan. This market fall is used to improve the quality of your trading experience. Experience doesn't mean having many years trading the markets. Experience is not the amount of time you spend trading the market. Experience is the quality of the time you spend.

After the recent market fall traders will take time to evaluate their success or failure. The answers help to develop quality experience. There are five features.

*Creating quality experience starts with a Trading Plan. Start by specializing in one or two strategies. There are many different strategies in the market. Many of them are successful, but you must select the strategy that you feel most comfortable with. This strategy will suit your personality so it is easy to apply effectively.

*Keep a Trading diary. This is a record of every trade. The notes include the reasons for the trade. It includes the trade plan. It includes the trade development and also the reason for the exit. These are brief notes. They help you to find the common features of success and the common features of failure. It is a record of how your experience is developing

*At the end of each trading day print the chart of every trade. Make notes about the trade. This improves your learning experience because it teaches you to recognize price and market patterns. It reminds you of what happens when the patterns are successful , or when the patterns fail.

*At the end of every three months evaluate the information you have collected. This will help you recognize your strong and weak points. Are you more successful with momentum trades or trend trades? Is your entry point effective? Is the stop loss method effective? Do you wait too long to exit a losing trade? The answers will help you develop the quality experience necessary to become a better trader.

*If you find common and repeated mistakes, then you may need to make changes to your trading plan. First check to make sure all your trades follow your trading plan. If you have many trades which do not exactly follow your plan then go back to step one and develop the discipline to trade your exact trading plan.. If you consistently and exactly follow the correct trading plan then you will develop the quality experience necessary for successful trading.


Stock Of The Day >>> 9296 RCE Capital

RCE Capital (9296)
Down 3.1% at 62.5 sen in moderate volume but CIMB technical analyst says "RCE share price weakness in an opportunity to accumulate" as stock is holding firm within medium-term uptrend range. "As long as prices stay above its key daily moving averages (DMA), we believe there is an opportunity for it to rise toward the upper resistance trend line," analyst says in report. 30-DMA and 50-DMA at 59 sen.
Noted both MACD, RSI signal lines are rising. Analysed immediate resistance at 69 sen, followed by 72 sen. Support at 57.5 sen and 53.0 sen.

Asian Shares End Lower On China Sell Off;Shanghai Stocks Dn 5.0%

Chinese shares staged a sharp decline Wednesday despite successful debuts for two China-linked stocks, prompting investors elsewhere to dump some shares and currencies perceived as risky.

The benchmark Shanghai Composite Index ended down 5.0% at 3,266.43, having fallen as much as 7.7% earlier in the day on disappointing Chinese corporate profits and falling commodity prices. The loss erased most of the gains made over the previous five sessions, and marked the Shanghai index''s biggest percentage drop since Nov. 18, when it tumbled 6.3%. Daily volume hit a record 302.81 billion yuan ($44.3 billion).

As the drop in Shanghai become more pronounced in the afternoon, other Asian markets including Hong Kong and Mumbai fell, with the Hang Seng Index ending down 2.4%. The Sensex was 1.3% lower. U.S. stock futures turned lower, with the Dow Jones Industrial Average futures recently down 20 points in screen trade.

In currency trading, the Australian dollar fell sharply and the yen, viewed as a safe haven, rose against major currencies.

Earlier, Japan''s Nikkei ended up 0.3%, South Korea''s Kospi slipped 0.1%, Australia''s S&P/ASX 200 gave up 0.6% and Taiwan''s Taiex slid 0.8%. Singapore''s Straits Times Index was down 0.8%.

Francis Lun, general manager at Fulbright Securities, said the Chinese markets tumbled from "an unattainable level because of hot money, and there are fears the central government will act to cool the markets."

Chinese policy makers in recent weeks have flagged inflationary worries and possible asset bubbles since lending exploded. New yuan loans in the first half of the year totaled 7.4 trillion yuan ($1.08 trillion), equivalent to about half of the country''s gross domestic product in the period. The loan growth has spurred calls by economists for the central bank to fine-tune its policies. Still, the People''s Bank of China has signaled no reversal of its moderately loose monetary-policy stance, which is aimed at spurring growth in the world''s third-biggest economy.

"The (Shanghai) market does need to correct after five consecutive sessions of gains, and it will likely continue to fall in coming days," said Wu Dazhong at Shenyin Wanguo Securities. "I expect the market to resume its upward trend after corrections if the PBOC keeps its appropriately easy monetary policy."

Leading the declines in Shanghai, China Cosco Holdings tumbled 8.4%, while Jiangxi Copper lost 9% after saying it expects first-half net profit to drop between 57% and 64% from a year earlier. Both had hit their daily limit of a 10% decline. In Hong Kong, China Cosco fell 6.7% while Jiangxi lost 8.5%.

Nonetheless, China State Construction Engineering Corp. and cement maker BBMG both jumped on their debut.

In Shanghai, CSCEC shares ended at 6.53 yuan compared with the initial public offering price of 4.18 yuan - though the finish was toward the lower end of the stock''s trading range for the day. Earlier, the stock jumped as high as 7.96 yuan. The $7.3 billion IPO - the world''s biggest so far in 2009 - was heavily oversubscribed. Shares of BBMG ended at HK$9.97 in Hong Kong, also well above its IPO price of HK$6.38.

"I don''t think the IPOs will be affected by the day-to-day movement of the market, unless there is some big news," said Howard Gorges, vice chairman at South China Brokerages.

Most regional markets had started the day on a weak note, with sentiment damped after weaker-than-expected U.S. consumer confidence data, which weighed on crude-oil and commodity prices.

Commodity stocks fell around Asia, with BHP Billiton losing 1.6% and Rio Tinto down 2.4% in Sydney. In Tokyo, Inpex lost 1.7% and Japan Petroleum Exploration shed 1.9%.

Further weighing on energy share prices in Hong Kong was China''s announcement that it would cut prices for refinery products. China Petroleum & Chemical Corp., or Sinopec, fell 5% and PetroChina was 3.9% lower. On the mainland, PetroChina sank 6% and Sinopec shed 0.8%.

In Mumbai, losses were led by metals, infrastructure and consumer goods shares. Tata Steel fell 5.8%, Sterlite Industries gave up 5.5%, Reliance Infrastructure lost 3.8% and DLF was down 6.6%.

Indonesian shares ended down 0.5%, while Philippine shares were resilient, advancing 1.3%.

In currencies, the yen rose against the U.S. dollar in late trading as Chinese stocks sold off, but has since given up gains. The dollar was recently buying Y94.70 compared with Y94.55 in late New York trade. The euro was at Y133.97 from Y133.99 late New York and at $1.4147 from $1.4172. The Australian dollar was buying US$0.8201, down from US$0.8267.

Spot gold was at $936.00 per troy ounce, down $1.00 from the New York close, reversing early gains. September Nymex crude oil futures were down $1.62 at $65.61 a barrel on the Globex electronic platform.

Wednesday, July 29, 2009

TECHNICAL ANALYSIS >>> Composite Index 29/07/2009 / 综合指数 2009年 7月 29日

Composite Index 29/07/2009
As shown on the chart above, theKLCI had its intra-day high reaching 1179.08 points, but profit taking activities took place, and pulled down the KLCI to close 7.9 points or 0.7% lower. Since the KLCI is closing around the 1163 level, the 1163 Fibonacci Retracement will be the current support for the KLCI while 1186 Fibonacci Retracement is still the resistance.

Bollinger Bands Width contracted 17% on Wednesday, suggesting the KLCI is still consolidating. As indicated by A, the Bollinger Middle Band is the target of the KLCI consolidation and if the KLCI should rebound from the Bollinger Middle Band, there is a good chance for the KLCI to resume its rally.

As indicated by B, total market volume increased to the 40-day VMA level. However, the KLCI ended lower suggesting some increased of selling. Nevertheless, as the KLCI managed to rebound from its daily low, it suggests that there were some late buying interests.

As circled at C, the MACD histogram is still showing a rounding top, suggesting the consolidation of the KLCI is still in place. In short, the consolidation is expected to carry on until the MACD histogram should form a rounding bottom.

Despite volume rising to the 40-day VMA level, the KLCI ended lower as profit taking took place. Fortunately, some late buying helped the KLCI regain some ground. If the KLCI should have a healthy consolidation above the Bollinger Middle Band, the KLCI is likely to resume its uptrend after the consolidation.
综合指数 2009年 7月 29日

由于布林频带继续收窄(-17%),所以综指在受到持续的卖压下出现技术调整,无论如何接下来布林中频带(Bollinger Middle Band)将成为综指的动态支持线(参考箭头A);换句话说,只要综指能在布林中频带获得扶持,那综指有望在技术调整结束后重新恢复上扬的趋势。


如图中C圈所示,平均乖离的振荡指标(MACD Histogram)继续下滑,所以振荡指标还是维持圆顶(Rounding Top)的形状,这是综指技术调整的讯号,此调整将一直维持至振荡指标形成相对的圆底(Rounding Bottom)为止。


Genting drags blue chips into red

Selling pressure accelerated towards midday on July 29, sending the FBB KLCI into the red, mirroring the losses in most key Asian markets as investors turned cautious about corporate earnings.
At 12.30pm, the FBM KLCI fell 7.91 points to 1,164.47. Turnover was 742.14 million shares valued at RM892.47 million. There were 205 gainers, 387 losers and 236 counters unchanged.
Among key Asian markets, Japan's Nikkei 225 rose 0.22% to 10,109.02 but Shanghai's Composite Index fell 1.75% 3,378.05, Singapore's Straits Times Index 0.2% lower at 2,618.99 and Hong Kong's Hang Seng Index lost 1.63% to 20,289.10.

Crude palm oil futures was unchanged at RM2,140.

Light crude oil fell 56 cents to US$66.67 a barrel, extending its decline from the previous day when it fell US$1. According to Reuters, the fall in oil prices were on renewed concerns over the U.S. economy after a drop in consumer confidence and bearish American Petroleum Institute (API) crude data.
API reported US crude oil stockpiles jumped 4.1 million barrels last week, countering analysts' expectations for a 1.3 million-barrel draw, as imports rose and refiners slowed their processing rates.

At Bursa Malaysia, Genting fell 30 sen to RM6.40, IJM 25 sen to RM6.05 and PPB 10 sen to RM14.20. Other decliners were Edaran, sliding 15 sen to 50 sen while MPI also gave up 15 sen to RM5.90, A&M and Asia File 12 sen each to 57 sen and RM4.98 while KKB gave up 10 sen to RM1.70.

KNM was the most active with 40.7 million shares done, falling 1.5 sen to 88 sen. Lion Corp gave up 2,5 sen to 49.5 sen. However, Tebrau Teguh added two sen to 82.5 sen.

John Master jumped 16.5 sen to 90 sen with 10 million units done after its proposed 63 sen capital repayment.
Warisan rose 34 sen to Rm2.28, making it the top gainer but with only 200 shares done. Consumer stocks rose, with Dutch Lady adding 30 sen to Rm11.30, Nestke and BAT 25 sen each to RM32 and RM45.50.

Wall St Unfazed by Data, Stocks End Mixed

Lifted by another late-day comeback, the Dow closed with just slight losses Tuesday and the Nasdaq Composite ended in the green for the 14th time of the last 15 sessions despite an ominous report on consumer confidence.
Today’s Markets
The Dow Jones Industrial Average sank 11.79 points, or 0.13%, to 9096.72, the Standard & Poor's 500 fell 2.56 points, or 0.26%, to 979.62 and the Nasdaq Composite climbed 7.62 points, or 0.39%, to 1975.51.

The disappointing consumer confidence report initially sent the Dow down more than 100 points and nearly overshadowed new data that showed U.S. home prices climbed on a monthly basis in June for the first time in three years.

“Clearly we’ve had a huge move, almost 1,000 points, from where we were just a couple of weeks ago. We’re certainly due for a pullback,” NYSE trader Ted Weisberg of Seaport Securities told FOX Business. “Certainly the economic news today was less than robust. But even though we’re down, the market looks like it kind of wants to hang in there.”

After closing in the green in 10 of the past 11 days, the markets struggled for most of Tuesday amid conflicting economic gauges and a mixed batch of earnings reports from companies like Viacom (VIA:25.15, -0.47, -1.83%) and Office Depot (ODP: 4.38, -0.99, -18.44%). But for the second-straight day, the markets saw a burst of last-minute buying, erasing nearly all of the Dow's triple-digit tumble.

The markets have been on a hot streak ince July 13 thanks to a very strong start to earnings season. The renewed optimism sent the Dow to its best two-week stretch since 2000 and to levels unseen since early November.

“We’ve had such an explosive move over the last two weeks that you can't stay up at these levels without at least a little bit of a pause,” said Michael James, senior equity trader at Wedbush Morgan Securities, who said it doesn’t “feel like” the markets are going to give back more than a few percentage points of their recent surge. “The earnings reports over the last several weeks have been solid enough to justify the market not pulling back too much.”
Almost half of the Dow's 30 components closed in positive territory Tuesday, led by Bank of America (BAC:13.37, 0.281, 2.15%) and Boeing (BA: 43.25, 0.98, 2.32%). On the downside, drug giants Pfizer (PFE: 16.03, -0.61, -3.67%) and Merck (MRK: 29.98, -0.82, -2.66%) tumbled more than 2% a piece.

With crude oil's three-day win streak ending, energy stocks like Schlumberger (SLB: 54.64, -1.91, -3.38%) were some of the biggest drags on Wall Street as the sector slumped nearly 1.5%. After gaining more than 4% over the past three session, crude fell $1.15 a barrel, or 1.68%, to $67.23. The energy sector wasn't helped by the latest earnings reports as BP (BP: 49.99, -1.34, -2.61%) said it is increasing its cost savings target by 50% amid a 53% dive in profits and Valero (VLO: 18.33, -0.45, -2.4%) suffered a quarterly loss.
After a stellar start to earnings season helped send stocks soaring over the past two weeks, the markets have received a mixed cluster of quarterly results this week.
Global Markets
Ending an 11-day win streak, London's FTSE 100 tumbled 1.25% to 4528.84. France's CAC 40 fell 1.23% to 3330.97 and Germany's DAX sank 1.46% to 5174.74.
Asian markets closed mixed as Japan's Nikkei 225 ended unchanged at 10087.26 but Hong Kong's Hang Seng gained 1.84% to 20624.54 and China's Shanghai Composite advanced 0.09% to 3438.37.

Charts Tip Green Packet May Rise To MYR0.88

Green Packet (0082.) +3.1% at 83 sen in heavy volume, breaking 100-day moving average and medium-term downtrend channel. Breakout accompanied by rising volume, "reflecting better appetite for the stock over the near term," says CIMB in a report.Notes, indicators show more room to the upside; MACD turned positive while RSI is also rising. Resistance at 88.0 sen. "Investors who wish to ride through this breakout may start to nibble now.

.However, a stop below 72.5 sen is a must, as falling below this level would signal the end of this rally," CIMB says.

TECHNICAL ANALYSIS >>> 综合指数 2009年 7月 28日 / Composite Index 28/07/2009

综合指数 2009年 7月 28日
如图所示,富时大马综合指数周二上扬突破1163点的胜图自动费氏阻力线,创下自2008年7月1日来的新高,所以综指接下来的阻力水平将落在1186点的胜图自动费氏线,支持水平则是1163点及布林中频带(Bollinger Middle Band)的动态支持线。


如图中C圈所示,平均乖离的振荡指标(MACD histogram)依然显示圆顶(Rounding Top),这表示综指短期还是属于调整巩固的格局中,接下来若平均乖离振荡指标回升形成圆底(Rounding Bottom)时,综指恢复强势的讯号将获得确认。
Composite Index 28/07/2009
As shown on the chart above, the KLCI broke above the 1163 Fibonacci Retracement important resistance, marking yet another new high since 1st of July, 2008. Therefore, the next resistance for the KLCI is seen at 1186 Fibonacci Retracement while the 1163 level and the Bollinger Middle Band are the supports for the KLCI.
As indicated by A, the Bollinger Bands contracted 11%, but the KLCI ended higher, suggesting the KLCI is rebounding from its consolidation. With the KLCI above the Bollinger Middle Band, the immediate outlook for the KLCI is bullish biased. If the Bollinger Bands Width should re-expand, with the KLCI remains above the Bollinger Middle Band, more upside room for the KLCI is expected.
As indicated by B, total market volume increased 13.8%, but still below the 40-day VMA level. Nevertheless, total market volume is getting closer to the 40-day VMA level, as investors are feeling more confident about the market. If volume should reach 40-day VMA level, it would help lifting the market sentiment.
As circled at C, the MACD histogram is still showing a Rounding Top, suggesting the KLCI short term is still in consolidation stage. If the MACD histogram should tick up and form a Rounding Bottom, it would be a signal suggesting the KLCI is resuming its rally.
Although indicators like Bollinger Bands and the MACD histogram are still showing consolidation signal, the KLCI ended higher with volume increased. Provided that the KLCI rally is supported with rising volume, the rally is valid. Ideally, the best confirmation of a bullish movement is to have volume above the 40-day VMA level, meanwhile, the Bollinger Middle Band is still serving as the dynamic support for the KLCI.