Like other equity markets, our market has continued its recovery after the CNY break. FBM-KLCI broke above its short-term downtrend line on Feb 17. Indicators (MACD & RSI) continue to improve. ADX reading is still weak at 24.9 but the +DMI looks set to cross above the -DMI.


Chart 1: FBM-KLCI's daily chart as at Feb 22, 2010 (Source: Quickcharts)

While most stocks have recouped some of its losses, some stocks are racing to new high. In this very small field, we can find names such as Daiboci & Tomypak. Daiboci proves that a stock can do wonderful things when it has the wind of momentum to its back. I remained skeptical of its success story. Go to Chart 2 for the daily chart for Daiboci.


Chart 2: Daiboci's daily chart as at Feb 22, 2010 (Source: Quickcharts)

Other stocks which look very promising, include the rubber glove manufacturers (such as Supermx, Kossan, Adventa & Latexx); Unisem; and, TChong. These stocks have broken above their respective short-term downtrend line. For the daily charts of Supermx, Unisem & TChong, see below.


Chart 3: Supermx's daily chart as at Feb 22, 2010 (Source: Quickcharts)


Chart 4: Unisem's daily chart as at Feb 22, 2010 (Source: Quickcharts)


Chart 5: TChong's daily chart as at Feb 22, 2010 (Source: Quickcharts)

Finally, some stocks are resting on strong support level, with no sign of the next price direction- Up or Down? Among them are Freight.


Chart 6: Freight's daily chart as at Feb 22, 2010 (Source: Quickcharts)

In this environment, what shall we do? If you think that the uptrend of the market will continue, then you should buy into the market as soon as possible. Your risk tolerance would determine whether you should buy stocks which show more bullish outlook (such as those which had already broken above their short-term downtrend line) or stocks which haven't moved up yet but are resting at strong support level. On the other hand, if you think that the market is enjoying a short rebound with uncertainty ahead, then you should remain at the sideline. Times like these are tough on both investors & traders because they have to decide on a course of action where the outcome is anybody's guess.