Monday, September 26, 2011

Market Outlook as at September 26, 2011

In January to February 2008, FBMKLCI struggled to hold above the 40-week SMA line. In early March 2008, it broke below this important support & panic selling ensued. The index dropped slightly below the 80-week SMA line & then snapped back.

This round, our index struggled to hold above the 80-week SMA line from mid-August to mid-September. It broke below the 80-week SMA line in the late September. I have expected panic selling to set in once the 1400 psychological level is breached. I've also expected the index to drop below the 160-week SMA line (which it did earlier today). I am now expecting a rebound, possibly after a successful test of the psychological 1300 level. For those who are still holding on to their stocks & looking to sell, my advice is that you may get better prices at the later part of the week.



Chart: FBMKLCI's weekly chart as at September 26, 2011_3.00pm (Source: Quickcharts)
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14 comments:

  1. chanhooMonday, September 26, 2011 4:01:00 PM

    Hi Alex,
    I have experianced the year 2008/2009 stock market bear rally. During that time, i hold my stocks and did nothing for 1-2 years. Those stocks i am holding is low P/E ratio with sound foundamental company. When market is recovered, i sell it off to make some profit.
    What is your opinion on this round of bear rally? Should i hold my stock for 1-2 years or follow the other in panic selling?

    Thanks

    ReplyDelete
  2. IvanMonday, September 26, 2011 5:46:00 PM

    Dear Alex,

    Does it mean now is best time to buy and wait for some rebound, for bargain hunting?

    ReplyDelete
  3. Eric SimTuesday, September 27, 2011 9:48:00 AM

    The market is really rebound today. How do you predict its direction? Can i learn from you?

    ReplyDelete
  4. steveTuesday, September 27, 2011 10:26:00 AM

    Dear Alex,

    I've a favor to ask. Thanks!
    When we use SMA 50 and 200 to look at 5 years graph, what is the good parameters to put in for other measurement? My current setting is SAR (2%, 20%), MACD(12, 26, 9), RSI(14). Are these good or should I change them? Since they are the same as when I use SMA 30 and 60 for 1 year graph.

    Thanks!!

    ReplyDelete
  5. luckystock2Tuesday, September 27, 2011 5:02:00 PM

    Hi Alex,
    How do you think about the US market ? Does it have a similar pattern with 2008 ?
    Im holding 90% cash now but today market surge is so tempting and i did have a urge to buy.
    Any advice ?
    Tx!

    ReplyDelete
  6. fendiWednesday, September 28, 2011 8:47:00 AM

    hi alex

    market really rebounce

    this prove that ur TA is not bad at all

    1-0 over samgang

    haha..

    keep it up alex

    ReplyDelete
  7. Alex LuWednesday, September 28, 2011 2:20:00 PM

    Hi luckystock2

    See my Market Outlook. Again, I have to emphasize that Technical Analysis is dealing with probability. If you feel that the prices are very attractive, then go ahead to accumulate the desired stocks. We can never be ABSOLUTELY sure that this is going to drop further. If you have a dilemma, imagine those loaded with stocks. They wish they have your problem.

    ReplyDelete
  8. Alex LuWednesday, September 28, 2011 2:25:00 PM

    Hi steve

    I am not sure I can help you. I move back & forth between daily & weekly & monthly charts a lot. For monthly, I will overlay the price chart with 10 & 20-month SMA lines. For weekly, I use 10, 20 & 40-week SMA line. For daily chart, I use 20, 50 & 100-day SMA line. I like to use 3 indicators- MACD, RSI & ADX. I normally go with the default setting for each indicator.

    You can say I am not very particular about charts. I can survive on free charts, with minimal indicators & functionality.

    ReplyDelete
  9. Alex LuWednesday, September 28, 2011 2:26:00 PM

    Hi Eric

    Let keep it a secret: I got lucky!

    ReplyDelete
  10. Alex LuWednesday, September 28, 2011 2:28:00 PM

    Hi Ivan

    Check out my post entitled "Should I sit out this market?"

    ReplyDelete
  11. Alex LuWednesday, September 28, 2011 2:37:00 PM

    Hi chanhoo

    The simple answer is you can. If you look at any one of my chart with 5-year price range, you will see that there is a good chance that we may recover back to 1500-1600 in 2-3 years from now. If you have not sold, you can adopt that approach. It is like running on the same spot. Soon you will realize that you are not going any here. Is that good? No. Is that bad? Also no. If you sell now and you fail to buy back at the low, you will have no chance to recover. If you hold onto your stocks & ride it through, you can recover. I am not recommending any specific action. The choice is yours.

    ReplyDelete
  12. chanhooWednesday, September 28, 2011 5:13:00 PM

    Dear Alex,
    Thanks for the comment. I believe i should closely monitor my portfolio to make sure the fundamental of the company is intact or else. Otherwise, it won't have a changes to ride on the recovery phase of bull.

    By the way, any comment on the recent changes of Mudajaya top management that will affect its' compamy fundamental?

    ReplyDelete
  13. Alex LuTuesday, October 04, 2011 10:37:00 AM

    Hi chanhoo


    I don't know what to make of the recent changes in Mudajaya top management. Normally, I would view it as negative as Ng is the main man behind the company. He built up the company to what it is today. Without him, the company's growth would stagnate. However, he could also be a negative influence to the company.

    Since Ng is still holding onto his substantial stake in Mudajaya, I guess he can make a return if the need arises. This is pretty much like Mohd Kamal retreat & subsequent return in MK Land. If I that case can be used as a guide, Mudajaya will go thru a period of slow growth as the management team will be less aggressive & more inward looking.

    ReplyDelete
  14. chanhooTuesday, October 04, 2011 2:45:00 PM

    Hi Alex,

    Thanks for your comment.

    ReplyDelete