Wednesday, January 23, 2013

KLCI to rebound?

DOW standing at 13,700 levels ... up another 60points. Only KLCI in sharp correction mode, due to the rumoured election dates. If we are not preparing for such volatility, we should stay side-way ... do what we need to do ... while check for opportunities. Wait for election ... wait for the results, the dust to be cleared before re-entering markets. Some of investors that I knew have exited KLSE months back ... ignoring the noises, the up-down emotion driven rally. So, are we in mood for rebound?

We could not predict when exactly election could be ... but base on the fear-factor(and will be created again and again), it should be diving further below 1500. While KLCI trading at PER14, higher than regional markets plus many blue chips at high PER valuations, we certainly should not be buying anything now to hold. Not even Axiata that I grabbed when it dived 7%. Some followed by buying into Axiata 2 days ago ... and that is RISKY. We need to understand that it is no longer cheap. REad all we want ... regarding their ventures into Indo-china or Burma ... perhaps, speculating that they might have a piece of Thai/Viet pie ... we do know the stock is over-valued.

Trading is relating to technical charts ... yet, indicators are not even showing 70% accuracy. KLSE stocks lack of liquidity ... and we have to trade those blue-chips or hot-stocks. We need to check on few more factors ... such as news/media, to make some 'guesses' how the stocks will re-act.

If one is too busy to read, and lacking of technical-analysis knowledge, it is becoming difficult for us to identify the stocks that could be in play. Is O&G in play?

Example : Dayang and PEnergy ... with the Shell's news in front page of the Edge recently. Both are in strong uptrend and ... the peers in O&G are also in the move. Checking Perdana's chart ... emmm ... interesting strong rebound and uptrend now. What is the news related or in play for PetraPerdana? Stocks do not move by itself ... if a stock is of not good fundamentals, it is moved by news, played by some 'operators'. Check Perisai, Alam, Pantech ... and even TAS .. Coastal and such. They are said to be in O&G play ... but how about PChem? It was diving further yesterday(luckily one of them in my stock watch group asked me on Friday and sold for profits). Dialog has been abandoned ... sideway till recent dive, giving another opportunity to trade on technical rebound? How about SKPetrol which rebounded yesterday ... from the low of 2.78?

Getting into sector-in-play is very important ... but which sector should we be focusing in? Plantation counters seem to fizzle-out after short rebound. It is not easy ... we need to isolate ourselves from the noises of media ... trying to read as much, to 'feel' the directions and which news will be used to push .. what sectors. Then, we check on those charts .,.. some leading ... and looking into those laggards. I am talking about some good stocks, not too speculative such as KNM or Scomi. Ramunia(Tabung Haji yang berat) is not in my list either.

Time to go ... another 7 hours of classes for today.

Have a nice rebound ahead.


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