CI's bigger picture

The market has surprised many, even bullish observers like me. From my last post, you could see that I was still concerned that the CI would have a tough time holding above the 1000 mark. Well, the market has proved me wrong but I am not complaining. I am surprised by the slew of revised targets for the CI from all the stockbroking firms. One of the most bullish target was offered by OSK's MD, Mr. Ong Leong Huat, who expects the CI to break its all-time high of 1332.04, recorded on Jan 5, 1994. This is even more bullish that my target made in my post dated October 16, where I have commented that "... a mild rally lasting 5-7 months could put the CI to 1182 level. I dare not extrapolate where the CI would be if we have a super rally instead."

From the monthly chart below, we can see that the CI will be coming up against the 1060 resistance next. Since the market has run up quite sharply in the past few days, I believe that its could be due for a minor correction. One of the possible reasons for this current rally could be the ongoing UMNO assembly but this assembly will be ending this week end. Personally, I do not subscribe to the idea that the current run will end with the completion of the UMNO assembly but, if the market needs a rest, it will use any excuse to do so. And, this market could do with a short rest.



Chart: CI's monthly chart as at Nov 16

Have a nice week end.