Friday, April 24, 2009

Market Outlook as at April 24, 2009

The potential reversal in the KLCI did not happen (see earlier post, here). The correction on April 20 & 21 was relatively mild & the nearly-horizontal resistance-turned-support at 950-60 saved the day. With this, our market marches on. The market sentiment may have benefited from the Government's decision to scrap the 30% quota for bumiputra equity even though it is only for 27 sub-sectors in the services sector (here). It certainly wasn't affected by the IMF report that the global economy would likely contract 1.3 percent this year in the deepest post-World War Two recession by far (here).

From the daily chart (Chart 1), we can see that the MACD, which was poised to hook down 1 or 2 days ago, may not do so after today's strong move. The market looks set to test the psychological 1000 level next week.


Chart 1: KLCI's daily chart as at 24/4/2009_12.30 noon (Source: Quickcharts)

Investors would be heartened to learn that the monthly MACD has nearly done a bullish crossover. If this happened next month, our market would have bottomed & the long-term view of our market would be bullish.


Chart 2: KLCI's monthly chart as at 23/4/2009 (Source: Quickcharts)

It is important to note that the US stock markets as well as other Asian markets are showing signs of weakness. If these markets entered into a sharp correction, our market will certainly be affected. So, keep an eye on these markets, always.
at

3 comments:

  1. ACFriday, April 24, 2009 2:43:00 PM

    Yup...keep an eye on these markets. But today Bursa is too hot. Quite sometime never see this volumn.

    By the way, thanks for the info on USD vs RM uptrend.

    ReplyDelete
  2. herbertFriday, April 24, 2009 5:09:00 PM

    you advice on Supermax is suck!

    ReplyDelete
  3. Alex LuFriday, April 24, 2009 6:19:00 PM

    Hi Herbert,

    I am sorry if you were misled by my post on Supermx. Most traders or investors were misled by Supermx's earlier statement pertaining to the provision for its investment in APLI. I do not want to go into the full details, which readers can check out in my 4 posts on this stock themselves. You would recall that on Feb 24 the share price had a sharp fall & I posted the following:

    "Supermx has dropped sharply over the past 4 or 5 days, after making a 3-month high of RM1.06 on February 17. As at 4.30 pm today, Supermx was trading at RM0.79. That's lower than the recent low of RM0.80 recorded on December 30, 2008. A quick recovery from this level is crucial, failing which Supermx share price could continue to drift lower."

    "Sadly, Supermx has proven to us that some time there is a reason why a stock is a laggard. My earlier call on this stock did not work out as anticipated & we may have to clear our position, if there is no rebound from the RM0.80 level by tomorrow."

    That post was uploaded before the end of the afternoon session. Supermx made a low at RM0.78 & closed at RM0.785 on Feb 24. See the first link below.

    After the close of business on the same day (Feb 24), Supermx announced its results for QE31/12/2008 where its net profit dropped by 90% q-o-q or 89% y-o-y to RM1.5 million. The reason was the company was hit by the full impairment made on its investment in APLI amounting to RM16.7 million, which was supposed to be fully provided for as per the company's press statement a few days earlier. Seeing that there was no "surprises" but a case of "mis-communication", the share price recovered somewhat on Feb 25. See the second link below.

    1st link- http://nexttrade.blogspot.com/2009/02/supermx-re-testing-its-recent-low.html

    2nd link- http://nexttrade.blogspot.com/2009/02/super-reported-sharp-drop-in-net-profit.html

    ReplyDelete