Technically speaking:

1.As at Tuesday’s close at 1377.48 the KLCI was lower by 4.03 points or 0.29%. Losers led gainers 537 to 358. Trading volume was 1.24 billion shares.

2.The KLCI shrugged off three new highs made by the Dow and closed lower instead.

3.This is really frustrating for many investors of Malaysian stocks who had bought in the last couple of sessions, expecting the rising Dow to

lift Malaysian stocks higher.

4.And here may lay the irony. Immediately after you sell out in frustration, you could well see this market rebound, which could well be today.

5.Technically, the KLCI is still intact. Only problem with Malaysia is, there are no big funds entering our market, unlike Singapore.

6.Hence, volumes remain low, and rallies are truncated and short lived due to no follow through. Under the present circumstance, it is quite impossible to make money based on short-term trades.

7.Still, we expect the local market to wake up soon or late now that our rally is already overdue by three days compared to the Dow.

8.Yesterday, in spite of the flat market, some of our stocks did perform well. They were MUHIBAH, PLENITUDE, UMW-CA, BSTEAD, SALCON and

SAPCRES-WA. Making money is still possible, but one has to pick the right stocks.

9.Today, our stocks-to-watch are: MUHIBAH*, BSTEAD, PLENITUDE*, KUB*, UMW*, EKOVEST-WA (B.O.D.), SAPCRES-WA, UMW-CA.

10.New stocks are CAROTECH, SURIA.

11.What about stocks across the causeway?

12.In Singapore, the lower liner penny stocks are dominating play as retail investors buy them up strongly. Of the 22 stocks that we had

picked for today’s “buy" stocks for the Singapore market, 20 stocks are less than a Singapore dollar!

13.Here they are (Singapore stocks): ABTERRA LTD, ASCENDAS REAL ESTATE INV TRUST, ASCENDAS REAL ESTATE INV TRUST, AZTECH SYSTEMS LTD, CIRCUITS PLUS HOLDINGS LTD, CONTEL CORPORATION LIMITED, DARCO WATER TECHNOLOGIES LTD, EQUATION CORP LIMITED, HEALTH MANAGEMENT INTL LTD, HOR KEW CORPORATION LIMITED, JACKSPEED CORPORATION LIMITED, JOINN HOLDING LTD, NEW WAVE TECHNOLOGIES LTD, NUCLEUS ELECTRONICS LTD, ROTARY ENGINEERING LIMITED, ROWSLEY LTD W081117, SINGAPORE PETROLEUM COMPANY, STARTECH

ELECTRONICS LTD, STARTECH ELECTRONICS W090613, STRATECH SYSTEMS LIMITED, VALUETRONICS HOLDINGS LIMITED, WILMAR DB ECW071015, ZHONGHUI HOLDINGS LTD.

14.For the near term, we expect the KLCI to break out into a new historic high, in tandem with the rising Dow. The KLCI’s close above

its upper Bollinger band is an indication of the potential explosive move on the KLCI this coming week.

15.The KLCI is poised to test 1494, as the Dow makes it way towards 14,400 – Prof Pruden and Fred Tam’s target.

16.The ringgit fell back by 35 pips to 2.4430 from 3.4395.

CONCLUSION: As we are forecasting a higher Dow, its strength should rub-off onto Asian markets, and like it or not, some fallout will benefit the Malaysian market. It is not time stay out of the KLCI yet as the KLCI, at 1359.27, is still above its lower Bollinger band support of 1357 and its lower support of 1347.5. On the other hand, a breakout of the upper band at 1381 or higher would be a good sign of a possible explosive rally.

Long-term Upside Targets:1492 (Target amended on 15/6/07).

Immediate downside targets: 1348/1319/1291/1222