Wednesday, January 13, 2010

SSEC dropped 3.1% today

SSEC index closed at 3173- down 101 points or 3.1% today. Investors turned skittish after China raised the bank reserve ratio yesterday in an attempt to cool inflation and unsustainable gains in property and stock prices.

From Chart 1, we can see that SSEC may soon be testing its medium-term uptrend line (SS) support at 3150.


Chart 1: SSEC's daily chart as at 12/1/2010 (Source: Stockcharts.com)

Another index to watch is the Hang Seng China Enterprises Index ('HSCEI'). HSCEI is a freefloat capitalization-weighted index comprised of H-Shares listed on the Hong Kong Stock Exchange and included in the Hang Seng Mainland Composite Index.

I have appended a chart of HSCEI below. The medium-term uptrend line (SS) support for HSCEI is at 12650. AS at 3.01pm local time, HSCEI was trading at 12482- down 485 points or 3.7%. This means that HSCEI is marginally below the medium-term uptrend line.


Chart 2: HSCEI's daily chart as at 12/1/2010 (Source: Stockcharts.com)

We will have to wait & see whether HSCEI & SSECI can rebound tomorrow. A failure to do so could have a very negative effect on other regional markets, including Malaysia.
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6 comments:

  1. Mother of TwoWednesday, January 13, 2010 6:20:00 PM

    Hi Alex,

    I bought Supermax at RM4.00, and today it has gone up to RM6, when should I take profit?

    Thank you

    Grace

    ReplyDelete
  2. AlexPWednesday, January 13, 2010 7:51:00 PM

    Hi my fellow namesake Alex,

    I would like to get your opinion on London Biscuits (LonBisc) if possible. Yesterday, it looked like it was about to break out but got hit by the market drop today.
    The Directors seem to be buying lately, and the final dividend ex-date is just next month. What do you think?

    Thanks!

    ReplyDelete
  3. KENNY BLOGThursday, January 14, 2010 9:44:00 AM

    Good day Alex,
    I got buy Lionfib, and recently it has gone up a lot. I should keep it or sell it to realise the profit?
    Thanks for your advise.

    ReplyDelete
  4. Alex LuFriday, January 15, 2010 8:44:00 AM

    Hi High Society,

    I think it is a good idea to take profit on Supermx at the present level. Supermx closed with a doji yesterday. After an strong advance or long white candlestick, a doji signals that buying pressure may be diminishing. The intra-day indicators are showing signs of bearish divergence. However, we do not have any confirmation of a top for this stock yet.

    See my latest post.

    ReplyDelete
  5. Alex LuFriday, January 15, 2010 8:49:00 AM

    Hi Alex,

    I agree that Lonbisc may have broken to the upside of its medium-term downtrend at RM1.03-04. Its next resistance is at RM1.20-22. Its support is at the psychological RM1.00 level, which happens to be the 100-day SMA line.

    Lonbisc is a good consumer whose share price lags behind the performance of our KLCI. Its business is doing very well and I believe this will eventually be reflected in the share price.

    ReplyDelete
  6. Alex LuFriday, January 15, 2010 8:59:00 AM

    Hi KENNY BLOG,

    LionFIB has a strong resistance at RM1.50. That may be a good level to take some profit after the recent sharp rally.

    ReplyDelete