Wednesday, November 19, 2008

KL Composite Index Movement Not Genuine ? Wait for Better Leads.

It about time we talk about KL Composite Index. No doubt the KL Composite Index still manage to move side way but the shares prices for most of the counters still show a lot of weakness.

If we take a look at the movement of some of the individual stocks for yesterday movement and Monday movement, indeed some of the counters are starting to show more sign of weaknesses.

Some even try to reach the recently bottom and a few of them even break the recently low. WCT Engineering yesterday went down RM -0.16 per share to close at RM 1.52 per share. It shows that some selling activity start to emerge after the recently run up. MAS Berhad and Proton Berhad are creating new lows. The market didn't show any sign of strength to overcome the selling pressure that emerge these two days.

It seems that the KL Composite Index movement was not genuine. In this few days alone the index either try close with a little bit higher or a little bit of lower. The way the index move is not according to the world financial market momentum. So we cannot assume that the index movement will guide us anywhere whether it is a time for us to start to accumulate for short term play. I will rather wait and see.

The Dow Jones Industrial Average still struggling to maintain at 8,000 points and above. In this coming few days, any incoming major bad news will likely to bring down DJIA to break its recently new lows. This would be a great disaster if the DJIA breaks the 7,882.51 points because we don't know where the new bottom is ?

From my points of view, I would expect the KLCI market to move side way and will hold on until end of the year before Chinese New Year rally emerge. Any corrections would be considering as an opportunity to accumulate but this would depends how the KL Composite Index would react towards the world financial crisis.

It is too early to mention that our market has found its bottom. At this moment I would rather stay out from the market and wait until the end of this month (refer here -Malaysian Finance Blogspot). But in December we would have to keeps our eyes open and monitor the movement of the KL Composite Index provided that the DJIA still maintain above 7,882.51 points. Usually the movement for KL Composite Index in the month of December always shows more disappointment movement rather an excitement movement but we must always be well prepare if opportunity occurs.

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