Wednesday, August 25, 2010

Market Outlook as at August 25, 2010

Our FBM-KLCI is displaying the same pattern that we saw in the last quarter of 2007 & first month of 2008 (which I have denoted as 'X'). Back then, the index had a parabolic rise that culminated in a V-shape reversal. We may be witnessing a steady build-up of a parabolic rise over the past few weeks- with the promise of the blow-off stage to come. No one know how long & far this rally can go. However, we know from historical records that parabolic rises culminate in sharp falls. Notice how the MACD & RSI have both broken above their downtrend line (denoted as 'Y'), just like in the last quarter of 2007 (denoted as 'X'). This market may correct & rise again. Like a shooting star, the market may rise until it can rise no more. Be very careful...


Chart: FBM-KLCI's daily chart as at Aug 24, 2010 (Source: Tradesignum)
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10 comments:

  1. Ai LingWednesday, August 25, 2010 10:50:00 PM

    Hi Alex,

    i was thinking QL and HELP is almost fully value.

    Please advise on your end.

    AL

    ReplyDelete
  2. East Point TradingThursday, August 26, 2010 7:41:00 AM

    Hi Alex,

    I totally agree with you. Below is may post about this topic. All are welcome to visit.

    Will 2007 Patten Happen Again?

    ReplyDelete
  3. Alex LuThursday, August 26, 2010 12:21:00 PM

    Hi Ai Ling

    You may consider QL if it pulled back to its 50-day SMA line at RM4.30. On HELP, I think one should avoid this stock as it has risen too high & is overvalued now.

    ReplyDelete
  4. Alex LuThursday, August 26, 2010 12:27:00 PM

    Hi Durian Edge

    Nice article. I'm curious to know how did you embed an hyperlink in your comment.

    ReplyDelete
  5. @h TongFriday, August 27, 2010 10:01:00 AM

    Hi Alex,
    If you wish to embed the hyperlink
    you can try code
    < a href="http://URL" >SHOW on Screen < / a>
    where by < a should stick together
    also < / a also have to put together

    Thanks for all the good review & comments.

    ReplyDelete
  6. Alex LuFriday, August 27, 2010 11:35:00 AM

    hi @h Tong

    Thanks for the tip.

    ReplyDelete
  7. Mac LimFriday, August 27, 2010 11:40:00 AM

    This comment has been removed by the author.

    ReplyDelete
  8. Mac LimFriday, August 27, 2010 11:41:00 AM

    how do you think of JCY? recently the price is keep dropping...need your advice on this counter...thanks a lot...

    ReplyDelete
  9. Alex LuFriday, August 27, 2010 3:17:00 PM

    Hi Mac

    JCY has announced a decent results for QE30/6/2010. However that won't save it from the current selldown because investors are worried about the results for the next few quarters. The demand for HDDs is reported to be quite weak.

    Chartwise, we can expect some support at the psychological RM1.00 level. If that level is taken out, it may quickly go to the RM0.95 level (and even the RM0.90 level) before we may see some rebound in the stock.

    As always, it is not advisable to try & cut a falling knife unless you have very good knowledge of the company or the sector.

    ReplyDelete
  10. Mac LimFriday, August 27, 2010 5:27:00 PM

    Hi Alex,

    thanks for your professional advice....what if hold this counter for long term?

    ReplyDelete