CHART OF THE THE DAY(July 21, 2010)

STOCK MARKET OUTLOOK (For Jul 21, 2010): EXPECT KLCI AND SMALL CAP STOCKS TO RALLY FURTHER.

On Tuesday’s close the KLCI was up by 4.32 points or 0.32% at 1337.67 on higher volume of 1.12 billion
shares traded. Advancers led decliners by 466 to 278 with 250 stocks unchanged.
1. The local KLCI rose on strong volume.
2. This is technically a strong signal of a bullish market.
3. We expect both the KLCI and small cap stocks to feature in today’s rally as there is a “flag breakout” on strong volume no the KLCI.
4. Our stocks-to-watch are: IJM, KEURO*, MRCB, MUDAJYA, ZELAN, KKB, PELIKAN, PBBANK, RHBCAP, COASTAL, EVERGRN, SUPERMX, UEMLAND, GENTING*, KPJ, MEASAT*.
5. Watch out for KEURO, KKB which have a “wedge breakout” pattern and Genting has an “upgap” which indicate strength. The others have symmetrical triangle breakouts, which are
also strong continuation patterns.
6. I strongly suggest investors to re-enter our market.
7. Do not short KLCI stock index futures yet nor the Dow 30 CFD or futures. I don’t see it ready to fall yet.
8. Look for our KLCI to a hit new year high of 1352 and 1387.
9. I am still looking at the Dow pulling itself up to test a Wolfe wave target of 11135.
10. These lower targets of 1233-20/1154/1031 will just have to wait.
11. We are looking at 1352 and 1387.
12. The ringgit strengthened to 3.2100 from 3.2230.

CONCLUSION:The KLCI is still above the Ichimoku clouds and this means a buy signal on selective stocks even though our market fell yesterday. The DAX, Singapore index, are also above clouds and Hang Seng index
is AT the clouds. So it looks like the world’s markets are recovering from their lows. Watch out for the Dow to lead Asian markets this week. The fact that Asian stocks, especially Malaysian stocks did not fall in the face of
a 261 points drop in the Dow is a positive sign of de-coupling between Dow and Asian indices – at least for now!

Upside Targets: 1365/1418 (Revised targets on 21/06/10)
Immediate downside targets: 1224/1154/1094/1033 (Revised on 5/07/10)
Ichimoku chart: Span A SUPPORT: 1292 (Revised on 5/7/10)



DOW JONES CAN RALLY TO TEST 11135/ H & S FAILURE?