KUALA LUMPUR STOCK MARKET OUTLOOK: Forecast for Friday, June 29, 2007: KLCI can fall further if 1348 breaks down but any rebound can ‘save’ the market from a downtrend. Watch!
Technically speaking:
1. As at Thursday’s close at 1350.72 the KLCI was lower by 6.71 points or 0.49%. Losers led gainers 511 to 393. Trading volume was 1.0 bln shares.
2. The local bourse was under selling pressure alright with stocks like BAT, IJM, KLK, IOICORP, BURSA, ASTRO, HLFG, SIME and COMMERZ weighing down on the KLCI.
3. Stocks are weak, and many of our stocks have triggered sell signals, like MRCB, EMICO, ENCORP, AIRASIA, ATIS, FABER, KUB, PBBANK-CA.
4. They are sold out as they have hit our sell-stop levels.
5. Right now, with the KLCI at the brink of falling below the lower Bollinger band, we would rather be safe and reduce positions by selling out those that have hit our stops.
6. But if the KLCI does not fall below 1348, the lower Bollinger band, but instead stage a rebound today, we may have to r-enter some stocks that we have sold out.
7. But as of yesterday’s close, we would classify this market of ours as weak.
8. Today we would wait-and-see, and stay out of the market.
9. There is no stock to watch.
10. The ringgit strengthened back from 3.4810 to 3.4650 for a gain of 160 pips. This could be a hint of a stock market rebound today.
CONCLUSION: The Dow rebounded 90.07 points, yet we lost 6.71 points or 0.49%. What is going on? It would seem that nothing works for the Malaysian market, regardless of how the Dow performed. What a disappointment. We hope to see a rebound today as any fall below 1348, the lower Bollinger band support may result in lower lows. Note that the RSI, stochastic and MACD indicators are already on sell signal.
Long-term Upside Targets:1492 (Target amended on 15/6/07).
Immediate downside targets: 1319/1291/1222
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