HK
Market

Market opened higher by
500 points starting at 19,869.02 but this proved to be the high of
the day as traders used the opportunity to sell their shares. The
pullback due to profit taking from the two big sharp rallies allowed
the market to correct by as much as 650 points down falling to
19,137.67 but quickly found buyers pushing the index higher to close
304.47 points up at 19,632.20.

Technical
View: Market may be due some short term choppy trading due to
the sharp rallies from previous days. Use intraday entry points as
the bias is still up with short term resistance seen at 20,500 to
20,800. It should be noted that the Hang Seng Index closed in a
hammer candlestick chart which is still bullish despite the 3300
points up from the Thursday lows.

Recommendation:
Lighten down on positions bought two days ago, look to buy
issues on a pullback.

Disclosure:
After recommendation, author has sold Tencent shares(700HK) at 62
and 63 levels after buying last Thursday at 51.90 for a rough 20%
profit. Author has also made tsupita trading, adding more shares
last Friday at 58.50 level and selling at 60.60 last Friday. Author
is currently long 2600 or Chalco at a price of 6.10. This was bought
last Sept 22,2008.

Stock
Pick: 2600 or Chalco

Chalco
has rallied from 4.6 to as high as 6.10 representing 30% profit from
the lows. While the rally seems substantial for some profit taking,
the chart is clearly showing that a MACD divergence is still in play
and strong volumes confirm more potential upside.

Recommendation:
Trade using a small position size, so as to have a wide proper stop.

Support:
5.50

Resistance:
7.00

Preferred
Entry: 5.80