Chart 1: KLCI's daily chart as at Oct 1, 2009_4.45pm (Source: Quickcharts)
Similarly, the Emas index (again, short for FBM-Emas index) broke below its medium-term uptrend line marginally yesterday. The recovery today has not pushed it above the uptrend line. For both KLCI & the Emas, the MACD indicator has hooked down, while the RSI is resting on its uptrend line.
Chart 2: Emas' daily chart as at Oct 1, 2009_4.40pm (Source: Quickcharts)
Based on the non-confirmation between the two main indices, one should adopt a cautious stance in this market. It is possible that the market may resume its uptrend again after a few days of listless trading. On the other hand, if the KLCI were to weaken significantly in the days ahead (say, breaking below the 1200 level), I believe the uptrend for our market has ended. In such situation, you would be well served by reducing your exposure in the market until clearer signs emerge again.
4 comments:
Hi Mr. Alex,
What about the trend of crude oil & CPO ?
Apperciate your feedback.
Thank you.
BR.
hi alex, could you also comment on ijm-wr? is it worth it? tq
Hi JR,
Both Crude Oil & CPO are trading sideway for now. Crude Oil may weaken while CPO may strengthen.
HI Maxwealth88,
IJM-WR is the rights to subscribe for a new warrant for IJM, presumably known as IJM-WC when listed. The exercise price of IJM-WC is RM4.00. The subscription cost for IJM-WC is RM0.25. As it is now trading at about RM0.585 (as at 4.45pm), a person buying it now will be getting IJM-WC at total cost of RM0.835. This means it has a premium of 7.4% when compared to IJM currently trading at RM4.50.
I think that it is a reasonable premium to pay for an IJM warrant.
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