CHART OF THE DAY(TUESDAY)30-NOV-10

STOCK MARKET OUTLOOK (For Nov 30, 2010): KLCI REBOUND WELCOMED BUT MANY STOCKS STILL WEAK. ONLY SELECTIVE STOCKS CAN RALLY. BE SELECTIVE.

On Monday’s close the KLCI was up by 3.90 points or 0.26% at 1495.95 on slightly lower volume of 1.04billion shares traded. Decliners led advancers by 463 to 293 with 274 stocks unchanged.

1. U.S. stocks headed to a lower open Monday as concerns about the European debt crisis took the edge off a strong weekend of holiday sales. The National Retail Federation, a trade group, estimated that 212 million shoppers visited stores and websites during the first weekend of the holiday season, up from 195 million last year. Online spending also rose more than 14 percent from Thanksgiving Day through Saturday, according to IBM's Coremetrics. A fuller picture on spending will come Thursday when retailers report their November revenue.

2. Investors have been hoping that consumers, who have generally been spending cautiously since the recession, would feel more comfortable about shopping during the holidays. Many economists believe that consumers will have to spend more freely for the economy to put together a stronger recovery. Traders seemed pleased with the results initially, but it's too soon to tell if sales will remain strong through Christmas.

3. Ahead of the opening bell, Dow Jones industrial average futures are down 4, or 0.04 percent, at 11,026. Standard & Poor's 500 index futures are down 1, or 0.1 percent, at 1,182. Nasdaq 100 index futures are down 2, or 0.1 percent, at 2,144. (Source: Yahoo Finance).

4. Many Malaysian stocks closed on a weak note on Monday despite a rebound on the KLCI. But the bounce on the KLCI was nonetheless impressive because it opened on a weak note, came down 18.03 points to 1474.02 before a strong rally in the afternoon lifted the index back up to neutralize its losses to close up 3.90 points, at 1495.95. This is a pretty impressive turnaround of over 20 points!

5. As a result of this turnaround, the stock index futures contract is now trading at a premium of 2.5 points over cash. This premium suggests that stock players are bullish on stocks.

6. Be that as it may, we see only selective buying on the local bourse yesterday (but we were right on calling a buy on KNM and TWS yesterday!) Only some index stocks and selective lower liners are bullish. The majority are still lacking buying support. Hence buy signals coming from our technical studies remain isolated and few.

7. The ones we see capable of further buying today are: KEURO, TWS, KNM, KBUNAI, AIRASIA,

AIRASIA-CF, IJM-WC.

8. New stock to watch is KSTAR.

9. Moving averages are still positive on the KLCI and many lower liners but are reaching a marginal point where further falls would tip the moving averages into negative territory, till the market towards a bearish phase. Note an important trendline support is 1470 (see chart in excel attached).

10. The ringgit improved marginally to 3.1500 from 3.1525. We are ready to take profit on the ringgit by buying dollars and selling ringgits given the turnaround of the U.S. dollar.

CONCLUSION: The KLCI made a U-turn yesterday, and formed a “hammer” pattern. A hammer seen

after a market dip, is a signal of a possible market bottom. Look for further rebound today.

Upside Targets: 1534(nearly hit)/1681 (Revised targets on 08/11/10)

Immediate downside targets: 1480 (hit)/1445/1342/ (Revised on 16/11/10)

Ichimoku chart: Span A SUPPORT: 1416 (Revised on 16/11/10)

KNM: H/FURTHER BUY/INVERTED HEAD & SHOULDERS BOTTOM

KEURO: BUY/WEDGE BREAKOUT/TARGET 1.50

CHART OF THE DAY(Tuesday) 02- Nov.-2010

STOCK MARKET OUTLOOK (For Nov 02, 2010): WHILE RIDING THIS BULL WE MUST BEWARE OF THE BEAR!

On Monday’s close the KLCI was up by 4.00 points or 0.27% at 1509.66 on higher volume of 1.27 billion shares traded. Decliners led advancers by 440 to 344 with 316 stocks unchanged.

1. U.S. stocks rose sharply Monday after reports showed growth in manufacturing activity accelerated in both the U.S. and China last month. The market was also getting a lift ahead of midterm elections and the Federal Reserve's meeting this week where the central bank is expected to announce a new economic stimulus program. The Dow Jones industrial average rose about 50 points in late morning trading. (Source: Yahoo Finance).
2. With expectations that the Dow can rebound to close at its year’s high last night, our KLCI should see further rebounds today.
3. As at yesterday’s close, the KLCI is edging closer to test its highest close of 1516.22 registered on 11/1/2008.
4. But what is not a welcome sign is that there were more decliners than gainers in yesterday’s activity. This is called “negative market breadth” and should deserve some caution as you try to make some money from the stock market!
5. When a market has negative market breadth, its rally is not running on two legs but one leg, hence it could be unsustainable. As such we should be cautious and sell on any sharp decline. While riding this bull we need to beware of the bear.
6. Still, we expect the KLCI to test its 2.618 times wave 1 target of 1534 before correcting.
7. At this level, the KLCI is at its second highest close EVER. The highest close was at 1516.22
clocked on 11/1/2008. The highest high registered by our KLCI was at 1524.69 on
14/1/2008.
8. We have never been so high (in terms of the main KLCI index) in our nation’s history. Not in 1994, not in 1997, not in 2000 nor in 2004. It was only in 2008 that saw our KLCI closed at 1516.22 – its highest close ever and yesterday we are just a hair’s breathe away from this record high!
9. At yesterday’s close of 1509.66, we are clocking at its second highest close ever. But we are cautious because the strong volume was clocked with more losers than gainers suggesting selling volume.
10. We need to see positive market breadth today accompanied by a rise in the index if this
market is to remain technically strong.
11. Not all stocks are being played up. Mostly it is the index linked and selective stocks from the finance, property, oil and gas and GLCs are being played up.
12. This weakness is very obvious as can be seen from the higher number of losers than gainers.
13. Stock picking is therefore the key to making money in this stock market bull run!
14. Our stocks to watch that are likely to run today are: DNP, GAB, GUANCHG, AFFIN*, AFG, AMMB, OSK*, RHBCAP*, APM, DRBHCOM, HWGB, GUOCO*, IJMLAND, INCHKEN, L&G*, SUNRISE,TEBRAU, DAYA, AFFIN-CA, AIRASIA-CF, IJMLAND-WA.
15. New stock is KFC.
16. GUOCO – take profit at target 1.48.
17. We like L&G, TEBRAU, AFFIN, RHBCAP, OSK, GUOCO.
18. Please check out our stock charts in Excel format before you invest.
19. The Ichimoku charts of the Dow as well as the rest of the world are up. Even Tokyo, which is amongst the world’s weakness bourse, is turning around with the close ABOVE clouds or “kumo”. As such we expect the Dow to be up.
20. We expect Dow to rebound to test 12500 (amended based on Wolfe wave). We are still long on Dow CFD or S & P 500 index futures.
21. The ringgit was slightly strengthened to 3.0900 from 3.1100. We are still long ringgit/short USD.
22. CONCLUSION: The KLCI is now at its second highest level in its history!!! Expect higher
highs! Buy. Look for test of 1534. Index linked stocks still can rally. Buy and take profit on
rally.
Upside Targets: 1534 (Revised targets on 02/09/10)
Immediate downside targets: 1224/1154/1094/1033 (Revised on 5/07/10)
Ichimoku chart: Span A SUPPORT: 1292 (Revised on 5/7/10)

KLCI: H/SELECTIVE BUY/EXPECT FURTHER RALLY