Posted by 03pm > 2012-07-29 03:27 | Report Abuse

BEARISH-PANIC 26 JULY 2012 CI 1623 (A MERE DROP OF 9PTS SEND THIS GUY FROM BULLISH CAMP INTO BEAR CAMP, HAHAHA) Market Outlook as at July 26, 2012 FBMKLCI broke its 2-month old uptrend line yesterday. It failed to recovered above that uptrend line today. In the afternoon session, it continued to slide. This could signal the start of a correction similar to May 2012 or November 2011. It will soon test the 50-day EMA line at 1604. A breakdown of this support as well as the psychological 1600 mark could lead to a selldown where the index could hit lows between 1572 & 1556 (arrived at by way of a 2-3% horizontal downshift of the 50-day EMA line). Posted by Alex Lu at 7/26/2012 04:53:00 PM BULLISH 24 JULY 2012 CI 1632 (AT 1645 BEARISH, A DROP OF 13PTS SEND THIS GUY FROM BEAR CAMP INTO BULL CAMP. FBMKLCI is now testing its medium-term uptrend line at 1628-1630. I expect a rebound from this level. Failure to do so could send the index to the horizontal line at 1608 & the psychological 1600 mark. Posted by Alex Lu at 7/24/2012 10:43:00 AM BEARISH 18 JULY 2012 CI 1645 (CI HAD RISEN 50PTS THE DONKEY STILL BEARISH) (AGAIN, DONKEY THINK ITS THE ELECTION THAT FAKE THE MKT. THEN WHY DO TA OR FA? BETTER GUESS THE GOVT WANT TO PUSH UP WHICH COUNTER BETTER) FBMKLCI & FBMEMAS are both pressing against the line connecting the 'high' over the past 18 months. From the FBMKLCI weekly chart, we can see the uncanny similarity in the price chart & the indicators between the current period & that's experienced in early 2008.What to do? If this is the final pre-election rally, then we must be careful not to hold too much shares when the local funds pull the plugs or take their profit. If the previous election can be a guide, the profit-taking will come before the announcement of the dissolution of Parliament. With Hari Raya Aidilfitri likely to be celebrated on August 19-20, National Day will fall on August 31 & Malaysia Day will fall on September 16, I think the dissolution of Parliament will only happen in late September. If that is the case, then the current rally could last for a few more weeks. On the other hand, if the Government planned to dissolve Parliament right after Hari Raya Aidilfitri, then the rally could end much earlier. Based on the above analysis, you should reduce your exposure to the market or take profit steadily during the interim period of 1-3 weeks. Good luck! Posted by Alex Lu at 7/18/2012 02:26:00 PM BEARISH 26 JUNE 2012 CI 1594 The present market rally is driven by local fund managers, especially those with close tie with GLCs. Foreign funds had been selling for the past few weeks, even months. Retail players would not be a big factor in the present run-up as many have been badly mauled by the sharp consolidation among 2nd & 3rd liners in the past 3 months. The current market is very similar to what we saw in July 2011 or even January 2008. When you compared the strength of the blue chips (as represented by FBMKLCI) and the weakness among the 3rd liners (as represented by FBMFLG), we can see that the divergence between the two indices. FBMFLG has acted as a canary in a coal mine- warning us that the light at the end of the tunnel is an oncoming train. Is it the same this time around? Posted by Alex Lu at 6/26/2012 03:11:00 PM BEARISH 19 JUNE 2012 CI 1594 (ASK PPLS TO DISPOSE ALL THEIR SHARE, ONLY TO ASK PPLS TO BUY BACK 5 WEEKS LATER AT HIGHER PRICE) How far can this rally go? From the weekly chart below, we can see that FBMKLCI & FBMEMAS would encounter the resistance from the expanding triangle, ABCD at 1620 & 11000, respectively. We have seen similar pattern before & the outcome was a draw- an upside breakout in 2010 & a downside breakout in 2008. Would the market do an upside breakout like 2010 or would it be a downside breakout like 2008 (when the world was gripped by the US Financial Crisis)? I am inclined to believe that the latter scenario may be more likely than the former. As such, I think it is advisable to sell into strength if the market continue to rise over the next few days. Posted by Alex Lu at 6/19/2012 05:38:00 PM BEARISH 15 jUNE 2012 Based on the above technical outlook, we should underweight the Plantation sector. Posted by Alex Lu at 6/15/2012 02:52:00 PM BULLISH, 11 JUNE 2012 Based on the above, I believe that we can begin to build our buy list of beaten down stocks. Posted by Alex Lu at 6/11/2012 04:12:00 PM