Chart 1: KNM's weekly chart as at June 6, 2011_4.00pm (Source: Quickcharts)
Chart 2: KBunai's weekly chart as at June 6, 2011_4.00pm (Source: Quickcharts)
Chart 3: HWGB's weekly chart as at June 6, 2011_4.00pm (Source: Quickcharts)
Some say that the end of a bull market is often characterized by the sell-off in the weaker stocks. With that in mind, I have studied the charts for FBMFLG & FBMSCAP and compared them to FBMKLCI & FBMEMAS when our market peaked in 2008. We can see that the 10-week SMA line for FBMFLG & FBMSCAP cut below their respective 20-week SMA line earlier than in the case of the blue chips index, FBMKLCI or the broader market index, FBMEMAS.
Table: Indices, with dates when the 10-w SMA line cut below the 20-w SMA line
[Note: I did not include in FBMACE because it started in September 2007, which does not have sufficient data for my study].
While it is dangerous to rely only on one observation to support this hypothesis, however reasonable it may seem, we should take it as a warning if we were to observe a similar event again. And, it so happened that the 10-week SMA line looks poised to touch (or, even cut below) the 20-week SMA line for FBMFLG & FBMSCAP. Is this an early warning of the end of the bull market? Let's wait & see.
Chart 4: FBMFLG's weekly chart as at June 6, 2011_4.00pm (Source: Quickcharts)
Chart 5: FBMSCAP's weekly chart as at June 6, 2011_4.00pm (Source: Quickcharts)
Chart 6: FBMKLCI's weekly chart as at June 6, 2011_4.00pm (Source: Quickcharts)
Chart 7: FBMEMAS's weekly chart as at June 6, 2011_4.00pm (Source: Quickcharts)
6 comments:
Dear Alex,
Did u called to buy citi @ USD48 & MEGB @ 2.12 ?
I got this from >
http://samgang.blogspot.com/2011/06/v-didnt-i-told-u-not-2-touch-call.html
So, do you think this is the end of bull market? Many stocks have back to their 52 months low while some shoot up to highest.
time to sell fkli? any idea?
Hi ronnie,
Thank you for bringing this to my attention. I replied by way of a post because I think all my readers and the general public deserved a complete & honest answer.
Hi Alex
Does this mean HWGB is still heading south in the near term? and what abt longer term?
Pls comment.
Thanks
Hi PY
Yes, HWGB is still heading south in the near term. The immediate support would be at horizontal line RM0.40 & thereafter at RM0.37, RM0.33 & RM0.30.
For medium to long term, the stock may benefit from successful implementation of its new business of tin mining. Having said that, I am always wary of companies that over-promised but under-delivered. HWGB is one such company.
HWGB's recent rally could be a flash in the pan as the stock was range-bound for the past 6 years between RM0.15 & RM0.25. If it does not show any result from this new tin mining venture, I would expect the share price to languish thereabout again.
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