FKLI Market Outlook 17/02/09

FKLI Market Outlook 17 Feb 2009

The KLCI start the week marginally lower to end at 907.19, -2.65 pts or -0.29% in line with weakness in regional market where STI shed 22.33 pts or 1.31%, Nikkei 225 fell 29.23 pts or -0.38% and HSI eased 98.79 pts or -0.73% amid concern on rising crude oil prices. FKLI was off high in the second session resumed trading after Bursa halted the trading on the equities and derivatives market from 12:19pm due to technical glitch. The spot month contract ended 1.5 pts lower to settle at 909, which is 2 pts premium to the cash. Turnover for spot month contract reduced to 3,719 contracts from 6,075 contracts as investors tend to stay sideline and remain caution on US market closed for President’s day on Monday. On technical side, the chart is well supported at 905 (SMA100) and RSI is seen at 57.8.

We expect there will be a small rally FKLI in coming trading days as Malaysia government is planning to announce its stimulus package, which is believe can help to lift up the market sentiment. Besides this we can hardly find any other positive factors that are likely to lead the market gain, so FKLI maybe traded in tight range bound pattern. A better approach now is to go for long, investors may long around 905 levels with tight stop-loss at around 899 as breach below 900 may indicate bearish trend is on track. Resistance is at 915 while support is pegged at 905.

HAPPY TRADING

综合指数 2009年 02月 16日 / Composite Index 16/02/2009

综合指数 2009年 02月 16日

综合指数在上扬后再度调整，所幸的是综指精确的在905点的胜图自动费氏线获得扶持（参考图中箭头A），这是综指当前的技术支持水平，综指再下一道的支持水平则落在885-887点这两道胜图自动费氏线，综指目前的阻力水平则是处于937点的胜图自动费氏线。。

如图所示，布林频带（Bollinger）打开幅度出现了再度减低的格局，这显示综指目前还是有调整巩固的趋势。无论如何，只要综指继续的处于布林中频带（Bollinger Middle Band）这道动态支持水平以上的话，那综指还是有望继续的转强。

如图中箭头B所示，马股总成交量在综指回软时减少了25.4%，这显示投资者再度的受到外围因素影响而却步，无论如何，成交量还是成功的达到40天成交量移动平均线（VMA）的水平，这表示整体市场还是处于一个活跃的水平里。

如图中C圈所示，随机指标（Stochastic）再度在达到100%后回软，这显示综指的短期走势在出现过热（随机指标达100%）后再度在短期超卖下走低。无论如何，只要随机指标继续的维持在70%以上的话，那综指的短期走势还是未算是确定出现一个下跌的趋势。

总的来说综指目前在短期涨势中出现了技术调整，综指还是呈转强状态，不过接下来成交量若跌破40天平均值的话，这就意味着投资者开始回避股市，这是投资者对综指后市悲观或不明确的反应，届时综指的后市将会看低一线。

Composite Index Daily Technical Analysis 16/02/2009
As indicated by A, the KLCI remains supported by the 905 WinChart Automatic Fibonacci Retracement despite a slight pullback on Monday. Therefore, the immediate support for the KLCI is still at 905 while the next support is at 885-887 Fibonacci Retracement. Resistance for the KLCI is at 937 Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands Width is expanding at a slower rate, implying that the KLCI might be consolidating soon. Nevertheless, with the KLCI above the Bollinger Middle Band, the immediate outlook for the KLCI is still on the positive side.

As indicated by B, total market volume declined 25.4%, as investors are still being cautious. Nevertheless, volume on Monday is still above the 40-day VMA level, suggesting that the overall market is still relatively actively participated.

As circled at C, the Stochastic retreated after hitting 100%, suggested that the KLCI is having a healthy pull back as the KLCI was over-heated. Nevertheless, with the Stochastic still above the 70% level, the market movement for the short term is still bullish biased.

The slight pull back on Monday is considered normal. As long as the volume should remain above 40-day VMA level, the rally of the KLCI is likely to continue. However, if volume should failed to sustain at above the 40-day VMA level, it would be a sign of lack of confident in the market and the KLCI would have difficulties in sustaining its current movement.

HAPPY INVESTING & GOODLUCK2ALL

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HAPPY INVESTING & GOODLUCK2ALL

Dow Dragonfly unconfirmed

Dow Dragonfly unconfirmed
But KLCI may not follow Dow’s negativity

The KLCI and Asian equity markets got a little ahead of themselves when they rallied on the possibility of a potential bullish reversal with the emergence of the Dragonfly candlestick pattern in the Dow charts on Thursday. However, we have said before that this pattern requires a confirmation, and no confirmation was forthcoming yet when the Dow dipped 82.3 points on Friday and marginally went below the critical 7,882 support line.

7,882 break not a “true break” yet Before traders rush into selling their equities just right after buying them not too long ago, it might be worthwhile noting that the 7,882 break cannot yet be considered a “true break”. While the 7,882 bottom was “broken”, a 32 point margin cannot be considered a true break. The onus will be on the bears tonight to make this 7,882 break a true break by extending the margin of the break. What’s more, the selling volume last night was relatively sparse and unconvincingly bearish.

KLCI looking positive in the short term
As can be seen from the correlation chart above, the KLCI’s correlation with the Dow is tailing off over the last few weeks. So even if the Dow decides to retest its November bottoms, it is possible that the KLCI might not follow the Dow down, at least not too much. This implies a capped downside for the KLCI.

The KLCI now looks decidedly positive in the short term. After a collision and convergence of the red short term line and the blue mid term line, a long white candle generally confirms a strong upward direction ahead. What’s more, the KLCI has breached above the 890-900 resistance zone with conviction and high volume. Our view on the KLCI is now positive in the short term.

HAPPY INVESTING & GOODLUCK2ALL

KLCI bogged in a Dow quicksand?

KLCI : Cracked marginally above 890-900 Resistance, but will face Dow repercussions
The fortunes of the KLCI were turning positive yesterday when buying volume was increasing and it managed to crack above its 890-900 resistance level. However, the KLCI will be similarly hit by the negative overnight Dow. The direction of the KLCI will be
dependant on where the Dow goes these two nights.

Strategy : Wait and Monitor Dow tonight Considering the rather precarious and tricky situation of the Dow which is hovering merely 6 points above its critical 7,882 support, there is no other choice but to adopt a wait-and-see stance. We are watching the Dow closely tonight to see if this critical
support hold. If this support holds, there will still be hope for the bulls. If this support collapses, the Dow will be revisiting its November low of 7,449 very soon.

CAVEAT EMPTOR >>> Buyers Beware!!!

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DJIA >>> Is It A Rally Or Just Short Coverings?

A true rally or just short covering? The Dow is rallying because of an expectation of a bailout/stimulus package being presented on Monday, the 9th.

As prices rally into the resistance of what has been a formidable Wave, it’s likely this is a classic “buy the rumor, sell the news” scenario and traders should take profits on this move, not initiate a long position.

Point & Figure Chart: A type of chart consisting of columns of X's (showing price rises) and O's (showing price falls) arranged on a square grid. When the index increases, a rising column of black X's is created – a rally. When the index falls, a descending column of red O's appears – a decline. Read article on Point & Figure Charts.

Point and Figure Buy Signal: P&F Buy and Sell signals are very simple patterns that should be confirmed before placing a trade. The P&F Buy signal is used when calculating the various Bullish Percent indices. When the last signal on the chart was a buy signal, that is, the last breakout was a column of Xs going higher than the previous column of Xs and no sell signal (no column of Os breaking below the previous column of Os) has happened since the buy signal.

Point and Figure Sell Signal: P&F Buy and Sell signals are very simple patterns that should be confirmed before placing a trade. The P&F Buy signal is used when calculating the various Bullish Percent indices. When the last signal on the chart was a sell signal, that is, the last breakout was a column of Os going lower than the previous column of Os and no buy signal (no column of Xs breaking above the previous column of Xs) has happened since the sell signal.

Point and Figure Price Objective: The price that a stock should reach based on recent P&F chart signals. Price Objective is a simple calculations based on standard Point & Figure chart patterns. They are of questionable value but we include them on our charts because they have been used for such a long time. No TA users can makes no claim about their accuracy or usefulness whatsoever. For more on how they are calculated, refer Point and Figure Price Objectives.

What Does Kagi Chart Mean? A type of chart developed by the Japanese in the 1870s that uses a series of vertical lines to illustrate general levels of supply and demand for certain assets. Thick lines are drawn when the price of the underlying asset breaks above the previous high price and is interpreted as an increase in demand for the asset. Thin lines are used to represent increased supply when the price falls below the previous low.

An entry signal is triggered when the vertical line changes from thin to thick and is not reversed until the thick line changes back to thin. One important note about these charts is that they are independent of time and only change direction once a predefined reversal amount is reached.

Is The Dollar Topping?

An interesting result of the government bailout of the financials and automakers, along with the huge economic stimulus package will be the long-term impact on the U.S. dollar. Can the dollar maintain its relative value as interest rates fall and deficits mount? Let's take a look at a few charts regarding the dollar and how we can profit if the dollar does plunge. First, let's take a look at the long-term picture of the dollar:

As you can see, the long-term trend in the dollar is down. Unless the dollar can pierce through the 92-93 area, the intermediate-term trend is down as well. Only the near-term chart shows any positive action on the dollar. And that rally is suspect technically as shown below:

A bearish head and shoulders pattern formed from October through December and broke down below the neckline with force. Should the dollar fail to navigate the near-term resistance (retest of neckline) and the longer-term trend resumes to the downside, gold is likely to be a primary beneficiary. Gold is one commodity whose long-term uptrend remains intact because of the long-term downtrend in the dollar. Take a glimpse at the long-term chart on gold:

The dollar and gold have an inverse relationship that's quite evident when you compare the two charts. During periods of dollar strength, gold weakens. However, dollar weakness leads to gold strength. So the question remains: What happens to the dollar as a result of the massive government bailout and the economic stimulus package? Answer that question correctly and you profit. It's as simple as that.
Happy trading!