Fool's Gold

Was the Friday price lift-off on the Bursa, fool's gold? A flash in the pan? Or is it an opening to a new chapter for the next scaling up for the CI?

Even that guy in the movie "Next" could only see a couple of seconds ahead of time; so he could avoid trouble and use that advantage when he so needs it. Unfortunately, we do not have that gift. At our disposal are some crude charting methodologies based on constants and variables. At best, our reading will be a good guesstimate. Anyway, be content with that for the moment until more sophisticated tools are made available.

So we have analysts' reports. They have done some homework and given their take. So as laymen, we read them with a grain of salt to make some sense of what is written. Hopefully we can make some so-called "wise' decisions before taking a position on a stock.

Looking at THE STAR today (14 July 2007) in the Business Section, Lee Hung Yee put forward her broad crystal ball reading. The regional markets were in chorus yesterday from Hong Kong to Jakarta taking the cue from a good Wall Street performance. But watch out for Wall Street though as it can be volatile on likely weaker second quarter earnings.

Leong quoted Cheah King Yoong of SJ Securities' observation that the market has yet to be broad-based since buying is still confined to large caps and component stocks. UEM's loan from China, Tenaga's windfall result, DRB's foray into oil and gas, Resorts World's timely disposal of some Star Cruises share holdings to CMYCL and the potential EONCap take-over had helped in yesterday's supreme rally. Cheah, as such, expect the CI to trend upwards on possible spill-over next week. He opines that that support level will be at 1370 and the upward resistance at 1400.

Meanwhile Kenny Yee of OSK believes that interest is shifting back to the blue chips after the second liners and penny stocks had their fun run over the past few months.

He quips: As losers outnumber gainers, it is only natural for profit taking to take place on the lower liners that had made good gains. However, he cautioned that any uptrend at this juncture could be limited as there is a dearth of good news. Tongue-in-cheek, he then tossed in that outsider possibility of buyers looking ahead to buy based on 2008 valuations since we have just crossed the threshold of 2H 2007.

I am not too sure of investors looking at 2008 valuations. It could be pre-matured. But this I am quite certain--There is no dearth of political and corporate news in Malaysia. We like to create news. We are super-duper event managers.

Our next stop is not the Twilight Zone but Bursa's ascent beyond 1400. The unfolding events in the Malaysian diary will include:

• IDR's pioneer companies to be released by PM
• The North Corridor Economic Region Masterplan Unveiling
• The Pahang-Selangor Water Transfer Project
• The Listing of Synergy Drive
  
• The Global Halal Hub Development
• The September Budget
• The Continuous Roll-out of 9MP project tenders and fast track implementation
• The impending General elections

Let next week unfold in its own good time.

Have a good week-end.

Heartsong