Thursday 29 September 2011

30th September 2011, Friday

FBMKLCI

Breaking 1400 or the end of the Technical Rebound?

The FBMKLCI staged a strong rebound, breaking through the Fibonacci level of 23.6% and closing the gap formed on 23rd September 2011 (please refer to the chart below). So, after the gap being closed, will the index heading towards 1400 level or this will be the end of the technical rebound?
I will not guess on the development until the situation being confirmed today. Currently, yet to have any signal that this is the end of the technical rebound thus the index may resume its upward trading until 1400 level.
Investors should take extra cautious on the budget announcement today, not expecting surprises from the budget, however, will this encourage the start of the sell-off after the budget announcement? Will Monday be the starting of the sell-off after the quarter end? I shall cover in detail in my next week’s report. Besides, we shall have a look at the development in Dow on Monday as well.


CIMB

Last Done Price: RM6.88

A lot of investors are asking whether can accumulate this stock for trading? Let us have a look at this stock from technical perspective as we know that there is no problem from fundamental perspective.
For me, I will not initiate a buy position at current level as my rule of thumb - the stock price must at least leap above the Bollinger middle band. Thus, if investors will like to initiate a position, the stock will need to trade above the RM7 convincingly with stop loss level being set around RM6.50 level, else, recent rebound can only be viewed as a technical rebound and it is not suitable to pick up the stock at this level.
I shall cover this stock in detail when there is a clear turning signal for us to initiate a buy position.


FKLI

Take the Opportunity to Dispose your Long Position…

Those who initiated long position, as per mentioned, please try to dispose it or at least reduce your position ahead of the budget announcement. We will not know what will happen to the market after the budget announcement, thus, investors should reduce your risk by holding less position. For risk averse investors, take a good rest ahead of the weekend as this is not a suitable situation to take risk.
Immediate resistance is seen at 1400 level, followed by 1410 level and the immediate support is seen at 1380 level, followed by 1370 level.  


FCPO

Time to Initiate Short Position?

The answer for the above - I would say “yes” for risk taker investors. As covered in my yesterday’s report, if the FCPO unable to hold convincingly above the 2900 – 2918 levels, investors can initiate short position with the stop loss level being set around 2950 level. The widening in the Bollinger upper and lower band coupled with the FCPO is trading below the Bollinger middle band is creating more weakness moving forward. The current trend is a downtrend after recent consolidation, albeit in a slower pace.
Immediate support is seen at 2850 level, followed by 2800 level and the immediate resistance is seen at 2910 level.






Wednesday 28 September 2011

29th September 2011, Thursday

FBMKLCI

Trading by Ourselves?

Yesterday, the FBMKLCI went against the regional markets (regional markets mostly closed in negative territory) and closed near to its day’s high. Will this trend continue even with the Dow dropped nearly 200 points yesterday? Hard to say whether the budget-rally will resume or not, however, I reiterate, I remain my view that this is only a technical rebound. Thus, investors should take this opportunity to take profit on your stocks.
The overall technical landscape never change – downtrend! The immediate resistance is seen at 1377 (Fibonacci level of 23.6%), followed by the gap created on 23rd of September - 1380 level (please refer to the chart below). The immediate support is seen at 1350 level, followed by 1330 level.
As for SP Setia, since it is being offered to be taken over and being suspended for the time being, I shall not cover any report on the stock’s outlook at the moment. Tomorrow, we shall have a look at CIMB stock, whether this stock is worthwhile to pick up now?



FKLI

Immediate Resistance – 1366!

The same technical landscape faced by FKLI as well, however, the FKLI faces the immediate resistance at 1366 – Fibonacci level of 23.6%, followed by the gap set on 23rd of September – 1370 level.
What should investors do? Those who have initiated long position, you can either choose to set your stop loss level slightly below 1350 level and continue to hold on to your long position until it expires this Friday or just take profit before the end of today (ahead of the budget announcement tomorrow).
For those who yet to initiate any position, I am still looking for opportunity to sell on strength rather than buying on weakness. If the FKLI unable to break through the 1370 level convincingly, investors can initiate short position with the stop loss level to be set around 1380 level, else, we just wait patiently for the opportunity to initiate short position.


FCPO

Change of Strategy…

Although the FCPO yet to show a clear market direction, I will like to revise my call towards the market. If the FCPO unable to sustain convincingly above the 2918 & 2900 levels, I will change my strategy to initiate short position rather than long position with the stop loss level being set around 2918 level. Reasons supporting my view (please refer to the chart below for reference):-
1)      The FCPO may take over the Fibonacci level of 38.2% convincingly.
2)      As per mentioned, if the FCPO broke through the range trading with downward pressure, the FCPO may resume its downward trading.
3)      The FCPO still trading below the Bollinger middle band with the upper and lower band widening – this is indicating the downward pressure will resume.


Tuesday 27 September 2011

28th September 2011, Wednesday

FBMKLCI

Technical Rebound Resume…

Overall technical landscape for FBMKLCI never changes and all my view towards the market remains until the end of Thursday. For detail, please refer to yesterday report. For today, the immediate resistance is seen at 1380 level, followed by 1390 level and the support is seen at 1350 level. I reiterate, investors should take this opportunity to scale up and take profit for your stocks rather than rushing to accumulate stocks for trading.
I shall cover SP Setia tomorrow if the stock can convincingly staying above the Bollinger middle band for today.



FKLI

Level to Long?

I believed most of the investors have taken your profit and are currently without any overnight position after the index reaching the support level that I am looking at two days ago (1300) and reaching the stop loss level that I have suggested yesterday (1350). So, what should investors do at the moment?
If investors decided to take a long position, I will not say “no”, however, please bear in mind that this long position should be closed before the end of tomorrow and with stop loss level being set around 1350 level. For risk averse investors, do not hold overnight position in this volatile market. We shall look into initiating short position when the index heading towards 1400 level or showing some weakness after the technical rebound. I shall cover this in detail in my report tomorrow.



FCPO

Back to Range…

As per mentioned in my report yesterday, if the FCPO managed to regain its posture above the 2917 level, the FCPO will resume its range trading with the range being widen to 2900 – 3070. The market remains uncertain as it is affected by stock markets and further volatility is expected to resume.
For risk taker investors, the only thing that you can do is to gain some profit within the range. Risk averse investors should not hold any overnight position as the direction is not clear for position trading.

Monday 26 September 2011

27th September 2011, Tuesday

FBMKLCI

1300 Level – Sustainable?

The FBMKLCI surprised us by trading near to the important support level that we are looking at – 1300 level, however, the index managed to recoup some of the losses and closed above 1330 level. Whether the 1300 level that we are looking able to be well-supported?
As I mentioned, predicting the market movement will not be part and parcel of trading, we just need to follow our trading rules set and trade accordingly.
Base on technical analysis, the index will able to sustain above the 1300 level, at least for this week as:-
1)      The index is trading deep into oversold territory, technical rebound is expected to set in.
2)      1300 is the Fibonacci’s level of 61.8%.
3)      1300 is the level that the index has suffered 20% from its high (1597).
4)      Ahead of the budget announcement on this Friday.
5)      Quarter end, thus window dressing may set in.
However, any technical rebound should serve as a level for investors to take profit on your stocks, especially the below 2 financial stocks.



MayBank

Last Done: RM7.51

As you can see, Maybank stock has been trading within the RM8.50 – RM9.00 range for nearly a year. However, the stock suffered a major breakdown last Friday, taken over the support level of RM8.35, SMA 200 and the Fibonacci level of 78.6%.
We will see further major retracement for this stock moving forward as this maybe the beginning of the sell-off, investors who owned this stock should take the opportunity to close your position on any technical rebound.
In view that the stock is trading into oversold territory, technical rebound is expected for the near term. This shall serve as the final opportunity to close your position/ scale up and take profit, especially on any rebound towards RM8.00 level. I reiterate, the technical rebound should serve as a level to dispose your holding, not a level for you to accumulate shares.
The immediate support is seen at RM7.15 level, if this level is being taken over convincingly, the next reliable support level can only be seen at RM6.45 level.


Public Bank

Last Done: RM11.82

Same situation like Maybank, the stock will start to suffer major retracement with the SMA 200 and the Fibonacci level of 78.6% being taken out convincingly. This is just the starting of the downward pressure and investors should take the opportunity to close your position on any technical rebound/ scale up and take profit, especially on any technical rebound towards/ above RM12.00 level. (Technical rebound is expected as the stock is trading into oversold territory)
The next reliable support can be seen at RM11.00 level, failure for this level to be supported will see the stock to retrace below RM10.00 level in the near future.

FKLI

Temporary Support – 1300 Level!

Similar to the underlying, the FKLI staged a strong rebound at the Fibonacci level of 61.8%, 20% retracement from its high and the psychological support of 1300 level. However, the strong retracement set in yesterday may indicate the 1300 level will not even able to give the necessary support for the near future.
However, I reiterate, predicting the market shall not be part and parcel of our trading, we just need to follow our trading rules closely and let the market determine the direction. With the budget 3 days to go and the index is trading deep into oversold territory, I am in the view that the index will able to support at 1300 level, at least for this week.
Investors should hold on to your short position and the stop loss level should be revised lower to 1350 level.


FCPO

Uncertainty…

The FCPO suffered the sell-off in tandem with the stock markets on the view that demand will reduce if the economic fall into recession. The FCPO broke through some of the important supports such as:-
1)      The downtrend line
2)      The Bollinger middle band
3)      The range trading
If the FCPO managed to regain its posture above the recent low (2917), the probability for the FCPO to resume its range trading will be higher, else, the FCPO may suffer further downward pressure. Risk averse investor should stay on bay with the current uncertainty, whereas risk taker investors can take a small long position if the FCPO able to break through the 2959 level (Fibonacci level of 61.8%, please refer to the chart 2 below) convincingly with stop loss level being set around the 2900 level.
The immediate support is seen at 2900 level, followed by 2857 level and the immediate resistance is seen at 2917 level, followed by 2960 level.

Chart 1


Chart 2

Sunday 25 September 2011

25th September 2011, Weekly Market Outlook

Summary

For detail, please click here.



Stock
Futures
FKLI
FCPO
Today Strategy & Stock Pick

For Risk Taker Stock:
Need to take note on Maybank’s selling pressure.
Risk Taker:
Hold on to your small short position.
Risk Averse:
Hold on to your small short position.
Risk Taker:
Can initiate long position for range trading if the FCPO can hold above the 2950 level.
Risk Averse:
-

For Risk Averse Stock:
-
Stop Loss
-
Risk Taker:
Revised lower to 1420 level.
Risk Averse: Around 1400 level.
Risk Taker:
2917 level
Risk Averse:
-
Market Direction
KLCI: Downtrend, expecting some technical rebound.
Downtrend, expecting some technical rebound.
Range Trading
Support & Resistance level

 KLCI:
S1: 1350
S2: 1300
R1: 1400
R2: 1423
Support:
S1: 1350; S2: 1300
Support:
S1: 2950; S2: 2917
Resistance:
R1: 1400; R2: 1420
Resistance:
R1: 3000; R2: 3032
Initial Margin
 -
RM5000
RM7000
World News

  • IMF promises to tackle Eurozone’s debt crisis.
  • Greece is being hit by 24-hour public transport strike.
  • World indices are expecting to resume its “bottom searching”.

Thursday 22 September 2011

23rd September 2011, Friday

FBMKLCI

Another 100 Points?

Yesterday, the FBMKLCI struggled to sustain above the important level that we were looking at (1404 – 1400 levels) and close at its day low of 1387 (a Marubozo(1) created). As per mentioned, if these levels are not able to be supported, overall market will resume its strong downtrend with the next reliable support level is seen at 1350 only.
Sorry to say that the probability for the index to trade towards 1300 is higher for now as in a bear market, we are expecting the index to retreat about 20%.
How furious will the bears be? Where is the reliable support level? Will the market really retreat to 1300 level? With the budget announcement exactly a week to go, can this help to cushion the downside? Can we pick up certain shares for short term trading? Is this the level to bargain hunt for long term trading? For detail analysis, I will cover in my next week report.

Explanation:
1)      Marubozu: In Japanese candlestick, Marubozu indicating a weak market where sellers fully control the price action and further weakness is expected.


FKLI

The same goes for FKLI, the index convincingly taking over the 1400 level, indicating the strong downward trading for the near term. As per mentioned, investors should initiate short position with the stop loss level being set around the 1400 level if the FKLI unable to sustain above the 1400 level. Risk takers investors should standardize all your stop loss level to 1420 levels (short position from 1500 level and the 1400’s short position).





FCPO

Range Trading Resume…

The FCPO resumes its range trading and trades at its lower range at this moment. Investors can remain to profit from the range trading with the stop loss level being set around 20 points. As per mentioned, nothing much to look at if the FCPO remains stuck in the range.
However, investors will need to take extra cautious of this sideways trading. As the period drags longer for the consolidation, the FCPO is facing higher risk of trading either direction very strongly. Thus, the breakthrough of either direction (either 3080 or 2975) will indicate the near term market direction that we shall be looking at.


Wednesday 21 September 2011

22nd September 2011, Thursday

FBMKLCI

Dented by DJIA?

Yesterday, the FBMKLCI staged a rebound and closed firmly above the important support level of 1404. It gave us some hopes for our bargain hunting at this stage. However, with the overnight DJIA suffered more than 2% of dropped (cause of divided opinion over the stimulus steps), will FBMKLCI decouple from the world indices and trade higher for the day?
No matter what, so long as the 1404 level is being well-supported, I think the market should be able to trade higher ahead of next Friday’s budget announcement. The support is seen at 1404 level, followed by 1400 level and the resistance is seen at 1423 level, followed by 1440 level.



FCPO

Waiting Eagerly!

The FCPO remains in the range trading of less than 100 points and “unwilling” to trade either direction at this moment. However, investors can remain to profit from the range trading until either direction is being taken out convincingly. The range remains at 3080 – 2975 levels.



FKLI

Opportunity to Long?

Investors can follow the FBMKLCI’s movement and initiate long position if the underlying is supporting well the 1404 – 1400 levels. The stop loss level shall be set at 1397 – 1392 levels. However, with the overnight risk that investors will need to suffer, risk averse investors should not hold too large a position overnight. The immediate support is seen at 1400 level, followed by 1380 level and the immediate resistance is seen at 1427 level, followed by 1440 level.

Tuesday 20 September 2011

21st September 2011, Wednesday

FBMKLCI

Reversal Signal?

Yesterday, the FBMKLCI traded so close to the 1400 important support level but rebounded from its low (1404) to close at 1410 level. From Japanese candlestick’s perspective, this is a hammer and it may represent a reversal is setting in after the recent downtrend. We shall have the confirmation today and eyeing for some stocks to accumulate for short term trading (ahead of the budget announcement and the election).
The immediate support is seen at 1400 level, followed by 1380 level and the immediate resistance is seen at 1423 level, followed by 1435 level.


FKLI

Ready to Long…

If the FBMKLCI is showing some reversal signal, we may take the same view for the FKLI. Investors should have a close monitoring of the market for today. If the cash (FBMKLCI) is well supported above the 1404 level, risk taker investors can initiate long position with the stop loss level to be set around 1396 – 1390 levels. Else, if 1400 is not being well-supported, risk taker investors should get ready to initiate short position with the stop loss level being set around 1400 level.
Immediate support is seen at 1400 level, followed by 1380 level and the immediate resistance is seen at 1427 level, followed by 1440 level.



FCPO

Struggling to Breakout!

The FCPO still struggles to breakout from the tight range trading of less than 100 points. As per mentioned, if the FCPO yet to break through the tight range trading, nothing much that we can expect except to profit from the range trading. Investors can resume to profit from the range by initiating short position if the 3080 level is not being taken out convincingly.