Market Outlook

Dow Jones has successfully broken through 8100. It is very likely Dow going to test 8600 soon. 8600 will be a critical resistance point. The first break through is most likely to be retraced back. It is interesting to see how it settles down, either above or below 8600.

As i had stated previously, KLCI is going to test 1000 and indeed, it not only test it and break through successfully. Now, we shall see how KLCI settle down. A rally has started. Along the way, there will be some profit taking. Let’s see how it settles down and we can conclude which direction it heading to by end of the week.

For STI, the top-notch resistance has been broken through! Too fast and too furies! This is what I can say. STI has up >5% in one day. It is absolutely absurd and amazing in the same time. The high buying volume only means one thing to me, the traders is pushing up the price, to trap speculators and those who can’t resistance the temptation of GREED! Yes, indeed this is a significant breakthrough. STI has back to positive area this year. In this case, same as I had explained previously, it is important to see how it settles down and finding a foothold.

Amazing week started with some amazing thrust from all over the World stock market!

Dow testing 8100 again but fail to make a cut !!

DJI

It is very interesting to use Fibonacci tool to analyze the movement of stock index. Dow, again, unable to hold on early gain to successfully making a foot mark at above 8100.

The longer head tail of the candlestick suggests that profit taking and more sellers at upper end. Dow has trying several times to break through this 61.8% level (8100). However, it was not successful.

Next week, It goings to get more exciting, as any significant breakthrough will be signal another round of rally. Let us sit down relax and watch how the market unfold next week.

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!