No update for the whole of next week

There will be no update for next week as I will be away for a holiday. With Dow dropping 367 points yesterday, this is one break that I am not looking forward to. If it is any consolation, I will say that the market has been anticipating this correction (why not? it's annual affair... now into its 20th anniversary) and, as such, one can also anticipate that those, who have shorted the market or who have reduced their position earlier, will be getting ready to add back their position or cover their shorts soon. I expect the Dow to find support at 13,200 and 13,000 level (see Chart 1).


Chart 1: DJIA's daily chart as at October 19 (courtesy of Yahoo Finance)

Yesterday, Digi.com and Topglove filed in their latest quarterly results. Both have reported very strong net profit that is pretty much within expectation. Digi.com has a 3rd net profit of RM273 million on the back of a turnover of RM1.11 billion. What surprised many was its huge interim dividend of RM1.00 per share. I expect the stock to test its all-time of RM25 shortly (see Chart 2 below).


Chart 2: Digi's daily chart as at Oct 19 (courtesy of Tradesignum.com)

Topglove has similarly reported a good net profit of RM26.8 million on a turnover of RM308 million for its 4th quarter. From Chart 3 below, we can see that the stock is trading very near its long-term uptrend line. Topglove could be a good BUY at RM5.80-6.00 level.


Chart 3: Topglove's daily chart as at Oct 19 (courtesy of Tradesignum.com)

Next week's trading will be very tricky. My biggest fear is that the Shanghai & Hong Kong stock markets may decide to take a break. After Wall Street and Bombay's recent sharp fall, that's the last thing we need. Scary thought but hopefully it is just that.