Where To Next?

Above is a chart showing the KLSE movements for the past year.

The stock exchange has been on a down trend since 4 months ago. Volume is seen as steadily decreasing.
However, the index seems to have stabilized at the 1270 point mark, and is currently experiencing consolidation.
The big question is, is it preparing for a bull run? A sloth run? Or a catastrophic sky dive?

Here are a 2 short term scenarios.

1.Oil prices
If oil prices continue to surge, Economic heavy weights such as US and japan may actually fall into recession or experience 0 growth. Consequently, this creates a domino effect whereby all smaller economies dependent on exports for growth slow down.
Prediction- The KLSE will stay near the 1220 point region. Plantation stocks such as palm oil will see even further gains.

2.Political Developments
If BN is overthrown, expect rioting or a re-election.
Prediction- Political stability will cause the index to fall around 50-150 points. Stocks controlled by UMNO, GLC's- Government linked companies (UEM builders, Telekom etc etc..) can expect HUGE declines.

Assuming that both scenarios do not happen, a bull run is still not expected at this point of time. However, a sloth run is possible.
Therefore, Investing in stocks now is not a very good idea. This is because we stand to loose much and gain little.



Sloths move at a jaw dropping speed of 0.08km per hour even if threatened by a predator!