Hidden inside every chart is a story. A story about where the price has been and where it might go in the future. Some stories are obvious. Others are a little more difficult to figure out.
Indices Updated : 06:59:05
Wednesday, February 27, 2008
Political uncertainty
KLCI ends +0.1% at 1376.62 in thin volume, led by Gamuda, as concerns over company prospects ease after Managing Director Lin Yun Ling assured investors he will stay to lead the group for at least another five years. Some 778 million shares changed hands, market breadth positive with gainers marginally beating losers 370 to 361. Benchmark index tipped to trade within 1367 (200-day moving average) and 1384 (5-day moving average) range tomorrow.General lackluster trading is due to the lack of any positive catalysts to boost the market. Most foreigners are staying on the sidelines until the political uncertainty is cleared after the elections.
KLCI +0.2% at 1372.95 in thin volume, off intraday high of 1382.76 as profit-taking accelerates; market breadth now negative with decliners outpacing gainers 374 to 292, led by declines in technology, finance and select blue-chip stocks. Benchmark index tipped to rebound. This morning's rebound provided the ideal opportunity for short-term investors to capitalize on intraday speculative trades.Profit-taking is likely to persist, however due to oversold condition, a technical rebound is expected.
RANHILL Rebound toward RM2.00 (resistance level) is expected. Cut loss level at RM1.63
KLCI ends +0.1% at 1370.79 in modest volume, recovering from intraday low of 1364.56 on mild bargain-hunting by local funds, say dealers. Market breadth ended negative with decliners outpacing gainers 459 to 259 weighed down largely by selling pressure from foreign funds and short-term retail investors. Benchmark index tipped to trade within 1367 (200-day moving average) and 1380 range tomorrow. Foreign funds continued to sell into strength, taking advantage of the early strength in stocks. Hopefully there will be a technical rebound tomorrow.
(Photo Caption: Someone sent to me the pix, and I really don't even know who is the woman next to Johor MB Ghani Othman - but for sure not his wife, right!!)
KLCI ends down 1.8% at 1369.48 in moderate volume, rebounding off intraday low of 1354.71 on mild bargain hunting by local funds, say dealers. Market breadth negative with decliners trouncing gainers 610 to 166. Dealers say buying interest from local funds helped pare losses. Volatile trade expected next week, tipping KLCI to trade in 1360-1400 range as investors sell into any rallies. The confluence of poor corporate results, declines in regional markets and the retreat in U.S. markets overnight, triggered the sell off. Foreign funds were net sellers.
SUNRISE Gua mau bet ini kaunter la. A rebound is expected. Cut loss level RM2.05, Buy on dips.
KLCI down 1.7% at 1390.21 in thin volume, dragged by Gamuda's (5398.KU) 16.5% decline to MYR4.16, foreign funds' selling pressure on blue chips and index-linked heavyweights. Market breadth deeply negative with decliners outpacing gainers 520 to 104. Sustained selling pressure likely to drag benchmark index down toward 1382 (Dec.18 low). Today's market action has resulted in the KLCI taking out the 30- and 100-day moving average support levels. Technical indicators point to further declines in coming days.
KLCI ends +0.9% at 1425.49 in moderate volume led by gains in select heavyweights, plantation stocks and some construction plays. However, market breadth turned negative with decliners outpacing gainers 389 to 293 as retail investors locked-in profits in small cap stocks and lower liners. KLCI tipped to trade in 1420-1432 (30-day moving average) tomorrow. It was a choppy day but record high crude palm oil prices helped lift plantation stocks while speculative buying interest drove construction and shares of some government-linked companies marginally higher. Investors are likely to take their cue from Wall Street's performance tonight.
Need to be done, has to be done - Say No to Khairy
"But I told myself that someone must try and stop this attempt to form a Dynasty in the Malaysian government. If there's someone better to do it, I'll step aside and let that someone contest against the Dynasty. If not, I'll do it." - CheGu Bard
February 14, 2008 -- IF you still don't believe me that the US government has an organization called the Plunge Protection Team that intervenes in the stock market, consider this:
* A former Federal Reserve official proposed just such a market-rigging operation decades ago.
* US Treasury Secretary, Hank Paulson, publicly brags that he has revitalized a group that some - including me - thinks is capable of rigging the market.
* Paulson has admitted on TV that he regularly discusses financial trouble spots with "market participants," perhaps even at the Wall Street firm he once headed.
* A former official of the Clinton Administration confessed on television that a rigging operation existed at least 10 years ago - I personally have discussed this sort of effort after 9/11 with a Fed official.
If you still don't believe, then read this story written from Brussels the other day by Reuters and pay special interest to the part that I highlighted.
BRUSSELS, Feb 11
(Reuters) - Finance leaders from the Group of Seven industrialized nations discussed collective action to calm markets if price moves become irrational, Eurogroup Chairman Jean-Claude Juncker was quoted as saying on Monday.
Juncker, who chairs the Eurogroup - the monthly meetings of euro zone finance ministers and the European Central Bank - told the Luxemburger Wort newspaper in an interview that turbulence on financial markets could continue for months.
"We are not yet at the end of the market crisis," Juncker was quoted as saying. "The corrections will drag on for a few weeks, months.
We have agreed in Tokyo that if there are irrational price movements in the markets, we will collectively take suitable measures to calm the financial markets," he said.
Asked what form such collective action may take, he said:
"Whoever has a strategy, should not set it out. Otherwise it will lose its effect if it is explained."
Finance ministers and central bankers from the G7 - the United States, Canada, Japan, Britain, France, Germany and Italy - said on Saturday in Tokyo that financial-market turmoil was serious and persisting.
There are justifiable motives for coming to the aid of a crippled bond market, and even a panicked stock market.
And there are even circumstances when outright rigging the stock market would be a noble gesture - like after the terrorist attacks in the US.
And I can even understand that such an operation needs to be secret, as Juncker suggests.
But there are serious drawbacks.
First, a clandestine rigging operation corrupts the free market operation that is the foundation of this country's financial system.
And there is the very real possibility that such an intervention will be abused for private gain.
But the worst problem is this: if stocks are jacked up to unreasonable levels through intervention, anyone buying the pumped-up stocks stands to lose lots of money.
And the small circle of people who know what's going on will be spared.
Juncker has now spilled the beans. If you are a small investor, be careful you don't slip on them.
And I have this question for my fellow members of the press.
Paulson has repeatedly mentioned in speeches the activities of the Plunge Protection Team, which is officially known as The President's Working Group on Financial Markets. But he's never specific.
I've asked to interview Paulson but he continues to refuse, even though he regularly appears on TV and even re cently was quoted in a major puff piece in The New York Times.
Why hasn't any journalist yet asked him about the Working Group's role?
Is Paulson only granting interviews to reporters who agree not to bring up that sensitive topic?
*
The Dow scored triple-digit gains on both Tuesday and yesterday, which is not surprising since it is options expiration week.
I documented last year that these big gains tend to happen in weeks when options and futures contracts are about to expire and traders desperately try to roll them over profitably into new contracts.
The big gains happen, that is, unless some major bad news event confounds traders' ability to move stocks higher.
The next options expiration occurs on Thursday, March 20 - one day earlier than normal because of the market holiday on Good Friday.
And the March expiration is one of those triple witches - when index options and futures as well as regular stock futures all expire.
If you feel like playing along at home, get ready for another short-term trade that week.
*
It's great that the big thinkers are trying to keep people from losing their homes by changing the terms of defaulted mortages.
But these humanitarian efforts have a price.
Remember, investors own most of the mortgages that Washington is planning to adjust or temporarily keep out of default.
If future investors don't trust the deals they are getting on these mortgage-based securities, they either won't invest in home loans or they will demand higher interest rates to compensate for the increased risk.
So everyone could end up paying higher rates to borrow money in the future.
And that's not going to help revive the housing market.
KLCI ended +0.9% to 1436.10, led by heavyweights, supported by gains in plantations stocks as crude palm oil prices hit record-highs; consensus is index will test next resistance of 1450 tomorrow.
KLCI ended +0.4% at 1423.15, led by gains in government-linked companies, as investors bet they stand to benefit from election-mandated projects. PM Abdullah Ahmad Badawi announced dissolution of parliament midday Wednesday, paving way for general elections possibly in mid-March. Volume traded moderate with 1 billion shares changing hands but market breadth ended negative with losers outpacing gainers 561 to 273 as retail investors locked-in profits. Index tipped to stay in 1410-1430 range tomorrow. Historically, the market has recorded a pre-election rally and tends to hold up for 1-2 months after the actual date is announced.
Goodnews: U.S. stocks rose for a second day, led by financial shares, on expectations Warren Buffett, the world's No. 1 investor, will help calm credit markets by offering to shore up bond insurers' finances. Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., the three largest U.S. banks, climbed after Buffett said he's willing to take on $800 billion in municipal bond obligations in an interview with CNBC. Monsanto Co., the world's biggest seed producer, advanced for a third day on an increased profit forecast. The Standard & Poor's 500 Index added 20.93 points, or 1.6 percent, to 1,360.06 at 11:04 a.m. in New York. The Dow Jones Industrial Average advanced 210.13, or 1.7 percent, to 12,450.14. The Nasdaq Composite Index climbed 27.51, or 1.2 percent, to 2,347.57. Almost six stocks rose for every one that fell on the New York Stock Exchange. Shares in Europe and Asia also gained. - Bloomberg 12.27 am (Malaysia)
Before that: KLCI ends +0.7% to 1417.52 today, led by gains in plantations and large-cap stocks, as investors bet some shares have become undervalued relative to potential earnings. The selling yesterday was overdone and some of these stocks are looking attractive. Index tipped to stay in 1400-1420 range tomorrow. Trade remained choppy for most of the day with retail players locking-in profits on rallies.
KLCI ended down 0.6% to 1407.38, off intraday high of 1418.56, led by declines in large-cap stocks and profit-taking in mid to small-cap stocks as investors stay cautious ahead of release of economic data from U.S. later this week. Volume traded thin with 620 million shares changing hands; market breadth ended negative with decliners outpacing gainers 486 to 239. Index tipped within 1400-1420 range tomorrow. Investors remain cautious in anticipation of less-than-rosy (U.S.) retail sales data.
KLCI closes down 1.1% at 1415.94 on continued profit-taking on Wednesday ahead of Lunar New Year holiday Thursday and Friday; KLCI tipped to trade between 1350-1380 support band and 1420-1450 resistance band next week. We've seen so much volatility in the U.S. market in the first five weeks of the year, nobody would dare bet where the Dow would be heading.
SINGAPORE: Forget about graphs, charts and economic forecasts. Wary investors in Asia are turning to feng shui masters to tell them which way the markets will head in the Chinese Year of the Rat.
Perhaps not surprisingly for investors already burnt by recent stock market slides, feng shui experts are predicting a gloomy year for shares, not good news for those hoping for a rebound in global markets hit by worries over the US economy.
"The rat will become aggressive at the tail end of the year and its underlying water element will cool the stock market," said Vincent Koh, a feng shui master at Singapore Feng Shui Centre.
Feng shui is popular across East Asia, where it is traditionally practised by ethnic Chinese. It relies on movements of the cosmos as well as placement of furniture and arranging space to generate a "flow of wealth". Believers say it can be used to improve wealth, health and personal relationships.
In Hong Kong and Singapore, it's taken so seriously that corporations consult feng shui experts about everything from business strategy to interior design. Disneyland changed the angle of the main entrance of its Hong Kong theme park after consulting a feng shui expert.
So great is the interest in feng shui, that CLSA, a regional brokerage house, issued a feng shui client note which predicted the stock market would rise from May to August and the US dollar would remain weak.
"Be mindful of your speculations, especially in the third quarter," said the note, which CLSA described as "topical" rather than a formal investment advisory.
Raymond Lo, a feng shui master in Hong Kong, expects industries linked to earth and metal signs to flourish during the Year of the Rat.
"The rat is a symbol of money to the earth industry ...Strong water element in the year indicates productivity and strong activity in the metal industries," said Lo, who suggested investors put their money into property, mining and gold.
He predicts stock markets will be soft this year as the elements of earth and water, which he says are strong in the Year of the Rat, weaken the fire element that influences shares.
With stocks markets from Japan to New York cooling since the start of the year on concerns of a global economic slowdown, sceptics may argue that you don't need to be a feng shui master to make such predictions.
Yet Malaysian feng shui master Yap Boh Chu is optimistic with predictions that Southeast Asian markets will be stable after a tumultuous start.
"The whole concept we have for the year is the image of a seed sprouting from the ground - the beginning is hard," he said.
Lim, a dealer at a Singapore brokerage house, has his fortune read annually at the start of the Chinese New Year and he adorns his office with bull figurines in the hope of a bullish market.
He is a big believer in Ba Zi or "four pillars of destiny", Chinese fortune telling that uses the date and time of birth to determine your life path.
However, despite his superstitious beliefs in bulls, Lim's investments have taken a hit as Singapore's benchmark Straits Times Index has fallen 15 per cent since the start of the year.
"I can't say that it works or it doesn't work - when the market is down, there's not much you can do to not lose money," Lim said.
Terence Tea, chief executive of copper recycling firm Advance SCT, gets feng shui masters to vet his firm's blueprints before construction begins on new offices, factories and other facilities.
But despite his devotion to the art, he admits that feng shui is not entirely responsible for his wealth and success.
"I think feng shui has helped my business, but being hardworking is fundamental," Tea said.
Many may be sceptical that feng shui or other fortune telling can bring in riches. And even the faithful in the financial community realise its limitations.
"Unfortunately we have no predictions on who will win Euro 2008 or who will be the next US president," CLSA said in its feng shui report. - Reuters
KLCI closes +0.9% to 1432.35, led by plantations stocks, as investors bet earnings will benefit from record-high CPO prices. The shortage of soya is pushing demand for palm oil to unseen price levels. The benchmark CPO futures soared to record-high of almost MYR3,500/ton today. KLCI tipped to trade up to 1450 level this week, partly due to buying ahead of an expected post-Chinese New Year rally. The market will be closed Thursday-Friday for the break. Volume at 834 million shares. The stock has run-up quite a bit over the past week or so, naturally there are some profit-taking.
KLCI closes +1.9% to 1419.66, led by large-cap companies, as investors shore up stocks in anticipation of a rally ahead of the upcoming general election and Chinese Lunar New holiday. The index will trade up to around the 1450 level this week with upside buys ahead of the Chinese New Year and expectation of a pre-election rally. The market will be closed Thursday-Friday for Chinese New Year break.
KLCI ends +0.7% at 1393.25 in thin volume, rebounding from intraday low of 1379.97 on mild bargain-hunting in select blue chips, plantations, construction and government-linked stocks. Market breadth turned positive in late trade with gainers leading decliners 360 to 340. Market likely to drift in 1380-1420 range next week in follow through buying interest. Markets closed Friday for City day. The US Fed's move to cut rates by 50 bps overnight and weaker-than-expected fourth quarter GDP growth of 0.6% in the U.S. heightened concerns over slowing global economic growth. However, value has emerged in stocks with greater reliance on domestic consumption and local funds capitalized on this.
HUBLINE Due for a rebound. Cut Loss Level 40 sen.
KIMBLE Also due for a rebound. Cut Loss Level 25 sen
I'm a hardcore Technical Analysis Trader in the Malaysian stock-broking industry. This is a personal weblog, reflecting my personal views and not the views of anyone or any organization. THIS BLOG ALSO DEDICATED TO MY SUBSCRIBERS WHO HAVE ENCOURAGED ME AND TO THE THOUGHTFUL TRADERS WHO DESIRE TO FOLLOW PRACTICAL RULES FOR TRADING INSTEAD OF GUESSWORK AND GAMBLING METHODS.
KLCI ends +0.1% at 1376.62 in thin volume, led by Gamuda, as concerns over company prospects ease after Managing Director Lin Yun Ling assured investors he will stay to lead the group for at least another five years. Some 778 million shares changed hands, market breadth positive with gainers marginally beating losers 370 to 361. Benchmark index tipped to trade within 1367 (200-day moving average) and 1384 (5-day moving average) range tomorrow.General lackluster trading is due to the lack of any positive catalysts to boost the market. Most foreigners are staying on the sidelines until the political uncertainty is cleared after the elections.
