STOCK MARKET OUTLOOK (For Jul 13, 2010): KLCI TESTED 1331 BUT FAILED TO EXCEED 1331 BUT THERE ARE BUYING ON LOWER LINERS

AS RETAIL INVESTORS SEEN ENTERING MARKET.

On Monday’s close the KLCI was up by 2.43 points or 0.18% at 1326.74 on lower volume of 610 million shares traded. Advancers led decliners by 371 to 265 with 277 stocks unchanged.
1. The KLCI went up to 1331 to test our resistance but closed below it, at 1326.74.
2. Let us see if it can re-test and exceed this resistance. If so, this market of ours is truly a unique one as it would be seen as having bucked the world’s trend – which is down.
3. Now with the Dow rally, all the more, investors, especially retail ones are embolden to take up positions.
4. We come to this conclusion that retail investors are nibbling because of the “steadiness” of lower liners. They seem to be garnering some support and refuse to drop further. For instance, TITAN, LIONIND, MEDIA, UNISEM, GTRONIC, GAMUDA, SUPERMX, TOPLGOV, PLS. TIMECOM.
5. There are even lower liners like XINQUAN that breakout of a consolidation to rally.
6. Unless the Dow makes a top and starts to U-turn down (which we are of the opinion), then it is possible that our KLCI and stocks can remain steady to higher.
7. But note that the 1331 resistance has to be exceeded.
8. Selective stocks can rally and our choice today is: 3A, AXIATA, AXIATA-CC.
9. These lower targets of 1233-20/1154/1031 can still be achieved in the near future.
10. The ringgit weakened to 3.2020 from 3.1980.
11. The KLCI’s down targets are 1224/1154/1033.
12. Up targets are 1335 and 1349.


CONCLUSION: Only the KLCI is above the Ichimoku clouds! The whole world’s (almost) indices like the DJIA, DAX, CAC, Singapore, Hang Seng Shanghai, Nikkei 225, Australia All Ords index are below Ichimoku charts. The world stock markets are weak indeed. With such pressure bearing down on Malaysia, we are doubtful if the KLCI can keep its level without succumbing to the world’s market crashing. It is a matter of time before our market corrects and sharply too. Observe the Dow closely. Any plunge below the neckline is a “short” for all indices.
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)