Technical | Fundamental Analysis Discussion Stocks Listed In Bursa

Tuesday, September 30, 2008


Tuesday, September 30, 2008 0 Comments


Well, for starters, chat chat chat luk fatt is spelt (or fried) Cantonese style meaning SEVEN SEVEN SEVEN SIX EIGHT or 777.68 ..... that's the digit losses when DJIA tumbled 777.68 pts overnite in Wall St when US Govt USD 700 Bil financial rescue package failed.

This is the biggest 1 day sell off and closest thing to panic selling if ZL can remember correctly. Global mkts will be knackered today but where some Toilet Kings run screaming like headless chiche little "IT'S THE END OF THE WORLD" ZL smells $$$

Strange but true. Where many traders lose $$$, some traders who knows opportunity when they see one, will prosper. This is due to calm nerves and an even cooler head.

ZL's last article on bear flags & pennants was timely published and at the last few sentences of the weekly charts, another big flag or pennant will favour traders whose adopted strategy is SEE $$$ TAKE $$$ .

Well folks here is your prayers answered. Let see how much you can take OFF the table. BURSA is gonna be less volatile due ro Hari Raya 2 day holidays. But the drop will not be anything less than expectured.


Zhuge Liang

Monday, September 29, 2008

Flag & Pennant Bear Hugs KLCI
Descriptions and examples of Bear Flags & Pennants in this article shall be kept to the minimal and in the simplest of form in everyone's interest.

Disclaimer : This article is nothing more than a case study. It is not a solicitation to buy or sell. The author is not responsible for any buy / sell commitments of readers. Please consult your remisier for additional infos and opinions. Trade at your own risk.

Emphasis on this case study should center on the date of events, TA patterns & formations and the corelations of Price and Volume. Chart duration is 3 mths (Jul - Sep 08) from 9 mths of grizzly bear hugs.

04 - 14 July 2008 ..... Flag #1 started with a volume hike on 04/7/08 with prices rising AGAINST a falling KLCI trend. The volume diverge as the prices began as the flag flutters and (vol) spiked again when prices breakout and down of Bear Flag #1 .... the KLCI immediately continue it downtrend.

23 Jul - 04 Aug 08 ..... Flag #2 is a carbon copy of the first flag. Volume at entry, mast, exit and increased of volume at breakout can be classified as a COPYCAT from start to finish. Familiar? HAHAHAHAHA!!!!. Again the KLCI resumed it's initial trend >>>> DOWN.

29 Aug - 04 Sep 08 ..... Pennant #3 is shaped like a small symmetrical triangle but nevertheless it's properties and characteristics are similar to the flag where the prices and volumes are the major players. Flags are more potent traps than pennants which tends to move sideway or consolidates - projecting a false signal or flashing false hopes the bearish trend is about to reverse. This is substantiated by lower volumes that tricked traders into a false sense of beliefs the sellers are weakening. Higher volumes suggested more participations and commitments. And when the bears raised the red pennant, the downtrend continued trapping many traders with the oldest trick in the TA bible.

14 - 26 Sep 08 ...... Pennant #4 commences the day after the Lehman Bros financial fiasco. The Hammer rebounded with an above average daily volume. Let the pennant begins ....... UNFINISHED >>> INCOMPLETED becoz no volume spiked occured on last trade Friday 26/09/08.

Correct Correct Correct .... it looks like a pennant, behaves like a pennant but it is not a completed pennant until we all get drunk (VOL) .... sounds familiar??? Kakakakakaka!!!!

Sorry guys, that was @ VK Lingam cracker and we better adhere to the critical situation at hand or else there will be no one left to mabuk when the Grizzlies wrestle the KLCI and suffocate us with a mother of all bear hugs next week.

Scared? Tensed? Nervous? Go ahead guys .... Permission granted !!! LOL!!!

KLCI Weekly Chart
Critical and face all blue, so? Just close our eyes and die just like that lah??? YOU maybe but not ZL definitely. If we fated go down, we won't go down without a fight. How about 1 big kick up the bear's ass b4 we kick the bucket? Last chance saloon ....KLCI weekly chart ;)

Look at the weekly and screw the date of both flags. What catches your eye? The 1st flag broke out when KLCI peaked but the 2nd flag is much smaller than it's predecessor. The number of weekly candles in 2nd weekly bear flag is less than HALF of the weekly candles 1st flag.

And where is WEEKLY Bear Flag or Pennant #3 ???? Aaaaaaahhhhhh belum nampak lagiiiiii ....HAHAHA.

Even b4 the weekly bear flag or pennant has yet to begin formation, ZL is quietly optimistic and am praying for it to happen. No ZL is not crazy as this is a weekly chart and a flag happening will offer a belated "against the main trend" uptrend reprieve that can meant a few bullish weeks b4 dying again ..... if so fated. And to an opportunist like ZL, that means $$$$$$$$$ !!! And ZL already emphasized the last candle changing of the arrow colors from red >>> green. NEVER SAY DIE .

You want an against the trend BEAR FLAG or PENNANT? Then let's PRAYYYYYYYYY.


Descriptions of FLAG & PENNANT
Flags and pennants are among the most reliable of continuation patterns and only rarely produce a trend reversal. The only difference between the two patterns is that a flag resembles a parallelogram (or rectangle) marked by two parallel trend lines that tend to incline or decline against the prevailing trend. The pennant, however, is identified by two converging trend lines and more horizontal which resembles a small symmetrical triangle. The important thing to remember is that they are both characterized by diminishing trade volume and though different, the measuring implications are the same for both patterns as demonstrated in Zhuge Liang's daily and weekly KLCI charts illustrations.


Zhuge Liang

Friday, September 26, 2008

EDEN (7471)

Friday, September 26, 2008 1 Comments

EDEN (7471)By Zhuge Liang

Andrew's Pitchfork
This pitchfork may be somewhat similar to RESORT's but that's where the similarity ends. Whilst the "garfu" in RESORTS is about breaking supports, EDEN's garfu is abt breaking resistances. Since RESORTS really went nowhere, technically speaking, then EDEN should be going places.

The pitchfork chart is a rare commodity like antique; not many around but ZL will highlight some pointers newbies may tend to overlook or fail to contemplate.

Questions? Bolehhhh .... teh tarik gelas besar dulu ..... hahahaha!!!

Prices declined from May08 resisted by Pitchfork handle Meridian Line A all the way until it hit rock bottom in July08. Rebounded off support at prong B and meet immediate resistance at fork inter-section where it pulled back yet to resume another spike up breaking Meridian A in the process b4 running smack into resistance at prong C.

Another pullback from C but what many did not notice is that the strong Meridian A line handle which was the major resistance had turned SUPPORT. This brings the CHANGE IN POLARITY PRINCIPLE into the equation. Meridian Line A had morphed from strong resistance to strong support. Look at EDEN's prices along this Meridian A and you will understand what ZL meant.

TA freaks basically buys at support or at break of resistance. EDEN now hv 2 strong support Meridian A and along prong B. EDEN is recommended for a short term or trading buy. Worse case scenario - break Meridian A surrender w/o regrets. If break prong B support, don't take your remisiers call. Mestilah minta $$$ contra losses mah :P

Fast Stoch ... %K 58.33 %D 64.66 may hv somewhat formed a sell signal but nevertheless still remains in the upper tier. EDEN can be relooked as bearish again only when fast K and slow D drops below 30 oversold level. So far holding well and above neutral 50.

Money Flow Index measures, as the name itself spells, money pumped in or out of this issue. MFI is highlighted in one of 2 charts attached.

RSI or Relative Strength Index stays bullish with some negligible downside most probably due to profit takings ahead of weekend. RSI 14 remains 43.67. When it drops below 30 - start worrying. Otherwise can stay optrimistic on EDEN.

Fundamental wise the word bad is an understatement >>> Terrible sounds better. No need to wonder why EDEN is trading at 38 sen wayyyyy belows it's 1.00 PAR value. As they say, Good things don't come cheap but in EDEN's case cheap things DO come good - sometimes.

And there is no better time than when it is near it's 52 weeks low 33 sens. Barring it's teruk FA, this is a TA techies upjohn. When it's time cycle arrive, together comes EDEN's volume, volatility, speculations and all the momentum needed to increase or even stop your heartbeat.

Trendline Chart
Self explainatory. Just zoom in charts attached and read some fine prints. In not too many languages ..... A PICTURE SPEAKS A THOUSAND WORDS. Now, pick up the phone ...... :P


Thursday, September 25, 2008

Composite Index Daily Technical Analysis 24/09/2008 BY Zhuge Liang

As indicated by A, the KLCI traded in a narrow range on Wednesday and formed a small candlestick, suggesting the KLCI is still consolidating. Currently, the KLCI is still resisted by the 23.6% Fibonacci Retracement line at 1034 points, and the support is at 963 Fibonacci Retracement.

As shown on the chart, despite the KLCI only rose 2.22 points, it is still above the Bollinger Middle Band. If the KLCI should stay above the Bollinger Middle Band, the immediate outlook is still on the positive side, and when the Bollinger Bands Width re-expands, the movement for the KLCI is likely to be on the higher side.

Currently, the Bollinger Bands Width is still contracting, suggesting the KLCI is still consolidating, or it is preparing for a new movement, and the new movement shall be revealed as the Bollinger Bands Width re-expands.

As indicated by B, total market volume increased 33.9%, and as a result, total market volume returns to above the 40-day VMA level; this suggests that the overall market is relatively active, thus a crucial criteria if the KLCI should attempt to rally again.

As circled at C, the MACD histogram is still above the zero level, suggesting an improvement of the KLCI movement. Nevertheless, the improvement is likely to continue until the MACD histogram should form a rounding top

Wednesday, September 24, 2008

Analyzing The Presidential Election Cycle By Zhuge Liang

Think who you vote for for president will affect the economy? According to the Presidential Election cycle theory, it may not make a
difference. History suggests that the stock market and the four-year presidential election cycle follow strong, predictable patterns. So, whether you're voting Democrat, Republican or just staying home, find out what these patterns can tell you about the stock market - and perhaps even the next presidential race.

What Is the Presidential Election Cycle Theory?
The presidential election cycle theory, which was developed by Yale Hirsch, is based on historical observations that the stock market follows, on average, a four-year pattern that corresponds to the four-year election cycle. The theory suggests that on average, the stock market has performed in the following manner in each of the four year that a president is in office:

Year 1: The Post-Election Year
The first year of a presidency is characterized by relatively weak performance in the stock market. Of the four years in a presidential cycle, the first-year performance of the stock market, on average, is the worst.

Year 2: The Midterm Election Year
The second year, although better than the first, is also is noted for below-average performance. Bear market bottoms occur in the second year more often than in any other year. The "Stock Traders Almanac" (2005), by Jeffrey A. and Yale Hirsch, Hirsch notes that "wars, recessions and bear markets tend to start or occur in the first half of the term."

Year 3: The Pre-Presidential Election Year
The third year or the year preceding the election year is the strongest on average of the four years.

Year 4: The Election Year
In the fourth year of the presidential term and the election year, the stock market's performance tends to be above average.

Can Stock Markets Pick Presidents?
Most studies on the presidential election cycle look at the relationship the presidential cycle has on stock prices. However, rather than the election cycle predicting a trend in stock prices, maybe the trend in the stock market can predict who will be elected president.

In a study done by John Nofsinger, "The Stock Market and Political Cycles", which was published in The Journal of Socio-Economics in 2007, Nofsinger proposed that the stock market can predict which candidate will be elected. He analyzed the relationship between the social mood of the country and the presidential election and concluded that when the country is optimistic about the future, the stock market tends to be high and voters are more likely to vote for those in power. When the social mood is pessimistic, the market is low and people tend to vote out the incumbent and put a new party in power. According to Nofsinger's research, the stock market returns in the three years prior to the election is useful in predicting whether the incumbent party candidate will be elected or whether there will be a new party in power at the White House.

Market Bottoms and the Presidential Cycle
Stock market cycles are well documented, with alternating bear and bull markets. When those cycles are superimposed over the election cycle, it is found that market bottoms tend to occur in the first term of a presidency.

In his study "Presidential Election and Stock Market Cycles," Marshall Nickels of Pepperdine University analyzed stock market bottoms in relation to the presidential cycle. In the period from 1942 to 2006, there were 16 presidential terms and 16 market lows corresponding to those terms.

Three of the lows occurred in the first year of the presidential term, 12 in year two, one in year three and none in year four. Of the 16 bottoms, 15 occurred in the first half of the term and only one in the second half of the term.

Monetary Policy and the Presidential Election Cycle
The Federal Reserve sets the monetary policy for the country. Although the Federal Reserve is supposed to be independent of the president and the Congress, monetary policy appears to follow the presidential election cycle as well.

In a paper entitled "The Presidential Term: Is the Third Year a Charm", prepared by the CFA Institute and published in the Journal of Portfolio Management in 2007, the authors found that monetary policy is more accommodative in the second half of a presidential term and more restrictive in the first term. These findings suggest that policy makers are reluctant to take a restrictive stance for fear it might slow down the economy in the months leading up to a presidential election. Of the four years, the third year is the year with the most expansionary monetary policy. During that year, the author found that monetary policy was expansionary 65% of the time versus 48% for the other three years.

Stock markets do well in periods of expansionary monetary policy and do relatively poorly when monetary policy is restrictive; therefore, it is no coincident that the stock market is generally strong in the third year of a presidential cycle, when the Federal Reserve is in an expansionary mood.

Although the relationship between the presidential election cycle and the stock market appears to be strong, this does not mean it is going to play out the same way every cycle. However, when combined with other information, it can provide additional insights that investors can use to improve their investment decisions


Tuesday, September 23, 2008

As indicated by A, the KLCI opened higher as influenced by the positive news of US market; however, the KLCI hit the regularly mentioned 1037 Fibonacci Retracement and started to retreat, therefore, the 1037 Fibo 23.6% is still the resistance for the KLCI. This is because of some profit taking activity at the 23.6% Fibo Retracement line, and traders can monitor acutely the immediate resistance with the Fibo Retracement.

Meanwhile, support for the KLCI is at 1000 psychological level followed by the 963.29 Fibonacci Retracement.

As shown on the chart, the KLCI is still testing the Bollinger Middle Band, and the breakout of the Bollinger Middle Band is yet to be confirmed.Since the Bollinger Bands Width is still contracting, this suggests that the KLCI is consolidating from its downtrend.

Nevertheless, the KLCI has to stay above the Bollinger Middle Band, or the immediate outlook for the KLCI is still bearish biased.

As indicated by B, total market volume declined 20.3%, but remains above the 40-day VMA level. This shows that the overall market is well participated, and generally a positive sign for the market. If the KLCI should break above the Bollinger Middle Band with market volume remain above 40-day VMA level, the improvement of the KLCI shall continue.

As indicated by C, the MACD histogram is still rising, and therefore, it is showing a rounding bottom signal, suggesting that the market movement for the short term is gaining strength. The improvement is likely to continue until the MACD histogram should form a rounding top.

BY Zhuge Liang

Monday, September 22, 2008


Monday, September 22, 2008 0 Comments
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