Need your expert opinion on this

PBBANK is announcing div in July... price steady rock, how to buy more!!!

between 4D & Tanjong, Tanjong dropped more. anticipating a poorer quaterly report?

Tuesday, June 23, 2009
Are you convinced the Bull was a suckers Rally?
Do you need to be a certified chartist or scientist to tell what the resistance levels are for either Kuala Lumpur Composite Index (KLCI) or Dow Jones Industrial Average? If youre still clueless why the recent spike in the stock markets then go figure, will ya? The only difference between current global recession and the much compared 1929 Deep Depression was the easily available of money, lots of them. We, especially the U.S., was printing money like theres no tomorrow. But who cares as long as there is tons of banana money floating on the street for our consumption? In a nutshell were living in a borrow-money in the name of stimulus packages. When the economy recovers, the government will do its best to recover these trillions of dollars in bailout money.

Its nice to have certain governments such as the Malaysian who preferred hiding their head under the ground as if nothing happens, although they ultimately disclosed that the countrys first quarter contracted by 6.2% and the second quarter will not be any better. Dont you hope that the PM will scream that the country will not enter recession comes rain or shine? Fortunately majority of the people were ignorant of the economy hence the crazy spending and this help the government a lot. The pumping of taxpayer money into the stock market helps the situation. All the fund managers will tell you secretly that local funds such as EPF and PNB have been aggressive net buyers and not foreigners. In fact the foreign shareholdings in the local stock market stood at the low of 20.7% - same as in 2004. A staggering RM93 billion of net outflow registered in 2008 alone.

Of course along the line youve some suckers analysts who tell you the worst is over and Malaysian stocks are starting catching up. Strangely these analysts were blowing the same trumpet again and again even during consolidation stage and after the World Bank cut its 2009 global growth forecast - the world economy will shrink by 2.9 percent and global trade is expected to plunge by 9.7 percent this year. Therere some funnier analysts who were quick to caution that the local stocks skyrocketed too much and too fast, right after the DJIA plunged. I bet your grandma or grandpa can become a better analysts than these nuts. Thus youre seeing bloods on the trading floor today after Dow tumbled 200-points overnight, a sight quite distance to us since the spike.

U.S., unfortunately does not have the luxury of using hundreds of billions of dollars to spin their stock market because the bailouts were everywhere, so much so that President Obama thought it would be wise to avoid such issue, at least for now. Its pretty simple really  as long as the unemployment is increasing or stagnant, its a sign that the economy is still in bad shape. You need consumers to start spending from condom to houses, dont you? The simple question was  if the U.S. financial institutions were magically recovered from its cancer, why there was no rush to snap up stocks such as Citigroup, Bank of America, JP Morgan and Wells Fargo? In any bull run the financial stocks would be the first to skyrocket, no? And have you seen the global credit card losses as of today? Frankly, the last thing I wish to read is the burst in the credit-card problem because that will definitely spark the global recession Part-II, while were still finding the silver bullet for the Part-I.

In reality the KLCI will find it hard to breach 1,100-points, the same way DJIA will not breach the 9,000-points  at least for now. So you know when to sell or short. But you may argue that youve entered right after the 1,000-points (KLCI) and has since made good profit. Congratulations but now that the KLCI is approaching 1,000-points what are you going to do? Are you still holding *grin* betting that this is a temporary setback? Or are you discipline enough to unload in preparation for the worst? This is the best part because your greed and fear started to trick your judgement.

Hi Everybody,
In fact, we have turned slightly negative since last week after the KLCI cut below the 10-day SMA near 1,077 (RHB's clients can check on our daily reports on www.rhbinvest.com).
Technically, the KLCI has turned into a short-term negative mode after falling below the 10-day SMA, and it was ready for further retreat.
We have highlighted in our reports that the KLCI should be heading towards the 1,050 critical level, thus, since last week, we have been asking our clients to trim their short-term trading positions.
We also warned that falling below the 1,050 level will trigger a major correction signal on the KLCI, considering the rally since mid Mar of 836 to recent high of 1095.
The market had rallied some 30% from Mar, and based on today’s trading, it only retraced some 23.6% on Fibonacci Retracement level.
Take note that a healthy market can retrace up to 38.2% FR, in this case, it is somewhere around 996 – our next critical support level is at 980.

As it plunged below 1050 on Monday, it has triggered the correction mode, hence aiming ultimately towards the 1000 psychological level and the 980 critical support level.
Yesterday’s positive performance can be expected as our local fund managers are generally still in the positive mood, hence bargain-hunting activities are normal considering the sharp fall in recent sessions.
But, if it fails to garner strong bargain-hunting support on Wednesday, i.e. fails to retake the 1050, selling momentum will intensify hence leading to a sharper fall ahead. 

On our trading strategy, as the market has just turned into a correction mode, any rebound should be short lived until or unless it can retake the 1050 critical level. But investors should be aware that to turn back into a positive mode after recent plunges, the market must also generate a sustainable and strong daily trading volume of around 1.6bn - 2.0bn shares. Then again, the index must also retake the 10-day SMA near 1070 to switch on the trading mode, and it must also remove the recent high of 1095 to revive the bullish trading sentiment.
Yes, there are multiple resistances overhead.

As such, we prefer to stay negative and wait for the index to correct further. Our desire support zone to relook at the KLCI is around 980 - 1000.
Overall, the long-term trend is still healthy even with further correction to the 38.2% FR level near 980 – 990 region. The market just needs to cool the recent bullish sentiment down and to reposition itself for future recovery moves.
For short-term investors, you just need to wait a little bit longer.

RHB Technical Research Dept.
Banyu