Pegging or not?

People always have the view that FBM KLCI is pegging to the US market. No matter the overnight Wall Street slips or rises, we will blindly follow the footstep. Somehow, I think that the current market condition is too fragile and thus, this theory is temporary not applicable. So where are we now? I will leave the answer for you to figure out!

29 November 2010

Indeed, FBM KLCI did follow the overnight footstep in the early morning and plunged 17.39 points to 1,474.66. It was then staged a V-shaped rebound towards 1,484 level and subsequently climbed at a constant pace towards previous close. In the last 5 minutes, FBM KLCI jumped 3.9 points and ended the day by reversing the red into black at 1,495.95 on the back of the rescue plan for Ireland.

Petronas Chemical (PCHEM) has replaced BJTOTO in the FBM KLCI. Its traded volume of the day was 2 digits more compared with all the blue chips. Despite higher liquidity, the change in absolute term was equivalent to SIME, 9 sen. Top gainers were PCHEM, SIME and CIMB whilst top losers were GENM, GENTING and PPB.

Discussion on the issue of Korea Peninsular

South Korea announced earlier that it would conduct an artillery drill on the island, where the previous attack took place by North Korea. It was then cancelled without explanation. It could be a brilliant decision or I should say could be a good ethic that everyone should learn for world peace. If another confrontation between the two parties is being raised up again, the global market may experience another shoe to fall. Nobody can imagine how serious will the consequences of the next artillery test be. Thus, we definitely do not afford to give it a try or to have a war in the current market condition, where the US$113 billion bailout package for Ireland failed. Based on the current financial position, I believe US would not like it as well.

Back to the story, the whole point of the last test-firing by North Korea was all about the “Northern Limit Line”. What about that line? According to the Wall Street Journal, it says "North Korea objects to the line chiefly because it forces cargo and fishing vessels on its southwestern coast to take lengthy routes to international shipping lanes and open water." Will it get to change the maritime border? We will have to wait and see.

30 November 2010

Regional markets hit by the failure of Ireland rescue.
Nikkei 225 hit by the lower industrial production and higher jobless rate. Industrial Production rate m-o-m dropped 1.8% from September whilst jobless rate increased from 5% in September to 5.1%.
FBM KLCI may bias downwards due to the failure of Ireland rescue and the overnight losses.

ALARM

• Malaysia Money supply will be released today.
• Malaysia trade balance will be released tomorrow.

KULIM is eyeing for a rebound?

Highlights
• 5-day moving average (pink) looks set to cross above 7-day moving average (blue)
• Share price rebounded on previous gap level
• RSI neutral
• Daily fast MACD seems to be on the rebound
• The gap between DMI started to widen again

Shout out
I think that the trading volume may make a comeback to boost the share price towards the resistance at RM14.00. Support can be found at RM11.76.

Disclaimer: The company analysis that appear in this blog is merely facts gathered from different sources and the author's personal view. It is not a buy or sell recommendation. The author do not guarantee the accuracy of the facts being presented. Please consult your investment advisors before acting on any information provided by the analysis above.

High tone

25 November 2010

Snapshot – FBM KLCI

FBM KLCI plunged severely once market open on 24 November 2010 after the conflict in Korea Peninsula. However, the overnight news better-than-expected increase in US GDP has brightened up the market sentiment and thus, FBM KLCI regained its losses and closed 1.01 pts higher at 1,488.54.

People tend to be forgetful and thus, with the announcement of positive US economic data, people have set the uncertain issues aside such as the Ireland debt issue and the conflict in Korea Peninsula. Along the side of a series of corporate activities, plans and programs, many research houses have revised their target upwards, some even up to 1,900 pts.

Today, 25 November 2010, market proves again that the BULL is not over but sustainable. Intra-day chart shows that FBM KLCI remains upbeat, climbing on a strategic staircase towards the 1,500 psychological level again. The top gainers among the blue chips are GENTING, AXIATA and CIMB. The index was then bounded between 1,495 and 1,498, but biased towards the lower boundary. Overall, market breath was positive with 432 gainers and 328 losers. FBM KLCI closed 7.95 pts higher at 1,496.49.

Highlight – KNM Group Berhad

After being bashed down for sometimes due to the failure of privatization deal in April 2010, KNM has finally made a comeback. KNM opened with RM0.435 earlier, touched the high of RM0.50 and finally closed at RM0.495, representing a gain of 6 sen or 13.8%.

KNM has recently obtained RM680m Uzbeksitan job and its Q3 result had just announced on 24 November 2010 which has met the consensus expectation.

KNM called for stock split 1 for 4 in February 2010 and now they are calling for consolidation share to reverse the order.

Technical wise, improved MACD and flat prices hints for a positive divergence. Support lies at RM 0.40 whilst resistances locate at RM0.54 and RM0.70. Historical lowest point was at RM0.32.

With such configuration, I think upside momentum is overtaking the downside.

ALARM

• Petronas Chemicals Group Berhad will be listed on the main market tomorrow.
• Malaysia Consumer Price Index for October 2010 will be announced tomorrow.

Disclaimer: The company analysis that appear in this blog is merely facts gathered from different sources and the author's personal view. It is not a buy or sell recommendation. The author do not guarantee the accuracy of the facts being presented. Please consult your investment advisors before acting on any information provided by the analysis above.

When Black dot appears on the Bull

On 23^rd November 2010, FBM KLCI took a wild ride on roller coaster. It has been held above the 1,500 psychological level since end of October except 12^th and 18^th of November, closing at 1,499 points and 1,496 points respectively. People have been jittery over the current market condition and it has yet to sketch its next movement. Close to 10a.m., the index tumbled about 14 points from initial gains to 1,494 points, a knee-jerk reaction of blue chips amid the decline over the regional markets and the lower than expected 3Q local GDP. We should look at the upcoming announcement of US and UK GDP on 23 and 24 November respectively.

Despite a gentle rebound from early loss during the mid-day, FBM KLCI remained below 1,500 level and subsequently continued earlier loss to end the reddish day at 1,487.53 points, which closed 15.67 points lower than yesterday amid the Ireland debt issue and the conflict between South and North Korea.

Technically, FBM KLCI has fallen below its 30-day moving average and is getting closer to its 50-day moving average. Investor confidence has been dampening as we can see from the declining volume. With such a configuration, we should keep our fingers crossed for overnight announcement of US GDP and for world peace. !_!