Market is Oversold!

There was a fantastic phenomenon today. The market started immediately in minus territory and stayed all day below the minus 45 points ending at minus 50 points. There was a steady selling pressure all day and the bears were kicking butts all round. The erasure of gains especially for GLCs like UEM World was downright shocking. Already RM102 billions have been wiped out from the Bursa!

There will definitely be margin calls and more selling is expected in the next few days if there is no market leader to turn the tide around. There is buying but no one wants the market up so early as they are busy accumulating blue chips like Maybank, Public Bank, Berjaya Sports Toto, Sime Darby and CIMB.

I do not believe it is the beginning of a bear market. The market may perhaps go sideways in consolidation for sometime to lick and heal its wounds.

It’s ‘cotton picking’ time and those with deep pockets should be buying. An opportunity like this is hard to come by. It’s time for action but be cautious of the kind of stocks that you are picking. Second and third liners and penny stocks may not be the flavour of the month but blue chips. There may be some upward play of GLC’s but I would not touch them right now.

As I say, it’s ‘cotton picking’ time but do not speculate!

Quote of the Day:

“Smile - it increases your face value.” Unknown

Heartsong