Genting Weakness Ahead

The chart for Genting is indicating weakness in the short term. This is in line with bearish conditions for the past few weeks.

The MACD indicator has just cut below its signal line, indicating that the bears are gaining the upper hand.

The price has pulled back towards its 50 day moving average and this will be a critical level to watch. If the price is not able to hold onto the 50 day moving average, bears may increase their selling pressure and it will violate the up sloping trend line that began in the month of Mar.

Any rebound will meet with selling pressure at RM7.06

KLCI Update

KLCI has been holding well even though Europe has caused stock markets world wide to embark on a correction mode.

The index is facing resistance at 1350 level. It has tested this level 3 times for the past 1.5 months and has not been able to break through.

The –DI is now above +DI indicating weakness in the price action. However with ADX below 20 levels, there is no sign of a strong downtrend developing.

MACD indicator is just slightly below its signal line which is a bearish signal.

Gathering the evidences painted by the charts, index looks set to weaken next week. However possibility of a strong downtrend developing is still not present. The next support level is around 1310

KLCI Sell In May And Go Away

The stock market has a famous saying of “Sell in May and go away”. Should you be doing it this year?

A look at the KLCI index from 1994 to 2010 shows that there is a 50-50 chance that the market will go down from May to Oct. The performance of the KLCI index is shown in the table below

Entry Date	Entry Price	Exit Date	Exit Price	% Change
4-May-94	1040.44	4-Oct-94	1126.34	8.26
3-May-95	944.55	3-Oct-95	983.75	4.15
3-May-96	1184.97	2-Oct-96	1135.53	-4.17
5-May-97	1099.39	2-Oct-97	794.10	-27.77
5-May-98	627.56	2-Oct-98	366.88	-41.54
4-May-99	681.75	4-Oct-99	680.33	-0.21
3-May-00	900.14	3-Oct-00	704.24	-21.76
3-May-01	615.98	2-Oct-01	613.00	-0.48
3-May-02	795.12	2-Oct-02	648.53	-18.44
5-May-03	627.62	2-Oct-03	738.98	17.74
6-May-04	845.74	4-Oct-04	855.74	1.18
4-May-05	895.50	4-Oct-05	924.98	3.29
3-May-06	950.99	3-Oct-06	968.93	1.89
4-May-07	1346.37	2-Oct-07	1361.03	1.09
5-May-08	1274.13	6-Oct-08	1013.39	-20.46
4-May-09	999.44	2-Oct-09	1204.20	20.49
				-76.74

If you buy into the KLCI on May 2009 and sell on Oct 2009 instead, you would have seen gains of 20.49%. However if you sum up the performance from 1994 to 2010, you will be down 76.74%.

So should you be a buyer this May or seller? Personally, I will not be a buyer as my feel is the index will not see double digit percentage gains and the risk of a correction is high.