STOCK MARKET OUTLOOK (For Sept 03, 2010): KLCI MADE 13 NEW HIGHS. THE JAPENSE SAYS STOMACH IS FULL. WE PREFER TO TAKE PROFIT ON RALLY. STAY OUT OF LOWER LINERS EVEN THOUGH THEY REBOUNDED.
On Thursday’s close the KLCI was up by 9.11 points or 0.64% at 1441.07 on high volume of 1.07 billion shares traded. Advancers led decliners by 511 to 256 with 258 stocks unchanged.
1. True to form, the KLCI rose by another 9.11 points to close at 1441.07 after reaching an intra-day high of 1441.80. This is just 0.20 short of our target of 1442! One up for the Fibonacci technique!
2. But can it go further than 1442?
3. Judging by the fact that gainers are index stocks like AIRASIA, AMMB, IOICORP, MMCCORP, PUBLIC BANK, RHBCAP, TNB, UMW and YTLPOWR, it is probable that the KLCI can stage a breakout of 1442.
4. If so, then one strategy would be to re-enter “buy” on the KLCI stocks at 1443 or higher at close as we will now peg our next target at 1478 (this being 2 times Wave 1) and 1534 (this being 2.161 x Wave 1).
5. Stocks-to-watch are: PBBANK, RHBCAP, BSTEAD, SAPCRES, UEMLAND, MMCCORP, TENAGA.
6. Lower liners have started to rebound and come alive. But we are not convinced at this point of a sustained rally. Let the market move up further before we are convinced.
7. Right now, just concentrate on selective index stocks.
8. We are cautious even as it looks very bullish on the KLCI and stocks because the KLCI made “13 new highs”. To the Japanese traders they would say “the stomach is more than 80% full” – time to get out. And “13” is a Fibonacci number!
9. We expect Dow to rebound further from now on. Hence we are long on the Dow.
10. The ringgit was about unchanged to 3.1265 from 3.1238. We are now long ringgit/short USD.
11. CONCLUSION: The KLCI nearly hit 1442. We would take a rest if KLCI cannot close above 1442. But any close @ 1443 OH is a “re-entry” buy for KLCI stocks as the next targets are 1478 and 1534.
Upside Targets: 1442 (hit)/1478/1534 (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)
TRIPLE SCREEN READING WITH THE F-1 TRADER SYSTEM
P.I.-System Trader (Daily) – Triggered a “buy” signal on Aug 16, 2010 at 1370.58 (Will trigger daily sell signal @ 1424.97 OL by today’s close)
P.I.-System Trader (Weekly) – Triggered a “buy” signal on June 18, 2010 at 1317.69 (Will trigger a weekly sell signal @ 1358.94 OL by Friday, Sept 3, 2010 close).
P.I.-System Trader (Monthly) – Triggered a “buy” signal on May 4, 2009 at 1009.36 (Will trigger a monthly sell signal @ 1294.36 or lower by Sept 30, 2010 close).
P.I.-System Trader Triple Screen: “Buy-Buy-Buy” – Short-term Strong, Medium term Strong and Long Term Strong: 3 screen buy. Market index is still “strong”. Re-enter @ 1443 OH
Disclaimer: This analysis is based on pure technical analysis. Statements and comments are subject to the limitations inherent in this technique of analysis and may change as the market unfolds. Those wishing to trade are advised to seek professional opinion. Our comments should not be construed as market advice and is not a solicitation to buy or sell any stock/futures referred to herein, if any PI Graduate Studies Sdn Bhd or its staff may have positions in stocks/futures covered in our newsletter.
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