STOCK MARKET OUTLOOK: Overall market expected to be bad. KLCI to test
1208/1136. Lower liners also weak/Reduce positions of lower liners. Stay out of
index stocks.
On Monday close the KLCI was lower by 12.68 points or
1.02% at 1235.22 on relatively lower
volume of 769 million shares traded. Decliners led advancers
by 608 to 119
with 215 stocks unchanged.
1.
Our market is bad. And it
includes lower liners too besides the index linked stocks.
2.
Yesterday’s further drop
of 12.68 points to 1235.22 is seen as a confirmation of the bear flag that was
triggered by the market on Friday.
3.
It was already bad based on
Friday’s close as there was already a “bearish flag breakout”.
Yesterday’s long black candle confirmed Friday’s weakness.
4.
I said that there was a
chance for lower liners to rebound yesterday, but this was not the case. We saw
how lower liners took a beating yesterday, so much so we now have a string of
stocks with sell signals.
5.
I believe yesterday’s
weakness in lower liners is not over. It is only the beginning of further
weakness. The Fledgling index, which reflects lower liners strength/weakness, is
warning eminent weakness today. I expect a break below 7790 or lower, which will
confirm weakness and a sell signal for lower liner stocks.
6.
Today, I hate to say this,
but subscribers and investors should “get ready to sell”. If your stocks’
sell stops are hit, I suggest selling and stay out. Some traders will not sell
because of losses, but it is better to lose a little than a lot. Learn to live
to fight another day. Go back in when prices recover, not now.
7.
The following stocks have
triggered sell signals. They are: KEURO,
TCHONG,
8.
Besides the above, which
have triggered sell signals, the following are on the verge of falling into a
bear trend. I suggest reducing positions on the following stocks. If their stops
are hit, sell out totally.
9.
These weak stocks are: AZRB
(SELL 2 0.87 OL), GAMUDA (SELL @ 2.62 OL), IJM (SELL @ 4.27 OL), JAKS (SELL @
0.71 OL), MRCB (SELL @ 1.30 OL), MUDAJAYA (SELL @ 4.74 OL),
WCT (SELL @ 2.52 OL), LIONDIV (SELL @ 0.42 OL), PROTON (SELL @ 3.89 OL),
AFFIN (SELL @ 2.56 OL), ECM (SELL @ 0.64 OL), LANDMARK (SELL @ 1.18 OL), MAYBANK
(SELL @ 6.69 OL), RHBCAP (SELL @ 5.16 OL), TIMECOM (SELL @ 0.36 OL), YTLPOWR
(SELL @ 2.12 OL), 3A (SELL @ 2.00 OL), EVERGRN (SELL @ 1.37 OL), HIL (SELL @
0.79 OL), IRCB (SELL @ 1.03 OL), KINSTEL (SELL @ 0.94 OL), KNM (SELL @ 0.74 OL),
LATEXX (SELL @ 3.62 OL), LINGUI (SELL @ 1.02 OL), LMCEMENT (SELL @ 6.18 OL),
LIONIND (SELL @ 1.54 OL), E&O (SELL @0.97 OL), GENP (SELL @ 5.98 OL),
IJMPLNT (SELL @ 2.35 OL), KLCCP (SELL @ 3.20 OL), TALAM (SELL @ 0.105 OL),
AXIATA (SELL @ 3.26 OL), BJCORP (SELL @ 1.16 OL), BORNOIL (SELL @ 0.27 OL),
DIALOG (SELL @ 1.36 OL), FABER (SELL @ 1.54 OL), GENM (SELL @ 2.74 OL), GKENT
(SELL @ 0.85 OL), TIME (SELL @ 0.38 OL), AXIATA-CB (SELL @ 0.41 OL), GENTING-CO
(SELL @ 0.33 OL), RAMUNIA-WA (SELL @ 0.24 OL), AKN (SELL @ 0.155 OL), DATAPRP
(SELL @ 0.33 OL), HLFG (SELL @ 7.45 OL), TDEX (SELL @ 0.22 OL), YTLE (SELL @
0.75 OL). Sell if the above stop losses are hit!
10.
My Dow Theory sell-stop of
1248 and my Ichimoku chart kumo’s “Span B” support of 1260 are hit. With this very
bearish close, I am now calling a “sell” for index linked stocks as the next
downside targets are estimated at 1208/1136.
11. The following diagram is where our KLCI at 1235 is at now. It broke a major pivot at 1248 on Friday last.
12.
Right
now I am not bullish about our market. This is because the Ichimoku
chart of the KLCI chart is totally bearish now as the KLCI has closed below the
“kumo”. The long term Ichimoku
chart is more bearish than bullish as reflected by the Chikou span which has
turned bearish. The short-term trend represented by the Tenkan and Kijun-sen is
also bearish. As well, price is now below “kumo” or “clouds” which also
define the long term trend. A close below 1260 is already a break below the “kumo”.
13.
We therefore may not see
history repeating itself in terms of the Jan-Feb 2010 rally if prices fall below
1248. My forecast of a rally taking the KLCI to 1463 by Feb 21, 2010 would be
nullified.
14.
The U.S dollar is
strengthening and that is probably one of the reasons for the sell-off in
stocks. Let us monitor the US dollar. Dollar has to weaken for the local stock
market to rebound.
CONCLUSION: The KLCI is now in a stay aside
mode. It may rebound but it will have to take some time. Meanwhile, stay out.
Ichimoku charts have called a “sell” signal as price closed below 1260,
while the Dow Theory also triggered a “sell”. Lookout
for weakness on lower liners. If they hit your stops please remember to exit
stocks. Live to fight another day. Do not buck the downtrend.
Upside
Targets: 1305/1436/1463/1524
(Revised targets on 4/1/10)
Immediate downside
targets: 1208/1136/1030
(Revised on 5/02/10)
Ichimoku chart: Span B
support: 1260 (broken)
(Revised on 4/02/10)
TRIPLE SCREEN
P.I.-System Trader (Daily) – Triggered a “sell” signal on Jan 22, 2010 at 1300.45 (Will trigger daily buy signal @ 1254.00 OH by today’s close)
P.I.-System Trader (Weekly) – Triggered a “sell” signal on Jan 29, 2010 at 1259.16 (Will trigger a weekly buy signal @ 1297.46 OH (or higher) by Friday, Feb 12, 2010 close).
P.I.-System Trader (Monthly) – Triggered a “buy” signal on May 4, 2009 at 1009.36 (Will trigger a monthly sell signal @ 1233.44 or lower by Jan 29, 2010 close).
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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