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lue chip stocks continue to rise with better corporate earnings and upbeat economic data. The benchmark FBMKLCI index has risen for three consecutive weeks. Last week, the index closed at its highest level since 17 January 2008 at 1,441.07 points. The index is now just slightly below the FBMKLCI all time high at 1,516.22 points.

The bulls has not slowed down its charge on the local equity market as the Malaysian equity market barometer, the FBMKLCI close at its highest level in 30 months. The market was bullish the whole of last week except for Wednesday when the index fell 8.8 points. However, the correction was short-lived when the index rebounded to close 11 points higher.

Last week, the bulls have awakened from their slumber and continue charging. The MACD indicator, which crossed below its 9-day moving average or trigger line two weeks ago is not back above its moving average as the MACD continues to make new highs. The RSI indicator was also making new highs last week.

Over recent months a distinctive rebound pattern has developed in many Asian markets. It is based on a flag pattern, but traders cannot use it in the same way. To illustrate the differences and to apply the appropriate trading techniques, we need to start with a brief revision of the classic and highly profitable bullish flag pattern.

History repeats, although the detail is always different. The study of history shows patterns of broad behavior and the outcomes. Financial markets are a creation of human behavior and they capture the fears, the hopes and the disappointments of a crowd of individuals. These emotions often manifest themselves in repeated patterns of behavior that appear as well defined chart patterns in market history.

The defeat of Kevin Rudd on Thursday provided short term news based trading opportunity. We have added this to the case study portfolio as an example of news based trading and the methods of analysis which are applied. I have detailed the analysis and trading steps we personally applied. ..