Wednesday, December 15, 2010

Market Outlook as at December 15, 2010

FBM-KLCI is holding very well but we mustn't be complacent. I am often dumbfound when some one asked me "Are we going to have a bull run?" I thought we are in a bull run- albeit a rather stealthy bull run- with the FBM-KLCI gaining 80% since March 2009.

From the chart below, we can see that a few indicators, such MACD, RSI & William %R , have turned negative. The market could enter into some correction with the FBM-KLCI dropping to test the psychological 1500 level or even the 10-week SMA line (equivalent to 50-day SMA line) at 1493. A minor correction, if it happened, is not a bad thing. With ample liquidity, I believe any correction will likely to be short & shallow. Or, am I being complacent?!!


Chart : FBM-KLCI's weekly chart as at Dec 15, 2010_3.00pm (Source: Quickcharts)

Based on the above, I think we should reduce our trading activities for the next few days (or for 1-2 weeks) until the technical indicators have recovered.
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4 comments:

  1. MaxWealth88Wednesday, December 15, 2010 4:59:00 PM

    hi Alex,

    what is your opinion on sunway-wc? it is to be bought by newco at 1.60but is trading at 1.25 now? looks like an arbitrage opportunity right? why the share price went down instead of up after its newco news as compare to sunrise? is the market don't look favorably to the suncity/sunway deal?

    thanks
    maxwealth88

    ReplyDelete
  2. Alex LuMonday, December 20, 2010 3:21:00 PM

    Hi MaxWealth88

    This Sunway/Sucity deal is not a cash deal. You are swapping your shares or warrant for shares in a newco that is a product of the amalgamation of Sunway & Suncity. The price for each security is used for exchange purposes. So, in your case of the Sunway-WC, the price was fixed at RM1.60. If you accept the Offer, you would get shares in the Newco. That new shares would also be lower as Sunway & Suncity share prices have dropped off.

    ReplyDelete
  3. PEGGY MethodThursday, January 06, 2011 12:21:00 AM

    Hi Alex. Referring to your article on miss on Hapseng. Any website that provide alert when there is a buy signal?

    I tried tradesignum but still learning it. Any other website for malaysia stocks?

    Thanks

    ReplyDelete
  4. PEGGY MethodThursday, January 06, 2011 12:21:00 AM

    Thanks

    ReplyDelete