Is this a turning point?

Is this a turning point? This questions is tremendously difficult hard to be answered. Volatility had increased and the money remain in the market is those brave money, which are intended to be make or die. The high spikes in MESDAQ and KLCI are indeed relieving, but it is not inspiring. The volume in KLCI remains relatively constant while the MESDAQ (although accompanied by positive price to volume action) is on a clear weak downtrend (due to previous insane and unpredictable charting formation). Obviously, differ and divergences of opinions in the market are huge, and the small players are arguing with each others. The big boys and foreign funds are found no where. The Thailand bite and bark at them, and yet, why are they not shifting their fund to Malaysia? (Obviously, foreigners still remember how they are bitten by Dr M)

While many friends are seems worried, anxious and uncertain, I wish to confirm with them that the bull is not yet died. It is only half dead. As a risk taker, I suggest invest partial of the capital in the market, as the Bull seems to have strong support by Najib and Malaysia government. Besides, GLC are getting more and more efficient, CNY effect are moving near, and many of the penny chips are almost at the year end low. We can never be certain anyway, if our decision today will result in a huge gain, but it is a risk worth taking. Thus, I suggest entering some penny stocks which their prices have already been pulled to the strong support, is definitely a risk worth taking.

Speculation Dilemma

Logically, i wanted to put some brave money to the market;
Emotionally, i am frightened by the strong down force.

If the fundamental is strong, Thailand effect will cause minimal impact to our country.

In fact, the problem is instead an opportunities, for the country leader to convince the outsiders on Malaysia support on a free market.

Opportunities are around the corner...
The brave one will found it very soon.

馬股小股災
綜指大跌1.9%

泰國中央銀行實施資金管制，杯弓蛇影的基金經理紛紛從區域股市撤退，亞洲股匯市慘遭池魚之殃；馬股更因此出現小股災，寫下7個月單日最大跌幅。早盤開高的綜合指數走勢直轉急下，原是外資最愛的藍籌股變成湯手熱芋，午盤因龐大賣盤跌深至1049.88點，閉市時掛1060.36點，劇跌21.24點或1.96%。全場下跌股遠超上升股，下跌股782只，上升股卻只有區區132只，另216只平盤。總成交量8億9339萬股，成交總值13億8981萬令吉。馬股所有指數皆收黑，二板指數挫1.91點或2.13%至87.57點，大馬富時全股指數則報6905.17點，暴跌142.42點或2.02%。分析員卻大派定心丸，表示泰國當局的措施屬個別事件，股市短期內雖出現震盪，但不會引發金融風暴。3大重量級藍籌股國家能源（TENAGA,5347）跌勢最慘重，下挫40仙至10令吉80仙；緊隨後頭的馬來亞銀行（MAYBANK,1155）收在11令吉50仙，掉30仙；馬電訊（TM,4863）跌勢較輕，微挫10仙至9令吉55仙，種植股巨頭IOI集團（IOICORP,1961）暴跌70仙至17令吉40仙。雲頂（GENTING,3182）和名勝世界（RESORTS,4715）也不敵賣壓，齊跌50仙至31令吉50仙和14令吉20仙。第3季取得亮麗業績的丹絨（TANJONG,2267）反而逆流而上，微揚20仙至13令吉60仙，成為表現最佳股項。 （retrieved from 星洲日報／財經‧2006/12/19）

Contrarian Strategy

Some useful contrarian strategy found. IN fact, I am thinking that these signals could be much more relevant than any existing technical signals found on the traditional TA books.

As it really need much time to compile a comprehensive list, here we got only 3 for your reference.

Contrarian #1: When the forum is hot, and become hotter, and become very hot, sell your entire share.

Contrarian #2: When unrelated people start to talk about stock, perform partial profit taking. I some how wonder, how the syndicate able to know so precisely that just at the moment so many small fishes join the game, they straight kill them all. In Malaysia, seems like the syndicate is very hungry and don’t really want to wait for more fishes to be trapped.

Contrarian #3: A newspaper buy is a buy signal. But if the buy recommended does not result in higher price in the market, sell instead.

Don’t be a contrarian for the sake of being a contrarian. When to be contrarian and when not to be is an art that need years of experience and concentration on the market.

~ Booffett ~

The Market at 18 December 2006

Market situation. After 2 months of continuous rise of KLCI, the huge correction happened last week. Many stocks (precisely, most of the stock) drop tremendously, where rough estimate, a total of 30% of the market capitalization was wiped out in the penny stocks sector. MESDAQ, Second Board and Technology lead the bear. After detail observation on the drop of price, it is clear that the drop in price is largely (if not completely) caused by the negative market sentiment. There are no any strong economic indicators that are showing the adverse condition in the country, instead, economics indicators are supporting a rise. While the fair value of these penny stock is still hardly judged, particularly in a Malaysian context, many stocks are dropping (approaching) to the low value of the year.

Recommendations. The outlook is very hard to predict as the volatility is high and the stocks fall faster than gravity speed resulted from retailer distribution. Fears surround the environment. Volume shrinks suddenly and no institutional support is spotted to continue the up-trend. To predict the price reversal will be equal to predict the timing of the institutional support on the KLCI. Brave traders can buy at the current price from the sudden drop and could reap huge rewards should the price reverse suddenly happen the next few days. However, risk exists. For me, I am timid, and only dare to stand aside to watch the drama.