Thursday, May 8, 2008

market trend: parting with experience..

When i started this blog last month, some of my best pals suggested that i could use this platform to express my view on our local bourse and perhaps i can turn this blog of mine into a money spinning machine. Haha... I must thank them for the faith they have in me.

But rest assured, this is not my intention to spin money out of my blog nor am i trying to seek fame through my posts. This is the platform where i can pen down my opinion or thoughts. It is more like a log to register what i think of things and events that happen in front of me daily.

My master once told me this.. ' to survive the stock market, one have to look beyond the nose' which actually means one have to be able to look one step ahead. And this is no easy task with the ever changing economic climate where uncertainty looms especially so these days with the crude prices hitting record highs weekly and now the food commodities rising more than 200% in recent weeks. The wrath of inflation is beginning to rear its ugly head...

Before i start, please let me qualify myself that all comments and opinions expressed here and thereafter are purely opinions out of my own judgement and are expressed without malice. Therefore, i cant be held responsible for any liabilities that in any event, should arise from the publication of this post. The posting of my commentary shall be at my discretion. However, i do entertain request, comments from those who begs to differ and help from those wants to offer.

Our bourse CI hit a double top high of 1524 on 11th January and 15th January and went into a correction and consolidation cycle with a low of 1157 being set right after the 12th general election. From there, our CI have been inching up on a monthly basis with a high of 1305 being set on 29th April. Since then, it has corrected to a low of 1271 and have been range bound till today.

On the bigger picture, there is a head and shoulder formation. That means there is a risk factor involve here that our market may turn down and test lower with a critical support at 1238. To get out of this head and shoulder formation, our CI need to break higher to test the 1340 level. Instant indicator will be the breaking of 1296/97 level.

The chances of breaking out from uncertain trend is everybody guess. However, since we are at the tail-end of the consolidation cycle, i would say that our CI is going to test higher with a cap at 1340 or 1385 (preferably) depending on the momentum when it happen. Prevailing indicators remains positive despite the setbacks of our government policies and the world economic climates.

One more important factor is that our bourse is not moving in tandem with the international bourses. which means we are very much on our own now. Foreign funds are adopting a 'wait and see' attitude on Malaysia. As far as i can see, foreign funds had sold down to their base holding and they are nibbling back on stocks with viable businesses and good governance.

Despite all that i have painted here, i remain positive for short and medium term.
That's all till my next update.

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