NVTC Newsletter080104

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 4 January 2008
THIS WEEK’S CONTENTS:

Page
1. Investment/Trading Related Articles:

Endowment Theory …… 2
by Stuart McPhee, private trader, author and trading coach
2. Market Commentaries
i) Bursa Malaysia Kuala Lumpur Composite Index (KLCI) …….. 4
Additional KLCI analysis by Benny Lee …….. 5
ii) Singapore Straits Times Index (STI) …….. 6
Additional STI analysis by Benny Lee …….. 7
iii) Thailand SET Index (SETI) …….. 8
Additional SETI analysis by Don Schellenberg …….. 9
iv) Hong Kong Hang Seng Index (HSI) …….. 12
Additional HSI analysis by Benny Lee …….. 13
v) Dow Jones Industrial Average (DJI) …….. 14
Additional DJI analysis by Benny Lee …….. 15
3. Regional Market Forecast Group (N/A this week) …….. 16
4. Regional Traders Education Events …….. 17
Disclaimer and Copyright …….. 18
© 2006 - 2008 NextView Investors Education Group. All rights reserved. 1

1. Trading/Investment Related Articles:
Endowment Theory
By Stuart McPhee, private trader, author and trading coach
Whilst trading routinely involves decision making, there are no more important decisions you have to
make than when to close positions. Quite a few traders often overlook this part of trading or
underestimate how important that it is. It is selling that impacts directly on whether or not you make any
money trading. Buying shares is simply a means of putting yourself in a position to make money from
trading.
There is a typical experiment which is conducted in Economic and similar classes, which relates well to
selling shares. It involves dividing a room of people into two groups. Everybody in the first group is
handed an imaginary coffee mug. People in the second group receive nothing.
Everybody in the first group is asked to write down on a piece of paper how much they would be prepared
to sell their coffee mug for. Everybody in the second group is asked to write down on a piece of paper
how much they would be prepared to buy the coffee mug for.
The amounts from all people within each group are compiled and an average calculated for each group.
Generally speaking the average amount from the owners of the coffee mugs is double that of the average
amount from the potential buyers of the coffee mugs. This observation supports the Endowment Theory.
The Endowment Theory suggests that people who own something place a greater value on it than those
who do not have it. This is applicable in the sharemarket, and can affect your decision making when
deciding to sell shares that you should be selling. Often you will find yourself owning shares and believing
that they are worth more than what the present share price is. The only unfortunate thing about that is the
real price is what it is presently trading for on the market and not what you think they should be worth.
This can affect you by convincing you not to sell shares when you may be best advised to sell them to
stop any further potential loss. You may have bought shares for $4.00 and set a stop loss at $3.50 for
example. A week later the shares are trading at $3.50 and you have received your cue to sell them.
Thoughts enter you mind about how it was only a week ago that you paid $4.00 for them and how you
think they are still worth that especially when you consider the report they released last week concerning
future growth, for example.
These thoughts can paralyse you to take no action and not cut your losses and consequently have you
breaking one of the most important time tested rules you can follow.

About the Author:
Stuart McPhee is a private trader, author and trading coach. He has written numerous articles and texts
including Trading in a Nutshell, 2nd Edition. He also conducts trading courses throughout South East
Asia and has presented at trading expos in Singapore, Kuala Lumpur, Ho Chi Minh City, and Shenzhen.
Visit Stuart’s ‘Develop your Trading Plan’ website (www.trading-plan.com) for detailed information on
how to develop a trading plan that is right for you and that you will implement with confidence. Also
available is a regular ezine full of useful trading tips and ideas.

2. Market Commentaries
i) Bursa Malaysia Kuala Lumpur Composite Index (KLCI)
Technical Analysis as of 04/01/2008
Basic Price information

Close: 1,466.67
Trend Analysis
MACD (13.7736)
MACD is indicating that the current short term price trend is very bullish. The momentum of the trend is
strong.
Moving Averages 10-day(1,430.5651), 30-day(1,408.0613), 60-day(1,396.0377), 100-day(1,354.8093).

SHORT-Term Trend: Very bullish
LONG-Term Trend: Very bullish

Support and Resistance Analysis
Immediate Support: 1,382.4399
Longer term Support: 1,338.1400
Immediate Resistance: 1,467.7800
Longer term Resistance: 1,467.7800
100 day SMA Support: 1,354.8093

Stochastic(84.4017) is currently overbought and is getting higher.
Price Reversals
Candesticks
Bullish Candlestick pattern: No bullish candlestick pattern detected in the last 3 days.
Bearish Candlestick pattern: No bearish candlestick pattern detected in the last 3 days.
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 : Stochastic crossed below its %D yesterday.
Volatility Analysis
Short term volatility: The 3-period ATR (18.0795) 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: 221,000 shares, 30-day average volume: 174,033 shares.
Volume strength is moderate. The On Balance Volume is increasing, indicating accumulation of shares in the
market.
________________________________________________________
Additional KLCI analysis by Benny Lee, Chief Market Strategist, NextView
KLCI at resistance level
The KLCI started the New Year with a bang, particularly last Friday when the benchmark index
soared 31.29 points or 2.18% to close at its historical high at 1,466.67 points. The KLCI outshines
all other major markets which are currently struggling in the correction. Can the KLCI continue its
bullish momentum, now that the US Dow Jones Industrial Average (DJI) closed about 256 points or
2% lower last Friday?
Technically, the KLCI has a projected target of 1,490 points but currently KLCI is at a resistance
level and therefore a short correction is expected before the KLCI can resume its uptrend. The
correction is expected to test the support level of 1,430 points.

ii) Singapore Straits Times Index (STI)

Close: 3,437.79
Trend Analysis
MACD (-21.0028)
MACD is indicating that the current short term price trend is bullish. The momentum of the trend is strong.
Moving Averages 10-day(3,436.4570), 30-day(3,453.0291), 60-day(3,573.1465), 100-day(3,540.7871).

SHORT-Term Trend: Very bearish
LONG-Term Trend: Bearish


100 day SMA Resistance: 3,540.7871
Stochastic(48.2389) is currently in neutral zone and is getting lower.
Price Reversals
Candesticks
Bar Chart Patterns

Stochastic
Stochastic Bearish Price Reversal : No bearish reversal in the last 2 days.
Volatility Analysis
Longer Term volatility: The Bollinger Bands are contracting therefore price action is less volatile
Volume Analysis
Volume: 157,000 shares, 30-day average volume: 192,900 shares.
Volume strength is moderate. The On Balance Volume is increasing, indicating accumulation of shares in the
market.
________________________________________________________
Additional STI analysis by Benny Lee, Chief Market Strategist, NextView
STI geared to continue down trend
The STI failed to increase higher in the past 2 weeks and therefore the STI is still in a down trend.
Momentum of the down trend is also quite strong and therefore the STI is expected to test new lows.
The STI tested the down trend resistance level at 3,490 points last week and closed at 3437.79
points. The STI is expected to test and go lower than the current 4 months low at 3,292 points to
the down trend support level of 3,200 points. Therefore, support and resistance level for the STI is
at 3,200 and 3,490 points respectively.

iii) Thailand SET Index

Close: 821.71
Trend Analysis
MACD (-1.9087)
MACD is indicating that the current short term price trend is bullish. The momentum of the trend is however,
weak.
Moving Averages 10-day(830.2240), 30-day(829.6063), 60-day(854.4130), 100-day(836.0784).

LONG-Term Trend: Bearish

Immediate Support: 790.8700
Longer term Support: 790.8700
Immediate Resistance: 860.6900

Longer term Resistance: 924.7000
100 day SMA Resistance: 836.0784

200 day SMA Support: 793.1072
Price Reversals
Candesticks
Bearish Candlestick pattern: Engulfing Bear was detected 2 days ago
Bar Chart Patterns

Bar Chart Bearish Price Reversal Pattern : Key Reversal DOWN was detected 2 days ago
Stochastic
Stochastic Bearish Price Reversal : Stochastic crossed below its %D yesterday.
Volatility Analysis
Volume Analysis
Volume: 224,420,000 shares, 30-day average volume: 190,114,496 shares.
Volume strength is moderate. The On Balance Volume is declining, indicating distribution of shares in the
market.
________________________________________________________
Additional Thailand Stock Market analysis by Don Schellenberg, Senior Market
Strategist, NextView
SETI Commentary
Thailand’s Stock Index is moving very much like I suggested in my last commentary on December
14th, 2007. I noted in this column that, even though the market was going up at the time, it looked
weak, with the probability that value would fall lower.
The subsequent move below 800, and more importantly, the pattern that price created on the chart,
has bearish implications.
If there is a close in value below 817., the Index will probably drop down to support near 730. or
even 650. over the next few weeks.
After that we will have to re-examine the potential for bullishness to return to this market.

TECHNICAL INDICATORS
Today I’m displaying the weekly chart of SET Index.
NextView RSI – this indicator is just barely in positive territory, and looking weak.
Li’s Sandwich – value of the Index is below the balance line of this indicator, and most of the gains
of the past week have been eroded away.
Support – S1 at 740, and S2 at 650. indicate potential areas of support.

Resistance – R1 at 860. and R2 at 924. are visible areas of resistance on the chart.
ASP Commentary
This relatively low-priced stock has been moving sideways for over five months already.
Probably there is more sideways and even downside direction to come. However as long as the
nearest low at 3.44 is not exceeded to the downside, and if price rises above 3.80, there is a least
some potential for what is called a ‘counter-trend’ trade. That would be a trade against the current
trend, and is usually considered more dangerous that a trade with the trend, and may not yield
much profit.

In the near future this stock is more likely to drop down to test the low at 3.18, or 3.00 where is
even stronger support.
If the price of this stock drops below 3.50, a further drop as just mentioned, is almost inevitable.
TECHNICAL INDICATORS
NextView RSI – falling

MACD – in negative territory
R1 – 3.75
R2 – 3.95
S1 – 3.45
S2 – 3.15

iv) Hong Kong Hang Seng Index (HSI)

Close: 27,519.69
Trend Analysis
MACD (-216.4217)
MACD is indicating that the current short term price trend is very bearish. The momentum of the trend is
however, weak.
Moving Averages 10-day(27,479.5742), 30-day(27,782.1855), 60-day(28,520.6855), 100-

day(26,816.6973).
LONG-Term Trend: Very bullish



Price Reversals
Candesticks
Bar Chart Patterns

Stochastic
Volatility Analysis
Volume Analysis
Volume: 2,147,483,904 shares, 30-day average volume: 2,066,467,584 shares.
market.
________________________________________________________________________________________
Additional HSI analysis by Benny Lee, Chief Market Strategist, NextView
HSI correction may soon end
The HSI did not make any major move in the last 2 weeks. Last Friday, the HSI closed at 27,519.69
points after trading in a tight 1,500 points or 5.4%. The HSI has been in a correction mode since
November last year and this has formed a triangle pattern on the chart. The triangle is currently
near its apex with a support level (bottom line of the triangle) at 26,200 points and the resistance
level (top line of the triangle) at 27,600 points. The current up trend is at a crossroad and if the HSI
is able to break the resistance level, it may continue its uptrend. If the HSI breaks below the support
level, more downside correction is expected.

v) Dow Jones Industrial Average (DJI)

Close: 12,800.18
Trend Analysis
MACD (-73.5272)
MACD is indicating that the current short term price trend is very bearish. The momentum of the trend is
strong.
Moving Averages 10-day(13,268.8467), 30-day(13,283.1787), 60-day(13,435.3340), 100-

day(13,452.6768).
LONG-Term Trend: Very bearish



Stochastic(6.2669) is currently oversold and is getting lower.
Price Reversals
Candesticks
Bullish Candlestick pattern: Bullish Harami was detected yesterday
Bar Chart Patterns

Stochastic
Volatility Analysis
Longer Term volatility: The Bollinger Bands are expanding therefore price action is more volatile
Volume Analysis
Volume: 304,208,992 shares, 30-day average volume: 228,241,856 shares.
market.
________________________________________________________________________________________
Additional DJI analysis by Benny Lee, Chief Market Strategist, NextView
12,700 points support level may not be able to hold
The US market started the New Year in a bad note as it fell about 550 points or 4.1% last week to
close at 12,800.18 points. In the past 2 weeks, the DJI had a chance to change the current down
trend. It failed and is now resuming the down trend. The current support level is at 12,700 and this
support level may not be able to hold because the momentum of the down trend is strong. Therefore
the DJI may test and go below this support level. If this happens, the DJI can only find support at
12,000 points. Resistance level is at 13,400 points.

3. Regional Market Forecast Group
Not Available this week

4. Regional Traders Education Events this week
HONG KONG

________________________________________________________________________________________
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: 98 Liuhe Road, 16A GangLu
HuangPu Center Building, Shanghai 200001

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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 4 January 2008

THIS WEEK’S CONTENTS:

1. Investment/Trading Related Articles:

3. Regional Market Forecast Group (N/A this week) …….. 16

4. Regional Traders Education Events …….. 17

Disclaimer and Copyright …….. 18

© 2006 - 2008 NextView Investors Education Group. All rights reserved. 1

© 2006 - 2008 NextView Investors Education Group. All rights reserved. 2

© 2006 - 2008 NextView Investors Education Group. All rights reserved. 3

Basic Price information

Moving Averages 10-day(1,430.5651), 30-day(1,408.0613), 60-day(1,396.0377), 100-day(1,354.8093).

© 2006 - 2008 NextView Investors Education Group. All rights reserved. 4

100 day SMA Support: 1,354.8093

Stochastic(84.4017) is currently overbought and is getting higher.

Bar Chart Patterns

Additional KLCI analysis by Benny Lee, Chief Market Strategist, NextView

KLCI at resistance level

© 2006 - 2008 NextView Investors Education Group. All rights reserved. 5

Basic Price information

Moving Averages 10-day(3,436.4570), 30-day(3,453.0291), 60-day(3,573.1465), 100-day(3,540.7871).

Support and Resistance Analysis

© 2006 - 2008 NextView Investors Education Group. All rights reserved. 6

Stochastic(48.2389) is currently in neutral zone and is getting lower.

Bar Chart Patterns

Additional STI analysis by Benny Lee, Chief Market Strategist, NextView

STI geared to continue down trend

© 2006 - 2008 NextView Investors Education Group. All rights reserved. 7

Basic Price information

Moving Averages 10-day(830.2240), 30-day(829.6063), 60-day(854.4130), 100-day(836.0784).

Support and Resistance Analysis

© 2006 - 2008 NextView Investors Education Group. All rights reserved. 8

100 day SMA Resistance: 836.0784

Stochastic(59.5340) is currently in neutral zone and is getting lower.

Bar Chart Patterns

© 2006 - 2008 NextView Investors Education Group. All rights reserved. 9

Today I’m displaying the weekly chart of SET Index.

Support – S1 at 740, and S2 at 650. indicate potential areas of support.

© 2006 - 2008 NextView Investors Education Group. All rights reserved. 10

NextView RSI – falling

© 2006 - 2008 NextView Investors Education Group. All rights reserved. 11

Basic Price information

Moving Averages 10-day(27,479.5742), 30-day(27,782.1855), 60-day(28,520.6855), 100-

Support and Resistance Analysis

© 2006 - 2008 NextView Investors Education Group. All rights reserved. 12

100 day SMA Support: 26,816.6973

Stochastic(44.2196) is currently in neutral zone and is getting lower.

Bar Chart Patterns

Additional HSI analysis by Benny Lee, Chief Market Strategist, NextView

HSI correction may soon end

© 2006 - 2008 NextView Investors Education Group. All rights reserved. 13

Basic Price information

Moving Averages 10-day(13,268.8467), 30-day(13,283.1787), 60-day(13,435.3340), 100-

Support and Resistance Analysis

© 2006 - 2008 NextView Investors Education Group. All rights reserved. 14

100 day SMA Resistance: 13,452.6768

Stochastic(6.2669) is currently oversold and is getting lower.

Bar Chart Patterns

Additional DJI analysis by Benny Lee, Chief Market Strategist, NextView

12,700 points support level may not be able to hold

© 2006 - 2008 NextView Investors Education Group. All rights reserved. 15