1
Rail Project Delay Dampens Market

• Why news (Newspaper, TV, rumors) are of little
  value or significance to disciplined investors
  using TA?

2
NST Friday, 12th Dec. 2003 Headline

• Rail Project delay dampens market
• Uncertainty impact Gamuda, MMC, Main
  Causalities
• Note MMC Malaysian Miming Corporation

If you happen to own the above shares, as
investors what would you do? If you are thinking
of buying the share after months of Listening to
news or rumors, should you forget about the
stocks now?
3

• We are going to demonstrate that
• News or rumors do not really help investors
• that we should take our position long before
  the news
• that we formulate strategies to make profit,
  prevent losses
• before investing, not rely on news or rumors.
• Just by using the little tools that we learned so
  far on
• Support Resistance.
• Later, when we pick up more tools,
• We could make wiser investment decision.
• The following MMC graphs are taken on the day of
  
• the Newspaper headline 12th Dec. 2003

4
Taking the longest timeframe from Yahoo, we see
that today headline is just a small blink (see
the red circle) of the overall MMC behavior. The
headline reads Rail Project delay dampens
market, sound so depressing.
5
The Newspaper did not will not say or remind
investors as earlier as Oct / Nov that MMC hit
the resistance 3rd times at B implying
investor should take profit or let go first,
another warning that before Dec the support at
C was broken. Implying more weakening of the
stock.
6
The Star Paper, 12th Dec. 2003 The
controversial RM14.5bil double-track railway
project must be postponed because the Government
has priority for other more important development
projects. All these months, the HOT news /
rumors were RM 14.5 bil contract to companies
like MMC. Hence the stock price soared. Since
May 2003 the KLCI also soared due to other news
or rumors like election, change of PM etc.
etc. Let us coolly and objectively manage these
news or rumor .
7
MMC soared since May03, with hot news of RM
14.5 bil contract. But one year ago May02, there
was not such hot news, and the price of MMC was
much higher (RM 3.5 compared with RM 2.9). What
is the use of news and rumor. If not, what do you
as investors rely on? In our case, better stick
to our Technical Analysis?
8
Do you notice that the many bad news since 2000,
Sept 11 attack on US, SARS, Iraq war, terrorism,
etc. MMC rise to A, as high as B in year
1995? Again News and perception do not help
investors much, do they?
9
It pays to be disciplined Technical Analysis
investors. Do take the effort to do all the
lessons given in this tuition class. Have at
least one stock graph for your practicing. With
patience and practice, you will soon share my
conviction that such investment approach can
create WEALTH for ourselves! So far we only use
SR lines, which already give us much clues about
investment opportunities and dangers. We need
other tools and practice to refine our
Investment strategies!