Tuesday, 22 January 2013

Is KLCI 5% fall a good chance to buy short term?

Dear Friends,

In the past, I wrote an article for Busy Weekly investment newspaper, talking about if KLCI drops 5% before election, it is a good chance to buy in.

http://www.danielloh.com/2012/12/klciby-daniel-loh-for-busy-weekly.html

Amazingly, KLCI did just that! It actually drop 5% in 2 trading days. It drops from 1700 to 1605 a drop of slightly more than 5%.


And I think short term wise, things might get better from this sudden panic. Fundamentally the reason for the drop is that there is a rumor on earlier election, which I think all Malaysians should have heard of.

Today the panic may have subside a bit, retracing strongly into the closing bell.

But having said that, the uncertainty to the election outcome still remains. And stock market HATES uncertainty.

Our opinion is that this rebound is a chance to make very short term money ONLY. If the election fails to produce a favorable result for the ruling party, get ready for a volatile time again.

Mid term to long term wise, try not to hold too many positions at hand.

Rgds
Daniel
www.danielloh.com

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