As at Monday’s close at 1419.34 the KLCI was higher by 22.36 points or 1.60%. Gainers at 416 were slightly ahead of 406 decliners and trading volume was low at 859 million shares.

1.The KLCI’s strong rebound to 1419.34 following the listing of Sime Darby has pushed the KLCI into a strong technical position to take out its all-time high of 1423.81 registered on Nov 1. If based on the close, the KLCI registered a new historic high close yesterday.

2.The wave structure of the KLCI is now in a strong Wave 5 pattern, when only in November the KLCI was still reeling under selling pressure.

3.Tenaga’s fall was one of the main reasons the KLCI plunged to 1338.14 on Nov 22, but Sime Darby’s listing added another 20+ points to the KLCI pushing it above the upper Bollinger band.

4.But with the listing of Sime Darby, fund managers have new available to them new funds to support Tenaga, hence the powerful rally on Tenaga and its warrant yesterday.

5.Tenaga is at the beginning stage of a recovery phase. but because it has rallied too strongly yesterday we expect it to take a rest today and the next few days. Long term investors can hold, but short term traders would like to take profit, especially on Tenaga-CE.

6.Today we expect TM to move. TM’s next target is 12.00-12.60. Again, TM-CE offers the cheaper alternative to TM. At 0.11, it is not difficult to look for a conservative target of 0.165 as this represents its old high (resistance). But if TM can hit 12.00, then TM-CE should be worth 0.19.



7.Resorts have just broken out of its symmetrical triangle pattern. This is a great stock for longer-term holding. Resorts-CC is the cheaper alternative and can rebound back to test the 62% Fibonacci resistance of 0.24. If Resorts can hit 4.60, then Resorts-CC may be worth 0.28.

8.Other stocks to watch for today are: YTL, DIGI, PARKSON, KNM, WCTLAND, BJLAND, LANDMARK, TM, UMW, BURSA-CE, YTL-WB.



9.Of these we like PARKSON which is doing a “saucer" pattern. We also like LANDMARKS, a great stock which Genting has a share in. It has staged saucer breakout, wave 4 may well be over and it is poised for a Wave 5 rally.

10.Be patient with BJLAND. Vincent Tan is active in the market and U.S. and London funds are believed to be buying this stock higher. So is BJCORP whose wave 4 correction may well be over. Monitor BJCORP, and get ready to buy this baby if it shoots.

11.KPS may be flat and stopped out, but watch out for this stocks to breakout. It is trading sideways in a three-month triangle pattern but watch for “breakout" on strong volume to buy. Some big local funds are believed to be buying this stock.

12.PARKSON is in a beautiful “saucer" pattern. Expect a strong breakout. Look at the high volumes on the right side of this chart.

13.YTL and YTL-WB are also on the roll. We have been tracking these two stocks for a while now. Further buy.

14.UMW has broken out of a symmetrical triangle. It is ready to rally. So is WCTLAND.

15.KNM is on top of the world with a new high. One of the reasons for buying a stock is because it hit a new high.

16.The Hang Seng index has tested its 50% resistance of 28880 yesterday. It may pullback a little before a retest of its 62% resistance of 29637. This market is overbought. We do not expect China warrants and Hong Kong stocks to feature strongly this week.

17.The ringgit gained 90 pips to 3.3600 from 3.3690.



CONCLUSION: It is clear that the stocks that gained yesterday were huge institutional stocks. Small caps, Mesdaq and lower liners stocks were mostly sideways, with some even drifting downwards. We are therefore going with the flow of selective big cap stocks and are calling a “buy". The listing of Sime Darby has shifted the equation in favour of the bulls now. ther eis a high probability of the KLCI making continuous new highs to test the 1500 level, but with corrections along the way. Stock index futures traders should heed what the market is telling us. The politics, although uncertain, does not seem to be influencing big funds, who keep shoring up the index. For conservative traders, a cross above 1424 OH is confirmed bullish for KLCI. As for the FKLI we would go long if FKLI can close @ 1427 OH.

Long-term Upside Targets: 1426 (nearly hit) /1480 (Targets amended on 22/11/07).

Immediate downside targets: 1345-1339 (hit!)/1328/1302.