Monday, April 23, 2007

Market Strategy At 1,330

At or near all time high, all equity markets will behave the same way: volatile, profit taking activity and sharp buybacks. Judging from Asian bourses' excellent closing session last Friday and European/American bourses steady gains later that evening: many would be predicting a good week ahead. However, I was a bit hesitant and afraid that players would go overboard in the morning session today. Markets have opened for more than an hour now with the KLSE registering just RM606m value traded. I think many remembered the RM3bn day which was quickly followed by disaster. The way the markets traded this morning is one of cautious optimism, which is very good. A terribly strong surge may find weak legs later. I would expect all markets to try to establish a platform and not surge away over the next few days. It is important to form a base. Judging from the KLSE movements, its not a time for big caps to move, which would be wiser to stay away from stocks requiring huge liquidity such as UEMW, MRCB and Resorts/Genting. Its a rotational wham-bam-thank-you-maam kind of market currently. If your chips are not off the table, you have not locked in your gains.

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