KLCI July Performance

June is coming to an end. This is the historical performance of the KLCI index from 1994 onwards.

Entry Date	Entry Price	Exit Date	Exit Price	% Change	Draw Down %	Max Gain %	Bars Held
7/1/1994	1008.43	8/1/1994	1029.58	2.1	-3.2446	2.0973	21
7/3/1995	1025.85	8/1/1995	1059.91	3.32	-1.0391	4.9647	21
7/1/1996	1135.81	8/1/1996	1067.39	-6.02	-7.6404	0.4543	22
7/1/1997	1077.30	8/1/1997	1012.78	-5.99	-8.2456	0.7537	22
7/1/1998	454.73	8/3/1998	403.41	-11.29	-15.1211	6.8634	22
7/1/1999	819.70	8/2/1999	768.92	-6.19	-8.6605	6.184	22
7/3/2000	830.13	8/1/2000	799.59	-3.68	-5.4425	4.2198	21
7/2/2001	591.66	8/1/2001	660.06	11.56	-1.1814	12.7523	22
7/1/2002	727.73	8/1/2002	721.33	-0.88	-2.0365	3.1056	23
7/1/2003	691.93	8/1/2003	721.06	4.21	-0.1431	6.6466	23
7/1/2004	820.47	8/2/2004	832.69	1.49	-0.0073	4.6181	22
7/1/2005	888.18	8/1/2005	938.30	5.64	0	6.0427	21
7/3/2006	914.61	8/1/2006	935.41	2.27	-1.6816	2.717	21
7/2/2007	1357.78	8/1/2007	1367.29	0.7	-1.0348	2.5335	22

There is a total of 8 profitable and 6 losing "July" months.

Dow Update

US market was hammered again on Friday. The Dow closed at 11346. From the 5 minute chart of the Dow, we can see that the index was attacked by the Bears from the opening bell.


The only positive sign is a bounce off the lower Bollinger band at around 1.45pm. The index managed to stage a higher low near the 61.8% Fibonacci Re-tracement Level. It is now resting at the lower Bollinger band. The resistance level based on the 5 minute chart is at 11401. If it manages to clear this level, the next resistance is at 11440.

US Financial Sector

Dow closed at 11,824.69, down more than 200 points. The index is now very close to 11,508, the low established on Jan 22 2008.

The headlines are saying that the fall on Friday is due to credit woes and high oil prices. If you look at XLF (Select Sector SPDR-Financial), a fund that holds big financial names in US, the MACD chart is hinting on a potential reversal.



The XLF established a low of 22.13 on 11 Jun 08 and it reached a low of 21.86 on 20 Jun 08. However the MACD histogram has held above the low made on 11 Jun 08. This divergence is suggesting that a reversal is near.

However traders need to have strict discipline and stick to pre-defined stop losses in order to survive in this tough environment.

Happy trading!

KLCI Update

KLCI closed at 1229.35 on Friday. For the week, the index is down 19.22 points about 1.5%.

The index has rebounded from the lower Bollinger Band. The index managed to form a pivot point on 12 Jun 08. MACD is also creeping up but it is still below its signal line. The –DI is still above the +DI and ADX is now above 20 level which means that a down trend is developing.

The only positive sign is RSI is increasing and has cut above the 30 level. There should be a rebound early next week since Dow Jones was up 165 points on Friday.

However, the index is still looking fragile. If it breaks below 1214.37, the next support is at 1157.47 which is the low set in March 08.

Dow Update

The Bears came out to party this week. Dow closed at 12209, down 429 points for the week.

The loss on Friday erased the 214 point gain made on Thursday. Jobs number came in worst then expected and high oil prices were the culprit for the Friday decline.


Looking at the weekly chart for the Dow, there should be support at 12155, 11952 and 11508. If the index breaks below 11508, we are looking at possibility of index falling to 10849.

KLCI Update

KLCI closed 1253.12 points on Wednesday. With the Government removing the subsidy on fuel, the market reacted negatively in Thursday morning trade down more than 37 points or 3.02%.

The index is now sitting at the pivot low of 1216.38 set on 7 Apr 08. If this support cannot hold, the next one will be at 1166.


The indicators do not look good either. The –DI is now above the +DI and ADX is increasing. MACD indicator is also showing bearish signs. The RSI indicator is indicating that the market is approaching oversold level. But if a downtrend develops and the ADX goes above 20, then the market may remain oversold for a longer period of time.

Air Asia Case Study

Oil price has gone up from about 100 USD in the beginning of the year to 124 USD. That is an increase of around 24% just for 2008. High price oil will affect the earnings of companies that rely on oil for operation, example airline and transport companies.

Let’s look at the chart for Air Asia.


The stock closed at RM 0.99 yesterday. The price is currently below the 50 day, 100 day and 200 day moving average. A bearish sign.

The RSI has been below 30 since the beginning of May 08. However oversold doesn’t mean it will not go down further as illustrated by the chart.

The short term stochastic signal is showing some positive sign. But it seems to be moving down again. The bulls just do not have enough strength to push the price higher.

If you are looking to buy this counter, it is best to wait for the MACD indicator to do a crossover.