Thursday, January 26, 2012

Market Outlook as at January 26, 2012

Our market has been recovering cautiously after the selldown in July-September. This recovery is reflected in the medium-term uptrend line, SS. The recovery rally had encountered strong resistance which triggered sharp pullbacks. These pullbacks can be fitted into a 3-fan downtrend line, with the market currently testing the third fan-line (R-R3). With the negative crossover noted in the MACD indicator, there is a good chance that the rally will not be able to surpass the resistance at 1525. This could set the stage for a correction in the market. FBMKLCI may pullback to the medium-term uptrend line support at 1510 or the psychological 1500 level. A break below the 1500 level could lead to a longer consolidation in the market.

Based on the above, you should exercise careful discretion in your trading.

Chart: FBMKLCI's daily chart as at January 25, 2012 (Source: Tradesignum)


luckystock2 said...

Hi Alex,
Although our klse index and many of the 2nd and 3rd liners has been rising , but actually some of the bluechips like MHB , CIMB and Axiata are quite weak recently. What do you think about it?

Michael L said...

Hi Alex,

Happy Chinese New Year. Would like to check any potential for HWGB counter? Thank you.

Alex Lu said...

Hi Michael L

HWGB is not a profitable company. It is a penny stock that can rise only if there is a play. It was played up in October 2011 & January 2012. I think it is likely to drift for a while before the next play starts, if ever.

Alex Lu said...

Hi luckystock2

There are some selective rotational plays among the 2nd & 3rd liners. As you have noted, blue chip stocks are mostly sidelined, unless they were sold down earlier.

kelvin888 said...

Hi Alex,

Any comment on Manulife Bhd ?

Is it worth to accumulate at the current price for long term investment now ?

Thank you.