Sunday, May 17, 2009

Sharp Decline For KL Composite Index This Week ?

Well my findings on what I'm really worried about have arrived. This time we can see that the Dow Jones Industrial Average was the main cause that leads the share market to fall. Last Sunday I did posted some of my finding stated that the KL Composite Index will have a crucial week (refer HERE) and the index started to went down to confirm that the current trend was over. The index didn't manage to break the higher level of 1,037.81 points.

As I use to hear that "Trend Will Repeat By Itself" and it really happen according to my finding. It might not be exactly the same but at least the similarity of the chart is very close. (please refer HERE 2007 February chart) Because of this finding, my position for last week trade now stand at zero ..... with no position in equity market at these moments.

Right now we might be asking whether there would be a major correction ? If the major correction really set in, be well prepare and use the technique "CATCHING A FALLING KNIFE". The reward will be huge but we must remember that "TIMING" is very important. If we catch it earlier and the trend still move downwards then we might not seeing any profit at all. Not everyone can catch a falling knife.

One thing for sure from this current uptrend rally, I really learn a few more technique and rules in reading the movement of the KL Composite Index as well :

  1. Always be a trend follower and not a trend predictor
  2. Never try to judge that the share market is going for a correction when the indicators didn't show it at all.
  3. Follow the indicators couple with the performance of the world equity market to lead yourself in making a right decision.
  4. Always lookout for higher high, lower high in terms of the share prices that can confirm that the current trend is still an uptrend.
  5. When the market move, just ride on with it. The sentiment will tell us when to sell when there are lots of weaknesses appear in one week. During that period we still have enough time to unload some of the shares.
No doubt the "first" phase of the uptrend follow exactly the same as the February 2007 chart, we cannot assume or anticipate that the KL Composite is going to experiencing a huge fall. The "second" phase of the current downfall will depend on the world equity market movement especially the Dow Jones Industrial Average. DJIA movement will determine whether our corrections will be completed in few days or weeks.

I will not be around from today onwards as I have to fly to Beijing for my holiday trip over there tonight. But I will try my best to keep everyone update any of my ideas or my finding on the movement of the Malaysia share market.


Kingsmen said...

Have you heard of the statement 'NEVER' catch a falling knife?....i think in a down trend market (as we really do not know how much is the fall)...catching such 'knifes' would be very dangerous and bloody..unless you are catching the handles....anyway as a believer of both fundamental and technical analysis, i think the market has gone above its valuation and hence overbought. The barrage of bad news are now spinning out again (of course by the 'controlled media worldwide') so one really have to 'look before he leap' making those investments.

Im actually looking at individual stocks with sound valuations and PE. I like BYD (1211) and BYD (285) electronics, Chinaerospace (31), cnooc (883), CVM (705) just to name a few. Most of them are listed in HKEX.

Over in can expect ZELAN or INCHKEN to trade in a reasonable price range.

Whats your individual picks jack?

stwong said...

do you know why our klse so strong? because govt goreng klse so that get money to bribe Hee Yit Foong RM25mil, 3 appeal court judge RM30mil each, PI Bala RM15mil, 2 Perak PKR rep RM10mil each. total RM150million for bribe all get from klse.
this is why klse under najib so strong.... coz najib use govt goreng stock market to get money to bribe his enemies.

Kingsmen said...

you mean to say...chinese govt also goreng their own stock mkts to bribe their way thru?...same goes to Hkong, dowjones, lse, spore ex.... what shallow thinking you got stwong....but then again if i know najib goreng the mkt then i know i can make big bucks why are you not taking advantage of the chance to make money since u believe that the money is for the 3 frogs?

truth is that we are seeing a more capable PM other than the old sleeping one.

stwong said...

yes, najib is more capable... in C4 mongolian altantuya. ha ha ha ha

Kingsmen said...

wow byd is now 34hkd.....warren buffett got in at 12hkd last year.....making big bucks now....

Kingsmen said...

there is one malaysian company listed in HKEx.....someone told me to buy around its 1 dollar...heard of CVM?....

Kingsmen said...

wow byd (1211) today 35 hkd !...i think byd electronic (285) is heading for its previous high soon.....meanwhile i think azrb is heading up soon.