Sunday, May 10, 2009

This Week Will Be A Crucial Week For KL Composite Index ?

Well today I would like to share what I have really found last two weeks. My statement here will be short and sharp. I will not going to elaborate what is really going to happen in the first place whether the share market will go up or down. Using this research, I hope that it can really guide us and give us a clear picture where our KL Composite Index is heading to.

On your right (Chart 1) was a historical data back in year of 2007. During that time the share market was crazy. The feeling that I have during that time is the same as now. The share market keep on going up until their final week before the share market collapse. During that time all the speculative counters went up two digits gains for 4 or 5 days during the final week.

1) As you can see from the low register at 1,049.83 points (click the chart to enlarge), the KL Composite took about 43 days to complete its trend before collapsing all the way down.

2) During the up-cycle, the index climbs about 235.00 points from the low recorded 1049.83 points to the highest at 1,285.15 points. This 235.oo points upward will act as a measurement to compare to Chart 2 below.

3) Point 1, 2, 3 shows a mild correction and Point 4 shown where the share market have ended its uptrend. During these 43 days of powerful up-cycle the share market take a pause when the share market reacted to world equity markets downturn. During that time the world equity markets have started to move down a bit before experiencing a collapse from the Dow Jones Industrial Average.

On your right (Chart 2) is the latest updated chart for KL Composite Index until 08.05.2009. This time the share market also reacting crazy, unstoppable. We can take Chart 1 and Chart 2 to compare each other and make an assumption where the market would be heading to.

1) As we can see from the low register 836.51 points, the KL Composite Index already moves up about 40 days until Friday close. Based on the calculation, we still have about 3 days to 5 days to complete the cycle based on Chart 1. That means it will be this week 11th May till 15th May 2009.

2) Possible target for the KL Composite Index to reach is around 1,030.00 points to 1,075.00 points. At 1,075.00 points using Fibonacci Retracement, the reading would be at 38.2 %. If we use the low recorded at 836.51 points (Chart 2) and add about 235 points (estimate surge during 2007 Chart 1), we will be getting a reading of about 1,071.00 points (plus, minus 20 points).

3) Point 1, 2, and 3 is to show us that there is a similarity move between the Chart 1 and Chart 2. In order for the share market to take a pause, the KL Composite Index needs to take a break. Right at these moments the world equity markets are booming up which is, it is quite impossible for the KL Composite Index to go down. "Swine Flu" and "Stress Test" were not able to bring down the world equity markets because the world equity markets were in the Bulls run.

But something has happen last Friday. The US Dollar completely broke down, with the US Dollar collapsing to about 82.50. The US Dollar also breaks the 200 days Simple Moving Average which means that the Bears might start to rule over the Dollar. Read this article "Imminent Global Stock Market Crash to Support U.S. Dollar". Dated 9 May, 2009.

Basically it is up to us to make the judgement whether the share market will have the strength to go up this week and another week or so. Maybe the correction is just around the corner but no one know when it will happen.

Current share market movement suggested that we must be a trend follower not a trend preditor. Or else we might be losing out from this biggest run-up opportunity that occur once in a while. Somehow there isn't any bad news to bring down the share market but if the US Dollar still cannot be supported then something might happen to the Dow Jones Industrial Average.

This article is just for my own use and for record purposes only and it cannot be treat or use as an article to determine our buying or selling activities in the share market. What I have found here will be a good picture for us to determine our decision in investing in the share market at these moments.

5 comments:

Anonymous said...

May I ask...
What is your current position in KL share market? Are you holding any stocks?

Jackie Lee said...

Current position can be consider not much. If anything happens, the hurt will not be that great.

Still will follow the trend but will use day trade or overnight method to play. (T + 1)

small caps said...

Hi!I wanted to share an information which I know.The Bursa Malaysia (MYX: 1818) or Malaysia Exchange, MYX previously known as Kuala Lumpur Stock Exchange (KLSE, Bursa Saham Kuala Lumpur in Malay) dates back to 1930 when the Singapore Stockbrokers' Association was set up as a formal organisation dealing in securities in Malaya. In 1937 it was re-registered as the Malayan Stockbrokers' Association, but it still did not trade public shares.

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