Asian Stock Markets Rebound

The Dow Jones Industrial Averarage (DJI) made a strong rebound on Friday after testing 11,037.85 points, the DJI climbed back about nearly 200 points to close at 11220.96 points. The government takeover (more like a bailout) of the twin mortgage giants Fannie Mae and Freddie Mac created relief to investors. My previous forecast still holds for the DJI with current support level at 10,800 points and resistance level at 11,700 points.

The rebound in the US market has triggered the Asian markets to rebound strongly as well this morning.

The Singapore STI index opened with a wide gap of 92.58 points (3.6%) and as at 10.24 am, the STI is maintained at 2669.42 points. The STI failedto be support at 2,700 points and nearly tested the next support level which is based on Fibonacci clusters level of 2,540 points last Friday, where the STI went to a low of 2,554.04 points. While my previous analysis remains the same, the resistance level has been revised to 2,800 points because of the declining trend.

Like Singapore, the Hong Kong market has also rebounded aggressively with a gap of 907 points on the Hang Seng Index (HSI). The HSI opened today at 20,840.69 points, 4.5% higher from last Friday's close of 19,933.28 points. As at 10.34am, the HSI closed lower at 20,728.85 points. My previous forecast still hold for the HSI, with support level at 19,000 points and resistance level at 21,000 points, with major resistance at 23,600 points.

The Malaysian market however, did not over-reacted on the spike on the rest of the markets in the region. The Composite index opened at 1,075.22, just 4.68 points (0.4%) higher than the close last Friday. It is now a little higher at 1,077.21 points as at 10.43 am.

Investors are being extra cautious currently because of the current political situation, which speculation on whether ousted former Deputy Prime Minister Anwar Ibrahim is going to take his alliance to topple the current government and form a new one. Mainstream media shows that it will not come true, while it is otherwise in the blogosphere. Like the investors who are grabbing their popcorn and a drink, let's wait, watch and see...

My previous forecast is still valid for the KLCI, with immediate support level at 1,060 points and stronger support level at 1,030 points, while resistance at 1,160 points.

Here are the performances of other markets as at 10.52 am:

Japan: Nikkei UP 438 points (3.6%)
South Korea: KOSPI is UP at 62 points (4.4%)
Taiwan: TWI UP 333 points (5.2%)
Shanghai: SSE DOWN 14 points (0.8%)
Thailand: SETI UP 8.5 points (1.3%)
Australia: All Ordinaries UP 175.80 points (3.5%)

Overall, the markets are currently just going through a technical rebound because of the steep fall in most markets especially on Friday. Trend for the markets are still down.

Commentary and Analysis by Benny Lee

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