Looking Ahead: Bull or Bear??

KLSE

STI

Market has continuously defied the odd to hanging on, despite consecutive 2 weeks of over buy. This is what I called Sucker Rally! A very typical bear rally, which up more than 20% from the bottom we see at last month.

The traders are pumping up the price and supplying all the juices. Adrenalins are flowing, making the brain getting excited and ecstasy. Everyone is trying to jump into the market, as they fear that they may miss out the train. Let us use Fibonacci tool to make some analysis on Asia regional index to determine the market direction:

STI index has up more 25% for the past month. if we take 1950 as the peak and using Fibonacci Retracement analysis, STI is well supported at 1830 now. The last 2 candlestick pattern have showing consolidation has taking place. If STI drop below 1830, it will find support at 1760. May is the reporting month for many blue chips in STI. Any result which is not "WORST" than expected will send STI testing 1950 again!

Let us look at KLSE index. Absolutely amazing. The good news from M'sia government to abolish 30% Bumiputra Equity limit has helped lifting the market, despite we see Evening Star appear at Wednesday. It is more and more likely that KLSE going to test 1000 points now. However, 1000 points will prove to be a very strong resistance!