There’s no doubt that it was a strong market rally for quite sometimes. For the past 3 days, we can observe that the stock market drop due to having healthy correction to its uptrend. Will the correction continue tomorrow? The probability is not that high as it’s already drop to the level where it’s great time for trader to initiate ‘LONG’ position.
Last Friday 21st Jan 2011 market closing at 1543 after dropping 24.5pts. Previously, many analysts and financial experts hope that the correction can drag the index towards the 1550 – 1540 levels as it will help to garner enough strength to break through the 1600 level. So, I think it’s time for the index hit next target which is breaking through the 1600 level.
The FKLI is consolidating around the 1570 level this week and it will separate the bulls and bears, with 1565 and 1575 as next major breakout point next week. So, it’s not encouraged for those who plan to have ‘SHORT’ position for long-term. In the other words, it’s also not advisable for those who plan to initiate ‘LONG’ position at this moment unless you want to take a risky step.
However, if you still unconscious then you can try to take risk by initiating ‘LONG’ position as I am in the positive view that the current market will not be easy to initiate short position. No matter what, once you initiate your ‘LONG’ position then you should remain holding the position and riding on the trend.
I guess a lots of people are wondering how does global stock markets moving as year 2010 is ending. Some said that the stock market will slowdown while some said that the market big move is coming soon? After many days of observation, I only can tell that another opportunity to ‘Short’ is coming soon.
Just look at the daily chart for FKLI December contract, we could see that the KLCI and its index futures are moving upwards since beginning of the year 2010. And, now it had touched the high record levels.
I did a lots of calculation within this month and I noticed that setting a 10 points profit for each trade seems to be a good idea. I initially did not believe it and let the profit run away. Most of the time, we’re dealing with probability. If the market has a higher chance to hit 10 pts than 20 pts, then why must try to achieve 20 pts and at the end, you got even lesser or lost your money because the market turns around.
Tips to Trade at the Beginning of Year 2011