Has KPS Cross the River Jordan?

After yesterday near debacle at the hands of the bears, Bursa needs a shot in the arm today. Are the bulls ready to lock horns and ram down the nasty bears? Or are they full of ‘bull’ themselves?

Outsiders have taken the lead for the past two days. The bulls should make their presence felt. Fund managers should look at the big picture. They must know the market will have hiccups off and on. Avoid looking for 'needle in the haystack' speculative explanation why the market is up one day and down the next. Look at fundamentals. Play the market according to your own rules. Play medium term.

So today, the index gained 10.98 points to 1, 246.87. With regards to KPS, the rumour in the market is that the Selangor State Government is actively negotiating water rates with the Pahang government. Also, the MB of Selangor did mention in a news item that the Federal government is talking to the Japan Bank of International Cooperation on the billion dollar water development loan. If all goes well, KPS should grow strong and fat in price before the middle of the year. The other rumour is the KPS consortium has clinced a stake in the privatisation of the West Coast Highway. Both these rumours need confirmation .

The New Straits Time’s resident chartist gave his comment today that KPS needs to consolidate before moving upwards. He gave the trading band up-limit at 1.27 before it could go higher. I believe he may be right here. The indigestion by weak holders and speculators was already showing when trading resumed in the afternoon.

Well, it looks like the NST chartist is right. By closing bell, KPS shares slumped to RM 1.22. I believe a new foundation is being built at the RM 1.20 level and bargain hunters have brought down the price from weak holders by the closing bell. I hope my reading is correct. The rate KPS's price fall from a high of RM1.42 to RM1.22 must certainly have create great agony and fear in the many who bought into KPS today. This will dampen KPS‘s price for a while before it can break new ground. I think it is accumulation phase for KPS in the next 5 trading days.

For whatever reason the stock has been going up, be it the highway or the waterworks project, my thinking is this: to mobilize itself for either project, I believe KPS has to raise capital through a rights issue. It may also be giving some convertible warrants as sweeteners. To my mind, KPS is not a churned up counter without any basis. It should go beyond two ringgits if it wants to go for a rights issue at RM1.00 per share soon.

A new week awaits on Monday. Will we see many April fools even on the second day of April?

Quote of the Day:

“The more you complain, the longer God let you live.” Unknown

Heartsong