VK TECHNALYSIS SERVICES (VK 技术分析服务): Technical Commentary on KLCI 20/01/10

Wednesday, January 20, 2010

Technical Commentary on KLCI 20/01/10

FBMKLCI continues its uptrend and broke out 1305 resistance level today. It temporary sit above it at 1306.62 (+6.27 points, +0.5%). The market’s volumes increased 5.6% to 1.3394 Billion shares. It is good news that there are 5 CI heavy weight counters like Axiata, TM, GenM, Maybank and IOICorp are contributing the top 30 volumes. This means that KLCI30 components are getting more active now. As mentioned yesterday, we expect lower liners to sell off today after they had been pushed up last couple of weeks. There are 333 up counters and 467 down counters. The lower liners are expected to correct further by sectors or rotationally.

FBMKLCIs' Indicators
Bollinger band expanded 28% indicates KLCI30 is bullish biased.
RSI increased to 78.92, indicates KLCI30 is bullish biased.
STC increased with %K=93.91, %D=90.41. Indicates KLCI30 is bullish biased.
MACD line hook up slightly, Indicates KLCI30 is bullish biased.
KLCI nearest resistance level is 1307.94 (today high) and 1353.96. The support level is 1305 and 1296.75 (the Bollinger mid-band).

All the indicators above are bullish biased for FBMKLCI. We will see more upside for KLCI. By switching the chart to weekly, the MACD start to form a rounding bottom, this indicates KLCI30 mid-term view is bullish biased.

Review our stock pick – Proton

Proton finally broke out from the symmetrical triangle today after it had been consolidated for about 3.5 months. The immediate resistance is 4.14 and the support is at the BBMB 3.96. We expect a higher resistance above 4.24 if it able to break 4.14 in the near term. The BB expanded 84% and the volume increased by 2800%. All other indicators like STC and RSI are getting bullish.
The volumes had resumed >2 mil shares after 22 trading days. This is good news for Proton. If the volumes can sustain above 2 mil shares, we believe Proton will potentially break up more resistances above and retest 4.60 again. Please review Proton daily chart below.

Stock Watch for this week

HARTA had been continously trending up for 3 days and hit another historical high at 7.71 today. The STC, MACD and the RSI are bullish biased but the BB still contracts 11% due to a correction happened 3 days ago. By looking at the mid-term view, all indicators are bullish biased. Due to the bullish view on Harta, we expect the stock price will go higher until it reach its fair value. The immediate resistance is today high at 7.71 and the support is at BBMB 7.07. Please review Harta weekly chart below.

Other stocks to consider

Lower risk for conservative investors
SPSETIA, AXIATA, BJTOTO, GENM, HLFG, TM

Medium Risk investors
TCHONG, JAYCORP, KFIMA
GAMUDA (watch for break out 2.93)
MPHB (watch for break out 1.94)

High Risk investors
NONE, not recommended to buy any high risk stocks at this time

Take note: Always enforce cut loss policy if your stock broke down the support level

Stock Market Language 股市语言

In the stock market everyone hope to "Buy Low Sell High". In practical, it is very difficult to achieve. There are 5% of the investors are able to achieve that however they are not buying at the lowest or selling at the highest. In other word they buy at the RIGHT timing and sell at the RIGHT timing.
每个人都希望在股市“低买高卖”。但实际上是非常困难的。只有5％的投资者能够实现，但是他们不是在最低买进或在最高卖出。换句话说，他们是在适当的时机买进和卖出。

Human nature is full of Greed and Fear. The emotion of human was reflected on the movement of the stocks' prices.
股票的价格变动中反映出人性的贪婪和恐惧。

What should we do while waiting for the market to correct?

No stock to buy very boring right? While you are waiting for the market to correct, you can actually sharpen yourself and get more funds ready for the next run.

1. You can subscript Winchart to sharpen your skill. VK Technalysis Services provides training twice a month in North Malaysia. Other regions please refer to http://www.straitsindex.com/.

2. EPF contributors have an option to withdraw EPF funds to invest on stocks from account No. 1 to standby and get ready for the next run.

For details, please contact VK Technalysis Services
Penang: 012-4168868 (Vincent Liew)
Kedah and Perlis: 012-4259118 (JK)
B'worth, Kulim and BM : 012-4212533 (Wong)

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