Tag Archives: gaming

KLCI: The Inevitable Correction


klci (2) (1)

At last, after more than a week of bullishness, the market formed a bearish engulfing pattern yesterday (as indicated by the red arrow) and today our local index lost 16.31 points, with the number of losers outnumbered the gainers greatly. KLCI was dragged mainly by three of the heavyweights – Maybank [1155], Genting [3182] and IOICorp [1961]. Moving on, we need to watch a few support levels closely (1752 and 1743) as there is a high chance that the index will rebound at these levels. A break of the 1743 support will send our composite index down to the resistance-turned support of 1718, which is an ultra-strong support level. Let’s take a brief look at the two “culprits” that caused the fall of our index today and see whether there’s any profit opportunity. We start with our Gaming giant, Genting [3182].

Genting [3182], GENM [4715]: Trading the Swings

Genting and Genting Malaysia (GENM) are two KLCI constituents that are famous for their volatility. The recent fall in their share prices had created more opportunities for us to profit from the swings. Let’s start our analysis by looking at the price development of GENM’s share.

GENM
It is obvious from the day chart that the share price is heading south. The creation of lower highs over the past few weeks, coupled with the fact that it breached the uptrend line connecting the 4 obvious lows just few days ago, supports the argument that this share is in a downtrend and thus market participants should avoid trading this share. Such an interpretation is technically correct but fail to take into account the big picture. If we look at the price movement of this share over the past two years (see chart below), we will realize that the share price is trading within a wide range (RM3.20 – RM3.93. We do not use RM4.12 as the upper limit of the trading range because the price did not stay above RM3.93 for long. It is better to consider it as a false breakout) and the trading range is narrowing slowly over the years and has been concentrating at around RM3.30 to RM3.77 for close to a year. In the middle of this trading range we have the RM3.52 level which has been tested as supports or resistances (S/R) for close to 10 times. This strong S/R level can be seen as separating the trading range of this company’s share price into 2 smaller trading ranges (RM3.30 – RM3.52, and RM3.52 – RM3.77).

Predicting the Market using Feng Shui

A publication in the business column attracted my attention today – Year of the Water Snake Prediction. I have always knew that there are people who have been relying on FengShui, or particularly “Flying Stars” and “5 Elements”, in identifying investment opportunities around the world, but I never expect to see such kind of advice appear in the newspaper. In this post, we shall see whether the economic predictions based on Feng Shui are aligned with those predictions of research houses and my opinion on sectors to focus in 2013.