Market heading for a strong rally

With the positive news that the developed nations are acting together to avoid the major financial melt down, the global stock market is heading for a strong rally. The STI is showing strength in the surge yesterday.



This is probably the strongest one-day rally we had ever seen. Today, it maybe more buying as US and European markets all showed strength last night. Expected to rally for a period of 4-6 weeks before seeing next wave down. There will be a mad rush to buy this week. That may push the index up by another 200 points before investors start thinking again.

Singapore Stock Market Trend: Not bottom yet

In line with the Dow Jones and S&P500, the STI is showing no signs of bottoming. Looking at the various levels of support and resistance, we can only conclude that there is more down side. So far, the volume does not show any sign of panic selling, unlike 1998 or 2001 or even March 2008. The current down trend seems to be slow and steady. In that sense, we will have to wait for the slow turn around as well. We should not expect quick bottoming even if the US$700 bail out plan (or buy out plan as some would like to call it) is approved.

Here is the STI chart.


There seems to be some divergence from the indicators which may signal some short term rebounce. Nothing is indicative of any sustainable rally coming (talking about sustainable for a for over 3 months). The market can stay oversold for quite a while.

Jaya Holding - Not best time yet

This is a counter that has enjoyed super bull run for 5 years with price change from the region of $0.25 all the way to over $2.00. The gain of about 800% in 5 years. Those who had invested in between 2002 and 2003 and hold on until 2007 would have been rich.

Anyway, no point on the hind sight. What is important is that the trend is still down and not matured for accumulation yet. Too risky to go in now.

Keppel Corp - Not Ready to accumulate

Keppel Corp is continuing the down trend. One of the main reason is the overall industry outlook. The demand for oil rig construction is expected to shrink and some of its competitors are facing order cancellation. This certainly puts pressure on KepCorp price. Currently, it is trading in a down trend channel.


With the current uncertainty, the prices is expected trend down further. Even if there is a rescue package (which should be one), the price may bounce back and trend down again. Good position to accumulate would be somewhere around $6.00 to $7.00.