NVTC Newsletter070518

NextVIEW Traders Club Weekly Newsletter
Published by NextView Sdn. Bhd. (574271-D) Ph +6 03 27139388 Fax +6 03 27139366

Add B-9-12, Block B, Level 9, Megan Avenue II, 12 Jalan Yap Kwan Seng, 50450 Kuala Lumpur, Malaysia
Newsletter for the week ending 18 May 2007
THIS WEEK’S CONTENTS:

Page
1. Investment/Trading Related Articles:

The One Point Rule …… 2
by Vincent Troncone
Weekend Food For Thoughts …… 5

by YH Wong, BH Global Advisers Sdn. Bhd.
2. Market Commentaries
i) Bursa Malaysia Kuala Lumpur Composite Index (KLCI) …….. 6
ii) Singapore Straits Times Index (STI) …….. 8
iii) Thailand SET Index (SETI) …….. 10
iv) Hong Kong Hang Seng Index (HSI) …….. 12
v) Dow Jones Industrial Average (DJI) …….. 17
3. Regional Market Forecast Group …….. 16
4. Regional Traders Education Events …….. 17
Disclaimer and Copyright …….. 18
© 2006 - 2007 NextView Investors Education Group. All rights reserved. 1

1. Trading Article:
The One Point Rule
By Vincent Troncone of www.pennies-from-heaven.us
Back in 2000, I was in the middle of a wheat trade. At the time, I was short using a daily
chart. While trading that day, I discovered what I call The 1 Point Rule. Initially, when I
became aware of it, I just thought it was a fluke. I figured it was a temporary effect in the
wheat market and never gave it a second thought.
Recently, I re-discovered this little gold nugget, and you will too in The 1 Point Rule. This secret is
simple, yet very powerful.
In many areas of life, we have been conditioned to believe it must be complicated because, if it were
simple, everyone would either know about it or be doing it.
This type of thinking is precisely what keeps us from discovering the knowledge we seek.
The Discovery
When I have seen a market break the current high or low on a daily chart of the previous day by one
point or more, the trend in that market typically continues or closes in the direction of the price
break for the session / price bar.
Provided it wasn’t a reversal day / bar.
I have observed that this rule works best using daily, weekly and monthly charts. Although,
occasionally, I have seen this phenomenon occur at 1 point or less in these time frames, it is the
exception, not the rule.
I only use The 1 Point Rule (1 point or better) in the time frames given previously in this article
simply because it occurs most often in these time frames and works consistently, over and over
again.
Simply put, I stick with the odds instead of trying to trade the exception to the rule. Remember that
we are trying to trade when the odds are most favorable. Any little insight we can gain may be the
difference between winning and losing.
The Basic Concept
Look at the current price bar in comparison to the previous price bar in the time frame you are
trading to see if the current price bar has broken above or below the high or low of the previous
price bar by one point or better.

Chart Figure 1: Daily wheat chart to see what this entails from a bullish perspective
If so, the trend for that price bar will typically continue or close in the direction of the price break,
provided it is not a reversal day / bar.
I am not making a claim that this will happen every single time in every time frame 100 percent of
the time. As I stated earlier, there are exceptions to the rule.
It’s just something I have noticed that occurs quite often.
On that note, let us take a look at a daily wheat chart to see what this entails from a bullish
perspective.
Now take a look at Chart Figure 2, which presents The 1 Point Rule from a bearish perspective.

Chart Figure 2: The 1 Point Rule from a bearish perspective
Try it for yourself, and happy trading.

Weekend Food For Thought
By YH Wong, BH Global Advisers Sdn Bhd
In the global credit markets, emerging-market spreads show little trouble thus far. Risk appetite for
Asian equities remains strong thanks to a huge global liquidity trap. Yes, liquidity remains the
rallying cry of the bulls. Meanwhile, the financial papers were a-buzz with takeovers and rumours of
takeovers. Despite all the positive headlines, we have been keeping a close eye on all asset classes.
It seems to us that the risk level now is similar to prior to LTCM meltdown. In the current "bullish"
environment, investment and private equity firms are paid handsomely for activity, not results.
Beijing is still searching for solutions to control the situation. Both the Chinese economy and stock
market are already growing out of control. Last year, the Shanghai Composite index rose 130%. It's
up another 50% so far this year plus many other speculative stocks have gone up much more. If
those overvalued stocks get punished, Chinese retail investors will feel the most pain not the
foreign money.
It must be an odd experience for the Chinese ruling elite now. They are stuck with a bubble and it
will be interesting to see how they react. The recent announcement on QDII relaxation for individual
mainland investors is an indication that the Chinese authorities are becoming increasingly worried
over the level of speculation in the A-share market.
Macro speculators remain determined to pressure the Chinese authorities to boost the Yuan further.
Well, they have been sitting on long positions on Asian currencies over the past two years. Now
under growing pressure, China could opt for a stronger Yuan to tackle the increasingly unbalanced
economy but such move could invite more hot money to the regional markets. Talking about the
currency outlook, there are signs that Ben Bernanke could drop rates further if core inflation
continues to decline in the second half of the year, a move that will be bearish for the fragile
greenback.
There are rumors going around that China has made a smoky, back room deal with the U.S. The
formula is China agrees to allow greater flexibility in the Yuan if the U.S. backs off with the
protectionism bills and help to contain the growing bubble in the Chinese stock market. Of course,
there will be other deals in favour of the US. We all know very well that the last thing China wants
is a crash before the Beijing Olympics next year. Social unrest is not what that country needs ahead
of the games.
A realistic assessment would indicate that challenges remain. So, where is the real risk today?
China could fall sharply and drag down the rest of the world. However, I believe my clients would
not react emotionally to a correction. In anticipation of a significant downturn in the markets,
leveraged traders should better take note. A long-term investor who holds positions for months or
years may not feel it as much, but the average over-leveraged trader could not sit it out. Of course,
it's possible that equity bulls could be dead right, that markets will keep bubbling for a while.
That's the way that it looks from here.
YH Wong is the Head of Strategy with BH Global Advisers Sdn. Bhd., a licensed
investment advisory firm. You may reach him or his team at (603) 2166 8896.

2. Market Commentaries
i) Bursa Malaysia Kuala Lumpur Composite Index (KLCI)
Technical Analysis as of 18/5/2007
Basic Price information

Close: 1,356.84
Trend Analysis
MACD (19.3897)
MACD is indicating that the current short term price trend is bearish. The momentum of the trend is Strong.
Moving Averages 10-day(1,355.2170), 30-day(1,327.2587), 60-day(1,269.8514), 100-day(1,224.9750).

SHORT-Term Trend: Very bullish
LONG-Term Trend: Very bullish
Support and Resistance Analysis

Immediate Support: 1,313.4200
Longer term Support: 1,144.1200

Immediate Resistance: 1,368.8700
Longer term Resistance: 1,368.8700
100 day SMA Support: 1,224.9750

Stochastic(77.5127) is currently slightly overbought and is getting higher.
Price Reversals
Candesticks
Bullish Candlestick pattern: No bullish candlestick pattern detected in the last 3 days.
Bearish Candlestick pattern: Hanging Man is detected today
Bar Chart Patterns

Bar Chart Bullish Price Reversal Pattern: No bar chart bullish price reversal detected for the last 3 days
Bar Chart Bearish Price Reversal Pattern : No bar chart bearish price reversal detected for the last 3 days
Stochastic
Stochastic Bullish Price Reversal : No bullish reversal in the last 2 days.
Stochastic Bearish Price Reversal : No bearish reversal in the last 2 days.
Volatility Analysis
Short term volatility: The ATR has declined therefore price action is less volatile
Longer Term volatility: The Bollinger Bands are expanding therefore price action is more volatile
Volume Analysis
Volume: 50,000 shares, 30-day average volume: 85,567 shares.
Volume strength is weak. The On Balance Volume is increasing, indicating accumulation of shares in the
market.
________________________________________________________

ii) Singapore Straits Times Index (STI)

Close: 3,512.3999
Change: -13.1101
Volume: 312,000 shares
Trend Analysis
MACD (47.0361)
MACD is indicating that the current short term price trend is very bullish. The momentum of the trend is
however, weak.
Moving Averages 10-day(3,480.0959), 30-day(3,422.1614), 60-day(3,296.0208), 100-day(3,215.6433).




Stochastic(90.9500) is currently overbought and is getting higher.
Price Reversals
Candesticks
Bearish Candlestick pattern: No bearish candlestick pattern detected in the last 3 days.
Bar Chart Patterns

Stochastic
Volatility Analysis
Longer Term volatility: The Bollinger Bands are contracting therefore price action is less volatile
Volume Analysis
Volume: 312,000 shares, 30-day average volume: 198,600 shares.
Volume strength is strong. The On Balance Volume is declining, indicating distribution of shares in the
market.

iii) Thailand SET Index

Close: 728.76
Trend Analysis
MACD (9.0878)
strong.
Moving Averages 10-day(714.9930), 30-day(699.7380), 60-day(688.8120), 100-day(679.2840).


Immediate Support: 690.7900
Longer term Support: 666.3000
Immediate Resistance: 733.1000
Longer term Resistance: 733.1000

100 day SMA Support: 679.2840
200 day SMA Support: 695.1233
Price Reversals
Candesticks
Bearish Candlestick pattern: Long Upper Shadow is detected today
Bar Chart Patterns

Bar Chart Bearish Price Reversal Pattern : Island Reversal DOWN detected today
Stochastic
Volatility Analysis
Short term volatility: The 3-period ATR (7.5093) has increased therefore price action is more volatile
Longer Term volatility: The Bollinger Bands are expanding therefore price action is more volatile
Volume Analysis
Volume: 3,882,000 shares, 30-day average volume: 1,927,367 shares.
Volume strength is strong. The On Balance Volume is increasing, indicating accumulation of shares in the
market.
________________________________________________________

iv) Hong Kong Hang Seng Index (HSI)

Close: 20,904.84
Trend Analysis
MACD (179.9311)
MACD has just crossed below its trigger line today, indicating a bearish reversal in the short term. MACD is
indicating that the current short term price trend is bearish. The momentum of the trend is Strong.
Moving Averages 10-day(20,834.6348), 30-day(20,611.8945), 60-day(20,111.0410), 100-

day(20,131.1289).



Price Reversals
Candesticks
Bearish Candlestick pattern: No bearish candlestick pattern detected in the last 3 days.
Bar Chart Patterns

Stochastic
Volatility Analysis
Volume Analysis
Volume: 1,294,135,040 shares, 30-day average volume: 1,431,161,216 shares.
Volume strength is moderate. The On Balance Volume is declining, indicating distribution of shares in the
market.

v) Dow Jones Industrial Average (DJI)

Close: 13,556.53
Trend Analysis
MACD (195.8401)
strong.
Moving Averages 10-day(13,377.7656), 30-day(13,041.4063), 60-day(12,685.4893), 100-

day(12,633.0742).



Price Reversals
Candesticks
Bearish Candlestick pattern: Bearish Harami was detected yesterday
Bar Chart Patterns

Bar Chart Bearish Price Reversal Pattern : Key Reversal DOWN was detected yesterday
Stochastic
Volatility Analysis
Volume Analysis
Volume: 282,936,000 shares, 30-day average volume: 239,500,208 shares.
Volume strength is moderate. The On Balance Volume is increasing, indicating accumulation of shares in the
market.

3. Regional Market Forecast Group
Note:
Forecast Direction
S = Sideway
U = Up
D = Down
Sideway market is considered if the index falls between 0.4% of the index close on Friday
Sideway Range Calculation Close Sideway Range
KLCI 1356.8 1351.4 to 1362.3
STI 3512.4 3498.4 to 3526.4
HSI 20904.8 20821.2 to 20988.5
SETI 728.8 725.8 to 731.7
Direction is based on next Fridays close. If next Friday's close is above the sideway range, direction is considered up and vice versa for price below sideway range

4. Regional Traders Education Events this week
MALAYSIA

________________________________________________________________________________________
DISCLAIMER AND COPYRIGHT NextView Sdn. Bhd. (574271-D) and NextView Traders Club (NVTC) are NOT a licensed
investment advisors. This publication, which is generally available to members of NVTC, falls under Media Advice provisions. These
analysis notes are based on our experience of applying technical analysis to the market and are designed to be used as a tutorial showing
how technical analysis can be applied to a chart example based on recent trading data. This newsletter is a tool to assist you in your
personal judgment. It is not designed to replace your Licensed Financial Consultant, your Stockbroker. It has been prepared without
regard to any particular person's investment objectives, financial situation and particular needs because readers come from diverse
backgrounds, with diverse objectives and financial situations. This information is of a general nature only so you should seek advice from
your broker or other investment advisors as appropriate before taking any action. The decision to trade and the method of trading is for
the reader alone to decide. The author, contributors and publisher expressly disclaim all and any liability to any person, whether the
purchase of this publication or not, in respect of anything and of the consequences of any thing done or omitted to be done by any such
person in reliance, whether whole or partial, upon the whole or any part of the contents of this publication. Neither NextView Sdn Bhd
(including offices in other countries) nor its officers, employees and agents, will be liable for any loss or damage incurred by any person
directly or indirectly as a result of reliance on the information contained in this publication. The information contained in this newsletter is
copyright and for the sole use of NVTC Members. It cannot be circulated to other readers without the permission of the publisher. This is
not a newsletter of stock tips. Case study trades are notional and analyzed in real time on a weekly basis. NextView Sdn Bhd does not
receive any commission or benefit from the trading activities undertaken by readers, or any benefit or fee from any of the stocks reviewed
in the newsletter. NextView Sdn Bhd is an independent financial education organization and research is supported by NVTC annual
membership fees.
OFFICES;
Head Office Malaysia: B-9-12, Block B, Level 9 Megan Avenue II, 12 Jalan Yap Kwan Seng, 50450 Kuala Lumpur, Malaysia. Singapore: 5 Shenton Way,
#02-03/05 UIC Building, Singapore 068808. Thailand: The Millennia Tower, 18th Floor, Unit 1806, 62 Langsuan Road, Lumphini, Pathumwan Bangkok,
10330, Thailand. Hong Kong: Room B, 16/F, Crawford Tower, 99 Jervois Street, Sheung Wan, Hong Kong. China: 59 Yunnan North Road , Liu He
Building Unit 20-03 Postal Code 200001, Shanghai , China.

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NextVIEW Traders Club Weekly Newsletter

Published by NextView Sdn. Bhd. (574271-D) Ph +6 03 27139388 Fax +6 03 27139366

Newsletter for the week ending 18 May 2007

THIS WEEK’S CONTENTS:

1. Investment/Trading Related Articles:

Weekend Food For Thoughts …… 5

ii) Singapore Straits Times Index (STI) …….. 8

iii) Thailand SET Index (SETI) …….. 10

iv) Hong Kong Hang Seng Index (HSI) …….. 12

v) Dow Jones Industrial Average (DJI) …….. 17

3. Regional Market Forecast Group …….. 16

4. Regional Traders Education Events …….. 17

Disclaimer and Copyright …….. 18

© 2006 - 2007 NextView Investors Education Group. All rights reserved. 1

Provided it wasn’t a reversal day / bar.

The Basic Concept

© 2006 - 2007 NextView Investors Education Group. All rights reserved. 2

It’s just something I have noticed that occurs quite often.

© 2006 - 2007 NextView Investors Education Group. All rights reserved. 3

Try it for yourself, and happy trading.

© 2006 - 2007 NextView Investors Education Group. All rights reserved. 4

That's the way that it looks from here.

© 2006 - 2007 NextView Investors Education Group. All rights reserved. 5

Basic Price information

Moving Averages 10-day(1,355.2170), 30-day(1,327.2587), 60-day(1,269.8514), 100-day(1,224.9750).

Support and Resistance Analysis

© 2006 - 2007 NextView Investors Education Group. All rights reserved. 6

100 day SMA Support: 1,224.9750

Stochastic(77.5127) is currently slightly overbought and is getting higher.

Bar Chart Patterns

© 2006 - 2007 NextView Investors Education Group. All rights reserved. 7

Basic Price information

Moving Averages 10-day(3,480.0959), 30-day(3,422.1614), 60-day(3,296.0208), 100-day(3,215.6433).

Support and Resistance Analysis

© 2006 - 2007 NextView Investors Education Group. All rights reserved. 8

100 day SMA Support: 3,215.6433

Stochastic(90.9500) is currently overbought and is getting higher.

Bar Chart Patterns

© 2006 - 2007 NextView Investors Education Group. All rights reserved. 9

Basic Price information

Moving Averages 10-day(714.9930), 30-day(699.7380), 60-day(688.8120), 100-day(679.2840).

Support and Resistance Analysis

© 2006 - 2007 NextView Investors Education Group. All rights reserved. 10

Stochastic(92.2171) is currently overbought and is getting higher.

Bar Chart Patterns

© 2006 - 2007 NextView Investors Education Group. All rights reserved. 11

Basic Price information

Moving Averages 10-day(20,834.6348), 30-day(20,611.8945), 60-day(20,111.0410), 100-

Support and Resistance Analysis

© 2006 - 2007 NextView Investors Education Group. All rights reserved. 12

100 day SMA Support: 20,131.1289

Stochastic(85.0545) is currently overbought and is getting higher.

Bar Chart Patterns

© 2006 - 2007 NextView Investors Education Group. All rights reserved. 13

Basic Price information

Moving Averages 10-day(13,377.7656), 30-day(13,041.4063), 60-day(12,685.4893), 100-

Support and Resistance Analysis

© 2006 - 2007 NextView Investors Education Group. All rights reserved. 14

100 day SMA Support: 12,633.0742

Stochastic(96.9476) is currently overbought and is getting higher.

Bar Chart Patterns

© 2006 - 2007 NextView Investors Education Group. All rights reserved. 15