Market is at a crossroad

In the earlier post entitled " CI broke above 935", I have commented that the improvement in the CI was a broadbased recovery and not only due to the strong performance of the Plantation sector. Based on outdated statistics from the May 2004 issue of the Investors' Digest, the Main Board's overall market capitalisation were contributed mainly from 4 sectors i.e. Trading Services (38%), Finance (22%), Industrial Products (10%) & Consumer Products (9%).

From the daily charts of these 4 sectors (see Chart 1 to 4 below), we can see that all the 4 sectors have recovered substantially from their recent lows but are now coming up against either a strong horizontal resistance (in the case of the Finance sector) or their short-term downtrend (for the other 3 sectors). The big question is whether they can surpass these resistances. I believe that they may not be able to break above these resistances and consequently, the CI is likely to pull back to the congestion area of 920-935 levels.

















Chart 1: Trading Services' daily chart as at July 27

















Chart 2: Finance's daily chart as at July 27


















Chart 3: Industrial's daily chart as at July 27

















Chart 4: Consumer's daily chart as at July 27