Thursday, April 30, 2009

Weekly Analysis

KLCI Daily Chart

What a volatile week. This may mean the run of this bear market rally may come to a temporary stop. If the daily RSI manage to go into the overbought region again, then look for a possible bearish divergence as a clue that this party may be over. Any more serious pullback should be supported by the new uptrend line.

Looking at the various sectors, so it seems that the penny stocks from Mesdaq and Second Board are following into this bear rally.
Malaysia Longterm Midterm Shorterm
KLCI Down Up Up
Finance Down Up Up
Construction Up (+) Up Up
Plantation Down Up Up
Property Down Up Up
Mesdaq Down Up (+) Up
2nd Board Down Up (+) Up

Construction looks like going into full bull mode. Can the construction sustain this up move? I know the government is pumping money into construction. I wonder where will the government get the money? Selling some bonds won't be enough. With the current political situation, it is a taboo to dip into EPF vault. With CDS at a highly levitated level, the government cannot go into the international market to borrow. I think the best choice is to float Petronas into Bursa. This will be a win-win situation for everyone. It will energize the stock market. Oil and gas counters can be bubbled up. The citizen feel more wealthy. The government can even be assured of remaining in power when the next GE comes. I am sure happy citizens do not want to see any change of government. So, it is a win-win situation for everyone. So, what say you PM Najib?

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