Technically speaking:

1. As at Tuesday’s close at 1290.13 the KLCI was lower by 0.77 points or 0.06%. Losers led gainers 695 to 248 and trading volume was 1.251 billion shares.

2. The Dow rebounded by a stunning 286 points on Monday’s trading, but there was no traction on Malaysian stocks.

3. The initial morning rally on the KLCI, of 12.18 points and a further rally to test a high of 24.82 points, did not last as funds buying fizzled out almost immediately giving back all of its gains by the day’s end to close lower by 0.77 points or 0.06%.

4. The indices of Malaysia, together with Singapore, Hong Kong, Taiwan, Thailand and Indonesia closed the day lower in spite of the Dow’s 286 points rally the night before. Only the Australian, Philippines and Korean indices closed in positive territory. Japan’s index was almost even.

5. When we did a scan on the Malaysian stocks last night, we noted a hefty 184 stocks with sell signals based on our Channel Break Out (C.B.O.) 20-10 trading system. This is really bad news for the local bourse, and is a strong indication of further weakness to come. We also note there were no buy signals coming from the same trading system.

6. Singapore stocks were equally bearish, with 74 stocks emitting fresh sell signals and zero buy signals. In short stay out of both the Singapore and Malaysian stock market.

7. We expect further weakness on local stocks. But we also observed that our market is reaching an oversold stage where a rebound may well happen. However, we would only buy after we witness sharp plunges on our stocks. As a guide we table below the target prices of some stocks where one may buy on dips. (OL = or lower)

8.

1RANHILL2.00 OL15WCTLAND1.50 OL

2MUHIBAH6.40 OL16YTLLAND1.25 OL

3MRCB2.07 OL17YNHPROP1.85 OL

4APLI0.35 OL18BJLAND1.00 OL

5COASTAL2.14 OL20FABER1.18 OL

6FAVCO1.27 OL21HUBLINE0.42 OL

7GUH0.56 OL22KENCANA1.60 OL

8SCOMI1.29 OL22KPS1.76 OL

9BRDB2.15 OL23KUB0.64 OL

10BSTEAD3.50 OL24TWSCORP0.92 OL

11EQUINE1.62 OL25EKOVEST-WA1.55 OL

12SDRED0.72 OL26HUNZPTY-WA1.22 OL

13SPB3.20 OL27SAPCRES-WA0.78 OL

14TEBRAU0.76 OL---

9. Our targets for the KLCI remain at 1222 and 1090 for the near term based on the Elliott wave theory.

10.The ringgit remained unchanged, at 3.4650.

CONCLUSION: We consider Prof Pruden’s target of 14,400 having been achieved. Watch closely the movements of the Dow, which may rebound after a sell-off. Look for further weakness to test 12,000. This in turn should negatively affect world equity markets. We are staying out.

Long-term Upside Targets:1494 (Target amended on 15/6/07).

Immediate downside targets: 1348 (hit!)/1291(hit)/1222/1090