Hi, i m back again.
Market seems to be a bit bullish today, DJI closed with +250 points (+2.3%), marvelous! Is this the sign of completion of market correction due to resurgence news of sovereign debt issue in the PIGS countries in Europe and potential war in Korea. To answer the question, let ask the Mr Market
The DJI weekly chart shown a double top formation at 11250 level which is a hindrance to bullish advancement of DJI. Taking closer look at DJI daily chart shows that DJI is retesting the 11250 level yesterday. Do you think this resistance level will be taken out? My guess is not yet.
11250 level is critical now. Any retracement from this level market will turn in short term bearish again. ie lower high from the previous high achieved on 5 Nov 11440. Hence it is too early to enter the market now. We shall wait for the Mr Market to rebuild his confidence and strengths to cross the 11250 hurdle first. Then we have a more interesting play to look up for.
Following from the analysis above, let take look at local market.
10.35am KLCI + 13.76 points (+0.93%) not to bad, impressive rebound. The play should be cautious based the analysis above. No doubt that a lot of second tier blue chips have corrected to an attractive level. But the play short be quick and window of opportunity may disappear fast should DJI make a U turn tonight. Whether this will happen, you should ask yourself whether there is any favourable events up coming, otherwise, the DJI rebound was merely smoke in the mirror.
Cheers Happy Trading.
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