Bursa, HKEX & SGX have broken above their downtrend line

Bursa's selldown in the past 2 months has been extremely sharp. It dropped from a high of RM16.30 on January 14th to a low of RM8.05 on March 24th. Bursa has now broken above its short-term uptrend line and it may recover from this point. A 'Test of the Low' at RM8.05 could happen given the current weakness in the market, as noted in earlier post.


Chart 1: Bursa's daily chart as at April 2, 2008 (courtesy of Quickcharts)

It is good to note that 2 other stock exchange companies in this region have similarly broken above their respective medium-term downtrend line. From Chart 2 below, we can see that HKEX has broken above the downtrend line at HKD135 level on April 2, while SGX has done the same at SGD7.00 much earlier. In fact, both exchange companies had a good rally yesterday, with HKEX gaining HKD5.60 to close at HKD148.50, while SGX rose by 56 cents to close at SGD8.86.


Chart 2: HKEX's daily chart as at April 2, 2008 (source: Yahoo Finance)



Chart 3: SGX's daily chart as at April 2, 2008 (source: Yahoo Finance)

The current weakness in the market could be a good opportunity for long-term investors to slowly accumulate Bursa shares. I believe Bursa is a good BUY at the RM8.00-9.00 level.