Wednesday, July 22, 2009

Market Outlook as at July 22, 2009

If you looked through the global stock markets, you can divide up the markets into two groups- the sprinting tortoises & the galloping hares. The way these markets has rallied in the past 7 days (since July 13), they all look quite alike.

The first group-- the sprinting tortoises-- consists of Asian stock markets (excluding the Japanese market), while the other group-- the galloping hares-- is made up of US, European, Australian & Japanese market. You may notice the following:
1. The 200-day SMA lines for the Asian markets (ex-Japan) are nearly flattening out, while the other markets' 200-day SMA lines are still dropping.
2. The recent correction brought the Asian Market indices to their 50-day SMA lines, while the other markets went as low as the 100-day SMA lines.
These two differences may explain the inherent strength & resilience of Asian markets (ex-Japan).

Nearly all the above markets are now at their June high, with a few markets (Singapore, Hong Kong, Korea & Malaysia) surpassing their June high. While I believe that the markets may correct at this level, they have proven me wrong. Nevertheless, the sharp price run-up in many blue chips will eventually be followed by some correction. I feel that some profit-taking at the present level may not be a bad idea.


Chart 1: HSI & STI's daily chart as at 21/7/2009 (Source: Stockcharts.com)


Chart 2: TWII & KOSPI's daily chart as at 21/7/2009 (Source: Stockcharts.com)


Chart 3: AORD & N225's daily chart as at 21/7/2009 (Source: Stockcharts.com)


Chart 4: FTSE & S&P500's daily chart as at 21/7/2009 (Source: Stockcharts.com)


Chart 5: DAX & CAC's daily chart as at 21/7/2009 (Source: Stockcharts.com)

PS- Our KLCI has surpassed the strong horizontal resistance of 1140 this morning. In the afternoon, it tested the next strong horizontal resistance of 1160 but failed to overcome it. I believe it is likely to enter into some correction, with the 1140 level as its immediate support.
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10 comments:

  1. okatingWednesday, July 22, 2009 6:31:00 PM

    Tq Alex,

    Anyway, you still havent answer our question , after DOW & KLSE breaking its 8,900 & 1,150, is it confirm bull based on yr technical analysis ?

    By telling us there would be some correction after recent run up is like my sifu sam slogan of who doesn't know his mother is female ?

    confirmed bull ?

    ReplyDelete
  2. kaichiewWednesday, July 22, 2009 8:06:00 PM

    This comment has been removed by the author.

    ReplyDelete
  3. kaichiewWednesday, July 22, 2009 8:08:00 PM

    halo okating,

    why u so much needed someone to confirm bull or cow??

    after all, we need to be responsible for our trade..dont take plp's word too hard...

    btw, alex is a good remisier and TA pro, i earn $$$ thru his posting, look at his call on call warrant, i bought sime-cf @ 0.425 and commerz-cf @ 0.10, wats their price now??

    ReplyDelete
  4. maverickWednesday, July 22, 2009 10:16:00 PM

    Hi Alex,

    Beware of this guy called okating.

    For more details on his notoriety, go here : http://fusioninvestor.blogspot.com/2009/06/and-spamming-blogger-strikes-yet-again.html

    ReplyDelete
  5. longpineziThursday, July 23, 2009 10:55:00 AM

    halo kaichiew

    Congratulation , I am not that lucky like you , I shorts future at 970 after reading alex's call >

    http://nexttrade.blogspot.com/2009/07/some-unpleasant-news.html


    I am not pushing the blame on alex , my decision should be borned by me myself.

    ReplyDelete
  6. Alex LuThursday, July 23, 2009 1:16:00 PM

    To Kaichiew,

    Thanks for your generous words & support.

    To Longpinezi,

    I'm sorry to hear about your loss. My post entitled "Some unpleasant news" is not a SELL call. It was intended to bring to the readers attention the negative economic development prevailing then. I believe that one should be armed with all relevant information in order to come to an informed decision. I was alerting the readers to the gaining storm despite my view that the stock market was undergoing a correction at that point.

    To Okating,

    I'm confused why you kept asking whether the market is in an uptrend. I can plainly see where you are coming from, but what purpose does your line of questioning serve? If you think that someone else is a better analyst or has a better method of stock selection, please share it with my readers & clients by posting his link here.

    ReplyDelete
  7. longpineziThursday, July 23, 2009 2:11:00 PM

    Dear Alex,

    You are such a gentlemen, my respect to you.

    Is ok , not your fault but mine , I need to do my homework before following you.

    Me too like okating , I need to seek for yr view whether we are at the uptrend mkt after such a big jump recently.

    confirmed up trend ?

    Thanks in advance.

    ReplyDelete
  8. Alex LuThursday, July 23, 2009 4:05:00 PM

    To Longpinezi,

    You made a valid point that one should not take anything at face value, even though that may not be so applicable to the post in question.

    In stock-specific or sector-specific instances, we should counter-check some of the facts, assumptions & arguments before making our decision. There were instances where we made mistakes or overlooked some issues, leading to a wrong conclusion. As a reader, when we spot such mistakes, we should bring them up to the attention of the writer. Blogging & commenting should be a two-way process with mutual benefit in mind.

    ReplyDelete
  9. kaichiewThursday, July 23, 2009 5:49:00 PM

    to longpinezi,

    short at 970 so wat??

    u dunno cut lose point??

    never play futures b4??

    hug 970 until now??

    must learn 'CUT LOSE' and be a discipline player..

    ReplyDelete
  10. longpineziThursday, July 23, 2009 5:53:00 PM

    kai,

    I think you dont know what you are writing , UEMland did crossed > 1.72 on 18July, ( check yrself, she touched 1.73 before she slide down to 1.65 ).pity those who followed you to buy above 1.72 & cut loss <1.63 , it is now 1.68, how ? buy back ?

    Who doesnt understnad english? you or me ?

    ReplyDelete