Tag Archives: sentiment

KLCI: Getting Weaker

Yes. You read the title correctly. W-E-A-K.

While it’s not entirely bearish yet (the index edged only slightly lower today and the losers outnumbered the gainers just marginally, so for some people there’s still HOPE… Hey! It’s time to wake up!) several signals show that the bears are about to launch an aggressive attack on our market in days to come. If you are an active trader, you would have notice that majority of the shares that have rose for the past few days are starting to reverse. Some are even approaching lower support levels already. For shares that still manage to hold up, the momentum is obviously fizzling out. With the smart money booking in their profit since the first trading day of July, there is no way the market is going to move higher, especially when the regional peers are falling. A correction is needed before traders and investors are willing to take fresh position again. Let’s take a look at the chart.

klci (5)

Stock to Watch: Pantech [5125]

Looking at the chart of our local index, we can see that the index is now consolidating within a 28 points range (Resistance of 1793; Support of 1765). A spinning top was formed on Thursday with slightly greater volume than the previous days, signalling a possible reversal. In fact, with both the Hang Seng (Hong Kong index) and Nikkei (Japan index) forming long lower-tail spinning top with high volume, the possible reversal of these two leading market in Asia could potentially pull our index up on Monday, thereby creating a better sentiment for shares to reverse/ move higher.

klci (3) (1)
Having said that, there are still plenty of oppportunities for us to tap on and among them is the popular oil and gas small-cap, Pantech, which would be the focus of today’s discussion. While the expected better sentiment on Monday could turn the share price around, thereby taking away the opportunity to profit, it would be best if we could get ourselves ready in the event that the expected better sentiment does not materialize (Possible since at the time of this writing, US index is falling).

Stock to Watch: Airasia [5099]

AffinInvestment Bank has been giving a buy call on Airasia with a price target of RM3.70 (an upside of 37% from yesterday’s closing) ever since its share price was hammered from its July top due to (1) possible increase in competition from Malindo Airways, a joint venture between Malaysia’s National Aerospace and Defence Industry and Indonesia’s Lion Air which is expected to start operating in May this year, and (2) adjustment of funds as Airasia seize to become one of our index constituents. In fact, most, if not all, of the research houses have price targets that are higher than yesterday’s closing price. So given the bullishness on Airasia – which comes mainly from an increase in its number of passengers carried and its growth capacity which translates to higher revenue - and its current favorable price, should we buy now?