Bursa KL: Surviving Friday

First, we have the January effect. Then there are the days for window dressing as each year drew to a close.

As we draw inspiration and exasperation from Wall Street, the trading moods of high and low are somehow predetermined in such secondary satellite markets as Malaysia. Except a few cornered counters which could be determined by nudge,push and shove, the broader market is unlikely to have traction if Wall Street should dip. Strangely, when Wall Street should go up, the local bourse is slow to react.

One thing to be said lately about Bursa KL. It does not have that element called momentum. As such prices of a counter can move up a day or two and then fell below that price in which it started the advance.

The other thing to note is the Friday Fear Syndrome. As a developing nation, Malaysia is beset with local political problem. One small political hiccup can stir a hornet's nest and capital flight. As such, very few institutional players will take position on Friday. As many so called 'bad things' can happen during the week-ends, they will sell into strength on Fridays and then take new positions on Monday next if the 'coast is clear'.

So, if you are contemplating on entering the stock market, Fridays are good days. Prices normally comes off as the bargain hunters averages down on their favourite counters. Bargain a few notches down and take the gamble. Someone may just give the shares to you.

Normally, if a stock can survive Fridays without coming off or can climb against gravity ,it is worth a second look provided you can hold it medium term.

Do study the counters before you jump into the foray.

Happy investing!