Thursday, May 31, 2012

Market Outlook as at May 31, 2012

FBMKLCI is surprisingly pressing against the short-term downtrend line at 1580. A break above this downtrend line would be positive. If nothing else, it would signal a pause in the selling and an opportunity for stocks to form a base.

Chart 1: FBMKLCI's daily chart as at May 31, 2012_4.20pm (Source: Quickcharts)

I have looked through the indices of all the sectors in our market. Finance, Trading Services & Industrial Products are presently pressing against their medium-term downtrend line, while Construction & Plantation indices have yet to test their downtrend line. The chart for Consumer Product is tricky, as the index is presently in a V-spike recovery after a V-spike drop. The only sectoral index which has broken above its downtrend line is Properties (see below).

Chart 2: Properties's daily chart as at May 31, 2012_4.20pm (Source: Quickcharts)


luckystock2 said...

Hi Alex ,
What's your comment on glove counters's performance on these few days?

Mat Cendana said...

BSKL's performance last Thursday where stocks were generally up when most other countries were significantly down was indeed a surprise. But it was down on Friday, in line with the others.

Europe and US stock exchanges suffered a drop on Friday after the Asian markets had closed. I'm wondering what's in store next week. The financial and political situations in Greece are already well-known but now there's another factor in the unfolding troubles of Spain.

The market will be volatile, which offers chances for short-term traders and also investors looking at the longer term. When there's a mini-panic, the prices of even the solid companies that shouldn't be affected much by what happens elsewhere tend to come down. This would be a great buying opportunity for those with the guts and holding power.

Alex Lu said...

hI luckystock2

Rubber glove stocks should be positive, with rubber latex dropping & USD rising.

However, looking through the sharts of the Big Four, only one has broken above their medium-term downtrend line. That stock is Supermx, which broke above its downtrend line at RM1.80. The other 3 stocks & their downtrend line resistance are:
1) Topglove- RM4.70
2) Harta- RM3.85
3) Kossan- RM3.15

Alex Lu said...

Hi Mat Cendana,

The global market will continue to be volatile. Compared to these markets, our Bursa looks like a calm bay, even a safe harbor. Nevertheless, beneath the calm water, we can see some shipwrecks. This is a warning for those who play the market recklessly. If it is tough to make money in a bull market, imagine how much tougher to do so in a bear market.

Good luck.