Brief analysis – Jan 12th 2009

My initial calculations show an STI pivot around Tuesday onwards. That’s tomorrow. Let’s see how it pans out. While I anticipated a retracement, I must admit the downward move is quite unexpected.

I have also put an upside target of 1915 last week. If my wave count is right, the next wave could be one that will form a lower high.  This is bearish.  The STI closed at 38.2% retracement level. Confirmation of this support will come tomorrow. Will it hold or will it break. If a lower high is formed, will the upside target be 1845? Geez that is low. And if it comes into fruition and heads down then we have that bearish chart formation forming that could take it down towards 1470 on complete formation.

There are some analysts who are looking at a rebound up above 2000 towards 2200.  I do not see that currently, due to the bearish divergence as drawn with the blue arrows. If it does break 1915 it has a new level at 1960 as resistance now. Plenty of resistances. We will have to watch and see. One thing for sure, nothing good will come out of it if 1715 cracks.

We’ll study this as we get along.

Some trades done. I closed my remaining Yanlord, and I had to cut loss on TopGlov on the KLCI as it proceeded to venture further up. It hit my cut loss point and I executed it. Such is the behavior of stocks on KLCI especially on counters with low volume. When you have low volume, it can swing against you quite easily. That was the risk I had to take when I entered it and it did not pay this time round

Some counters are holding supports, while others have been cracking theirs one by one. Plenty of bad news on Cosco and oil rigs.

I will maintain my call for the rebound still as it has not been violated. I will be extremely cautious if the current support fails to hold however. There is a decent chance that the target for the upside will be lowered but let’s see what happens. Regardless, it is time to shop for put warrants and add them to watchlist. At least when the time to go short is triggered, I am ready.