KLCI Highest Since September

The Wall Street saw lower close today but KLCI defied that by closing highest since September 2008 due to buying on big cap stocks and plantation stocks. However, smaller caps were closed lower due to traders locking in their gains. Note that penny stocks were the most active ones today.

.

KLCI : 1,042.63 up 19.14 points

Turnover: 1.87bil shares, valued RM1.86bil

Up: 358, Down: 307, Unchanged: 204

.

Gainers were KL Kepong, PPB, United Plantations, Sime Darby, Tenaga, Boustead Heavy Ind., Nestle (thinly traded) and Asiatic, all of which are big caps.

.

Active trading seen on Tebrau Teguh and MRCB which are related to the Iskandar Malaysia development. JAKS, KPS and Puncak Niaga which are water-related saw active trade in view of of the meeting between the Selangor state government and federal government to work out the restructuring plan.

.

If the next resistance for the KLCI of 1,050 is reached, we would be looking at end-of-year target of 1,120 as some brokers have been mentioning. I am looking to dump Scomi at RM0.75, Gamuda at RM2.65, KNM at RM0.85, MMCCORP at RM1.95. Hoping these could come before end of May.

.

Bursa Malaysia Journal II

As we read the commentary in the business sections of the mainstream media last couple of days, most of them talked about correction looming. Yet today the KLCI chalked up another double digit increase to close at 953 points, yet another milestone since October 2008.

I read analysis by brokerage houses not to look for their recommendations but looking for reason not to buy. That's my personal view. Looking to take some profit now if target price is reached for both MMCCORP and MRCB:

Next resistance for MMCCORP seem to be RM1.75 - RM1.80, targeting to dump if this ceiling is reach in few days time, otherwise let correction take place and hold.

Say, the sentiment is correct and MRCB benefits from the stimulus package MRCB should be going all the way to a target price of RM1.15. Right now the stock is trending up - for the last 11 days, and it should to be noted that this is already way past the 20d, 50d and 200d MA. So, if it touches RM1.15 would definitely dump some.

Acquisition target is if SCOMI corrects to RM0.365 (currently RM0.41) but otherwise put a ±0.025 blanket on the price, follow through the movement tomorrow and accumulate this one. RHB Research said that the odds of a pullback to neutralize recent gains have increased - let's see if that materialises. Interesting to watch if the hangman candle formed yesterday would see a reversal later this week.

Note: technical analysts say next resistance is at 980.

Beginning of a Bull-Market, or nothing more than just a Bear-Market Rally?

The positive sentiment in the domestic market may hold up pending the Umno party elections this week and could spruce up interest in UEM Land, MRCB, KUB and Kencana Petroleum, all of which are linked in one way or another to the government.

Investors are taking on a more upbeat outlook with the continued gains at closing bell, as we observed a clearly strong sentiment on the Bursa Malaysia right at the start of the new week. Today itself, the KLCI surge 21.48 points to close at 878.3 points.

The table shows that most of the actively traded stocks posted gains.

On emerging market, Mark Mobius, Chairman of Templeton Asset Management Ltd, said in a Bloomberg TV interview that the next “bull-market” rally has begun and there are bargains in every emerging market. He based his view on the 23% jump in the MSCI Emerging Markets Index since the 4-year low of Oct 2007. This is in contrast to the 2.5% drop in the MSCI World Index and 9.5% decline in the Standard & Poor’s 500 Index.

"I have a feeling we’re at the bottom and now we’re building a base for the next bull market" said Mobius. His view is shared by few other investors and portfolio managers. Of course, investors, traders, and people such as myself would be more than happy to welcome the materialisation of their views.

The truth is, while Mobius is very optimistic in his view, personally I would think that the keyword for now is 'cautious', at least for the next few months as there are so many things that are still uncertain. The gains may turn out to be another bear market rally. No one can call the bottom in the stock market correctly and I have never come accross anyone who managed to do it. Even if there is, it is just by mere coincidence. Keep it simple, if I can do it then I do not have to work, it would be like winning a lottery everyday.

Note: MSCI Emerging Markets Index is an index created by Morgan Stanley Capital International (MSCI) that is designed to measure equity market performance in global emerging markets. Malaysia is one of the 26 emerging economies listed in the index as at 2005.