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Regional Stock Market Indices Commentary - 7 July 2008

Kuala Lumpur: Technical rebound expected

Negative sentiments from rising inflation to the comical political instability have taken toll into the stock market. The KLCI fell about 1200 points or 9% in 2 weeks. The KLCI easily broke the 1,200 points support level and it is now at 1134.14. The aggressive downward movement has caused technical indicators to show that the down trend has turned strong. The average prices is currently between 1,190 points and 1,250 points.

This means that the KLCI is oversold and this is also indicated on the Stochastic and RSI indicators. The daily price movement on Friday suggests a price reversal. Therefore, a technical rebound is expected, IF there are no negative follow ups to the current problems that causes negative sentiments. Support level is at 1,100 points while immediate resistance is at 1,190 points. In the long term, the KLCI is expected to continue to its down trend to the major support level at 1,000 points.
 
Singapore: Technical Rebound expected

The Singapore market was drifting sideways with a downward bias as worries about soaring crude oil price and other commodities may lead to lack of confidence in the equities market. As of Friday, the STI closed at 2,892.54 points. The STI went to a low of 2,862.27 on Thursday and formed a Candlestick “Doji” pattern which represents uncertainty and on Friday, that pattern turned into a “morning star” which represents a price reversal. Therefore, a technical rebound is expected to happen. Furthermore, the STI is currently oversold in the short term as Stochastic is below 30 and the average price range for STI is between 3,000 points and 3,100 points.

The current trend is still down and with strong momentum. This means that the technical rebound may be small and down trend shall resume once the rally on the rebound is over. Resistance is expected to be at 3,000 points while support level, which is a major one, is at 2,750 points.

Bangkok: More downside for the SETI

A string of street protests against the current government has caused confidence in the equity market to be weak as well. The SETI is now back to its level where it was before the new government was formed. It is at the major support level of 734 points. The SETI closed at 743.03 on Friday. The current trend is obviously down and the momentum indicators like RSI and MACD are still indicating a strong down trend.

There are no indications of price reversal detected on the SETI as opposed to other markets. Therefore, more downside for the SETI is expected and it may test the support level of 734 points again and most probably would break below this level this time to continue the down trend. The next support level is at the psychological 700 points level. Current resistance level is at 786 points.

Hong Kong: Expected to test crucial 20,500 points support level.

Like the rest of the regional markets, especially the US, the HSI continues to slide down further and fell about 2,000 points or 10% in one month. The Hong Kong market is also affected by the weak performance in the Shanghai equity market. As of Friday, the HSI closed at 21,423.82 points. The movement on Friday has formed an uncertainty Japanese Candlestick pattern called “Doji” which indicates uncertainty. When price is uncertain in a down trend, an upward rebound is expected.

The rebound may be short-lived because the current down trend is strong. Although an immediate rebound is expected, it may face resistance at 22,300 points and later continue its down trend to test the crucial 20,500 points support level.

US: Price Reversal Up on DJI

Negative economic data and rising crude oil and commodities prices have put some fear on investors. The DJI continues to fall about 1,000 points or 9% in one month. The current trend is strongly down and although it has been heavily oversold, a technical rebound has yet to be seen. The DJI even broke below the crucial support level at 11,700 points. The market brings a little cheer for investors just the day before the Independence Day holiday because it closed up and formed a price reversal up pattern.

Can the reversal turn into an upward rally. It may happen because the DJI is heavily oversold and has been in this position for weeks. The average price range for the DJI is between 12,100 and 12,400 points. The DJI closed at 11,288.54 points last Thursday. However, the upward rebound may be small because the down trend is strong with a resistance at 11,600 points. Support level is expected to be at 10,600 points.

Regional Stock Market Indices Commentaries - 16 June 2008

Kuala Lumpur: An immediate technical rebound is expected

The up trend rally since March, when the KLCI was about 1,200 points found heavy resistance at the 1,300 points level. The movement formed a toppish pattern called the double top or bearish reversal. It was confirmed when the KLCI broke below the double top formation neckline at 1,270 points and the tightening Bollinger Bands started to explode. The KLCI is now at 1229.35 points.

The KLCI is now slightly oversold in the short term as the Stochastic indicator has gone below the 30 level. An immediate technical rebound is expected but may face resistance at 1,250 points (which is the current down trend line support level). It is expected to continue its down trend because the momentum indicators, like RSI and MACD shows strong bearish momentum. Next support level is at 1,200 points. The 1,300 points resistance level remains the main resistance for the KLCI.
 
Singapore: Momentum indicators are currently supporting the down trend

The STI found heavy resistance at 3,500 points level after rallying from its major support level at 2,750 points in March. The resistance caused the STI to pull back to close at 2,979.56 today. The STI which was between the short to long term averages weeks ago now goes back under the average and this indicates that the trend is continuing downwards and the momentum indicators are currently supporting the down trend.

Although an immediate technical rebound is expected because the Stochastic indicator is below the oversold scale below 30, the STI may find short term down trend line resistance at 3,160 points. If the STI is able to break above this resistance, then there is a high chance of it testing the major support level at 2,750 points.

Thailand: SETI is currently at a crucial Fibonacci retracement level

After a good up trend rally since January this year, when the SETI was at about 740 points, the SETI finally met its resistance at 890 points last month. Since then, the SETI slid downwards to 782.34 points today. This slide accounts for a 62% retracement from the up trend rally. Unlike other markets which have found may support levels during the downward rally, the SETI only found once in early June and the rally only lasted two days before the down trend resumes.

With the strong downward momentum the SETI is expected to slide further to test its main support level at 739 points. However, a slight technical rebound is expected immediately because the SETI is currently at a crucial Fibonacci retracement level (61.8%) and the Stochastic has indicated an oversold position and this is the second time the Stochastic crosses above its trigger line. The rebound may be short-lived as the SETI may find resistance at 800 points.

Hong Kong: The HSI is heavily oversold

The China market, which heavily affects the Hong Kong market other than the US market, has been bearish since its peak in October last year and the index was slashed more than half and is expected to continue to decline, given its strong bearish momentum. The Hong Kong market HSI however has shrinked 30% from its peak in October last year. Earlier this March, the HSI made a good short term up trend run of 25% from 21,000 points to the 26,400 points resistance level. The HSI has then started to decline and is currently at 22,590.30 points.

Like the Thailand SET index, the HSI is currently at the crucial Fibonacci retracement level (61.8%) and the Stochastic indicator, which is now below 10, is indicating that the HSI is heavily oversold. Therefore, an immediate technical rebound is expected but may be only a short while because the down trend momentum is still strong. The HSI may find immediate resistance (from the down trend line) at 24,000 points.

US: A little more room to move upwards

The uncertainty in the US economy because of fear of rising inflation resulted from increasing commodity price especially the crude oil has taken its toll on the US stock market. The heavily benchmarked US DJI has affected the performance of other markets around the world. After finding a strong support level at 11,700 points level, the DJI climb strongly upwards since March this year but found a strong resistance at 13,100 points level. A bearish reversal pattern (indicating toppish market) called a double top was formed at this resistance level and it was confirmed and the DJI is now at 12,307.35 points.

A strong upward rebound in the past two days may send a positive note to markets worldwide but the down trend resistance level is at 12,400 points, leaving it a little more room to move upwards. The DJI is not expected to break above this resistance because the momentum indicators like the RSI and MACD are indicating a strong bearish momentum has started to develop and may send the DJI to its main support level at 11,700 points in the longer term.

The Goverment is Robbing the Rakyat!

Petrol price has risen 40%, RM2.70 per litre. And NST had the guts to say that the raise is still below the unexpected RM4.00 increase. Also, Sleepy PM also announced a new tariff structure for electricity supply in Peninsula Malaysia beginning 1st July.

I was in Vietnam, motorcycle city of HCMC recently and was astounded by the inflation rate that is hitting that economy. Inflation is as high as 23% while bank interest rate is going at 12%. Their stock market performance was down 60% since last year high. Many are struggling to meet ends meet.

Locally, prices of already expensive roti chanai and teh tarik is defenitely going to rise further. Rice has already gone up. Everything goes up. With rising fuel price, expected to have mat rempits on our roads, like in Vietnam. I believe interest rate will be going up in the very near future too... and Inflation is going to be higher than interest rates.

Get ready to sell (short sell) our stock market!

And I am just wondering how much more money the "Powers that be" and their cronies are going make with these government savings! Oil belongs to rakyat. The government should subsidize oil for the rakyat.

PLEASE DON'T FUCKING COMPARE OIL PRICE WITH A COUNTRY THAT DOES NOT PRODUCE OIL!



Heheheheheheheheheehehhehehehehehehehehehehehehehehehehehehe

Now, that's why PM Bodowi still want to keep his position. He knows that he only have one more term. So better squeeze rakyat money and elope once his term ends!

THE GOVERNMENT IS ROBBING THE RAKYAT!

YB Jeff Ooi calls it as an obscene sin!

Where are our Robin Hoods?

Regional Stock Market Indices Commentaries Update - 4 June 2008

As at 29 may 2008;

Kuala Lumpur Composite Index (KLCI): Down trend reversal

The political scene seems to be more interesting than the financial markets, now with stronger opposition voice in parliament and new state governments trying to settle down. In the stock market, the KLCI went into a trading range last month. It did not even try to test the 1,340 points resistance level. The KLCI only managed to went to as high as 1,305.09 points since last month before settling at 1,261.82.

On the daily chart, the KLCI has formed a double top chart formation which indicates that the KLCI is now at a toppish position. The double top formation was confirmed when it broke its neckline at 1,270 points just a few days ago. The RSI indicator indicates a strong resistance and is now below 50, where bears are currently in-charge. The KLCI is now in a down trend reversal and is expected to test its immediate support level at 1,215 points, while stronger support level is at 1,150 points. Resistance is lowered to 1,300 points from 1,340 points because of stronger pressure downwards.

Singapore FTSE Straits Times Index (FTSTI): Heading South

The Singapore market was marred with uncertainty last month with the FTSTI struggling to test the 3,300 points resistance level. The FTSTI closed at 3,160.78 points after only managed to reach a high of 3269.88 points about 3 weeks ago and recently tested the support level of 3,100 points.

The daily chart pattern is forming (not completed as of today) a head and shoulders pattern. The head and shoulders pattern signals price has reached the top (in this case the short term trend). Momentum indicators like RSI and MACD are indicating weak momentum in the up trend and even the volume is declining. The FTSTI is expected to head south to test the immediate support level of 3,100 points and if this support level does not hold, the only technical support level is a psychological one, which is at 3,000 points. Resistance level remains strong at 3,300 points

Hong Kong Hang Seng Index (HSI): Now in short term down trend

The breakout from the consolidation period two months ago was short-lived as the HSI went back in to the trading range which was between 22,000 to 25,000 points. The HSI failed to test the 27,500 resistance level since last month. It went as high as 26,377.99 points before closing at 24,383.99 points. The decline from the high ends the short term up trend as lower lows and lower highs are formed.

The RSI indicator is now below 50 and this shows that the bears are taking over. The HSI is now in a short term down trend. The HSI is currently at its short to long term averages (identified by 30 to 90 day moving averages). The ADX indicator suggests a strong momentum developing downwards. Therefore, we may expect the HSI to test the immediate support level at 23,000 points. Resistance level is lowered to 26,500 points from 27,500 points.

US Dow Jones Industrial Average (DJI): Down trend forming

The DJI struggled and was unable to get out of the major down trend after it failed to test the 13,200 points resistance level since last month. The DJI only managed to climb as high as 13,136.69 points before settling at 12,646.22 points. It broke the immediate support level instead at 12,800 points and this means that the up trend has been reversed.

The confirmed double top chart formation on the daily chart confirms the reversal. However, the down trend is still at the middle formation stage. This formation causes other markets especially the Asian markets to speculate a down trend. Most Asian indices declined lower than the DJI. The down trend can only be formed if the DJI fails to go above 13,132 points. In the mean time, the DJI is expected to fall further and may test the 12,100 points support level. Resistance level remains at 13,200 points.

Asia Trader and Investor Convention (ATIC), HCMC, Vietnam

Have not updated blog for some time as I was preparing my presentation for Vietnam.

Yes I will be in Vietnam to speak at NextVIEW's Asia Trader and Investor Convention (ATIC) in Ho Chi Minh City. For more info on ATIC, visit www.theatic.net.

Updating this blog on my PDA, on KLIA Express.

Ciao...