Saturday, January 3, 2009

KL Composite Break The Major Resistance. Start Your Engine.

Yesterday without any hesitation when the market make a move in the first 30 min, I foreseen there is some promising move from the KL Composite Index together with some of the speculative counters.

I place my order without thinking whether this market movement was a purely one or not. I used to say that this market seems to be heading north. (Accumulate more KNM and Equine)

Based on the chart and my last month article (Malaysia Stock Exchange. Accumulate on Weaknesses ?) on December 21, I did mention that we can start to accumulate any of our favourite shares in a preparation for a Chinese New Year Rally. Right at the moment I would prefer to accumulate any shares that usually stay at the Top 20 most active shares.

Couple with yesterday volume created and with the share prices increase, indeed the time has arrive for the share prices to move forward but remember this is just a technical rebound. A reversal trend that would last a while for just a few months. Maybe 2 to 3 months.

Yesterday night I made a research on where is the next course of KL Composite Index might be heading to and how long it will stay at upper level when the KL Composite Index reach its peaks ? If we examine the past and historical data, usually towards the Chinese New Years and after Chinese New Year the market will stay at least until March or April. (March UMNO election)

Let us re-examine the chart during 1997 Asian Financial Crisis. This is just a guidance for us to understand the share market behaviour. Many of the analysts might not agree with the way I compare the current 2008 World Financial Crisis with the 1997 Asian Financial Crisis. The crisis that occurs during 1997 crisis is totally different from the current 2008 crisis. This one I have to agreed with most of the analysts if we want to make a comparison between both of them but in crisis we need to understand that a crisis are always a crisis.

Share market never really understands whether the crisis is big or small. As long as the crisis strike and it is big within the region or the any parts of the world. Share market is the first place to react negatively. How it will react ? It depends on all other aspect as well. (i.e financial rescue)

No doubt the crisis is different but if we take a look on the charts pattern it look almost the same. Previously few of my trade did help me a lot in terms of guiding me how to trade according to past historical chart. It helps a lot.

Today I'm still surviving in the share market not because I'm clever or intelligence or I'm very good in watching the share market movements but it is because I always follow the chart guidance. Charts are only a guidance to show us when is the right time to trade but it is not a tool to show us when is the right time to buy or to sell any of the shares.

REMEMBER - These upwards are just a trend reversal for a few weeks only and it is not that the Bulls are coming back strong. It is just that the Bears are taking a rest after having a long fight with the Bulls for almost one year (downtrend). NEED TO RESPECT the BULLS because this coming Chinese New Year is an OX year.


CP said...

Happy New Year, Jackie.

I hv sold many yesterday and at the same time accumulate a few too. I will be clearing ALMOST all before CNY as I think correction will be around by then. So, I m not so sure if it could last till March. Getting back into market in mid-Feb if there is a belief of election rally(if any).

Just my overview thoughts on the rallies. Hope you could comment.



Jackie Lee said...

Happy New Year, Teh

According to charts and indicator, there are more indication that the market might be heading upwards.

If we check the current prices, many counters still not yet move or more a little.

How would I consider that the market is moving. Is just like KNM 0.40 move to 0.50.

A strategy of selling and accumulate at the same time would not be a good idea.But at least hold until one week before Chinese New Year.

I think the price would be better then. Whether the market would last until March that will be another matter to think then.

Basically it depends from time to time. What I mention here is according to the past historical charts

CP said...

Thanks, Jackie for your view.

I swooped some of my counters, actually. Hevea started to move, so I jumped in, a little. Will accumulate more.

Scomi is another investor fav besides KNM. Yeah, read about KNM in Dali's blog. I hv bought enough of KNM and waiting to load-off.

Anyway, thanks again. Points taken.