Today we saw heavy correction had spread to Technology stocks and rubber gloves. I notice this process was repeating since Oct and Nov 2009, keeping the KLCI index flat or uptrend but heavy correction on the lower liners. Many counters like rubber stocks and 2nd/3rd liners had been corrected for 3 to 6 days. I expect a technical rebound on some of the lower liners tomorrow and next week. There are 203 up counters and 573 down counters.
FBMKLCIs' Indicators
Bollinger band expanded 26% indicates KLCI30 is bullish biased.
RSI increased to 85.86, indicates KLCI30 is bullish biased.
STC increased with %K=99.28, %D=92.29. Indicates KLCI30 is bullish biased.
MACD line hook up slightly, Indicates KLCI30 is slightly bullish.
KLCI nearest resistance level remain at 1353.96. The support level is 1300 and 1298 (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 started to form a rounding bottom, this indicates KLCI30 mid-term view is bullish biased. However we found that other indexes like FBM-Mesdaq, plantation, construction, property, industrial and technology are bearish biased in short-term. Finance, consumer and trading & services index remain bullish biased.
Review on our stocks pick today
Proton continues its uptrend for 2nd day. The stock price further increased 5.4% to closed at 4.33. The immediate resistance level is 4.60 and the support level is Fibo 4.16 and 4.14. The BB further expands 124% and the volume increased by 86% (4.4 mil shares). All other indicators like STC and RSI are bullish biased. If the daily volume remains active like more than 3-4 mil shares tomorrow and next week, I believe there is no problem to break the 4.60 critical level. Once it broke 4.60, the next critical resistance level is 4.93, which created on 20/11/2007. The mid-term trend had turn bullish after it had broken out the symmetrical triangle. If the regional and KLCI index remain positive, Potentially Proton will break 4.60 soon.
Harta slightly affected by the heavy correction today, nevertheless, the midterm uptrend still intact. On the low risk stocks watch, Axiata, Spsetia, HLFG and TM mid-term are still bullish. On the medium risk stocks, Gamuda and MPHB unable to break out the resistance yet due to heavy correction on lower liners. Despite heavy correction on lower liners, Jaycorp continue its uptrend for another 8.6% however we don't recommend a buy tomorrow as it already up for 2 days. Mid-term view for Jaycorp is bullish. KFIMA was up in the morning however it cannot stand the pressure and corrected for 3.9%. Short-term view for KFIMA is bearish. Tchong is side today; it is not affected by the correction.
Other stocks to watch
Lower risk for conservative investors
Topglove, Maybank.
Medium Risk investors
Dayang and TSM. Monitor Rubber stocks online like Supermx, Adventa, Ruberex and Latexx.They could rebound soon. Continue to monitor GAMUDA break out 2.94 and MPHB 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
