Monday, May 07, 2012

Market Outlook as at May 7, 2012

Politics dominated the news over the weekend. With incumbency losing power or influence in France & Greece (here & here), the Eurozone sovereign debts problem is again back in the forefront. The rhetoric across Europe speaks more & more for the need to generate growth instead of the austerity measures championed by the German. In addition, we have to contain with the poorer-than-expected employment report in US (here & here). These two factors are likely to have negative impact all equity markets, including ours.

From the daily chart below, we can see that FBMKLCI is still in a medium-term line, with resistance at 1594-1595. Given the negative factors as mentioned above, the current rally will probably not attempt to test this downtrend line soon. The immediate support for the index will be the horizontal line at 1590 & then at 1565.

Chart: FBMKLCI's daily chart as at May 4, 2012 (Source: Quickcharts)


konchy said...

Hi Alex,

There's a website full of articles that teach Technical Analysis. Something to share with other readers. I think it's quite useful

Especially this one:


luckystock2 said...

Hi Alex,
What's your opinion about Tasek ? Look like having a breakout for me .

Anonymous said...

Hi Alex

Can you comment on Tambun and just listed Tambun-OR (2 right at 50sen + 1 free warrant with conversion at 60sen)? What is fair value?

Based on current-OR at 7sen and Tambun 52sen, market effectively value upcoming warrant at 10sen, or 35% premium upon listing. Compared to other newly listed warrant like Ivory, first day listing command 70% premium.

Tambun is also going to declare dividend of 3.8sen TE soon, give rise to net yield of 7.3% and its upcoming Q1 result may also serve as catalyst as progress billing of its 75% sold properties last year will start kick in

Alex Lu said...

Hi konchy

Thanks for sharing. I will check it out.

Alex Lu said...

Hi luckystock2

Tasek has surpassed the psychological RM9.00 level. The stock's next resistance is at RM9.50. Its all-time high was RM11.30 recorded in December 1993.

I've written up a report on this stock which I did not post because I feel it is too high.

Alex Lu said...

Hi hng

If the new Tambun shares will be entitled to the dividend, I think you can consider buying the OR & subscribe for the Rights Issue. If NOT, it is a toss-up because the new shares may be priced at a discount as Tambun-A. Tambun-WA may trade at 20-30% premium but is that enough to cover the temporary loss on Tambun-A? Check out with the registrar or the company secretary.