STOCK MARKET OUTLOOK: KLCI beginning to show signs of jitters.
Possible weakness if Asian markets react to weak Dow on Friday.
On Friday’s close the KLCI was down by 7.62 points or 0.57% at 1339.30 on slightly lower volume of 682 million shares traded. Decliners led advancers by 371 to 293 with 260 stocks unchanged.
1. The Dow Went down 162 points on Friday to close at 10,620, while the UK Footsie index, French CAC and German DAX lost even more, between 3 to 4 %. 2. The reason behind this weakness is because of renewed concerns that Greece’s sovereign debt crisis will trigger a breakup of the European currency. 3. With the world’s equity indices all falling one after another, how long can our Malaysian index stand? 4. So far, our index has been very impressive. But like I said, no country is an island. 5. For now, our finance stocks like CIMB, PBBANK, MAYBANK, HLBANK, RHBCAP, and even AFFIN still managed to stay firm. 6. So are stocks like KKB, AXIATA, TM, TNB, etc. 7. So as long as their stops are not hit, these stocks remain a “hold”. 8. But lower liners and others that have “S.A.’ or “Stay Aside” in our “REC” column means that these stocks are not to be touched. 9. In short we are not calling a “buy” on Monday. 10. The lower KLCI even suggests that this could be the start of weakness for our KLCI. 11. But I must admit that our Malaysian KLCI is currently one of the strongest “bourse” in the world” as you can see that it is still above the “clouds”. 12. The Ichimoku charts of the CAC, DAX, FTSe UK and DJIA charts in the excel spreadsheet continue to remain below the clouds, suggesting the markets are already in bearish mode. 13. So in short, we expect the Asian, Europe and U.S. markets to remain weak and we are sidelined as a result for now. We will not re-enter until the Malaysian stocks trigger buy signals based on our CBO 20-10 system. 14. The ringgit strengthened to 3.1920 from 3.1980.
Ichimoku chart: Span A resistance: 1288/92 (Revised on 2/03/10)
KLCI: STAY ASIDE/GOING TO GET BEARISH/BUY @ 1350 OR HIGHER
DOW ICHIMOKU CHART: WEDGE BREAK DOWN / WEAK
HANG SENG INDEX ICHIMOKU CHART: BELOW CLOUDS/L/T WEAK
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