Year-end Window Dressing:
| Year | December Performance |
| 1995 | +43.48 (+4.6%) |
| 1996 | +11.44 (+0.9%) |
| 1997 | +49.0 (+9.0%) |
| 1998 | 84.66 (+16.9%) |
| 1999 | 77.67 (+10.6%) |
| 2000 | -50.31 (-6.9%) |
| 2001 | 58.07 (+9.1%) |
| 2002 | 17.1 (+2.7%) |
| 2003 | 14.66 (+1.9%) |
| 2004 | -9.76 (-1.1%) |
| 2005 | 3.66 (+0.4%) |
| 2006 | 15.58 (+1.4%) |
| 2007 | 48.05 (+3.4%) |
| 2008 | 10.61 (+1.2%) |
| 2009* | 8.48 (+0.7%) |
Table 1: KLCI year-end performance.
Table 1 shows the statistic of the December performance from for the past 15 years, and we can see that the KLCI usually give a positive performance in December, except for the year 2000 and 2004. Based on the above statistic, the chances of a positive December performance is 86.7%.
Chinese New Year Rally.
| Year | January（%） | Yearly （%） | CNY Effect. |
| 1995 | -87.92 （-9.1%） | +23.96 （+2.5%） | NO |
| 1996 | +60.25 （+6.1%） | +242.79 （+24.4%） | YES |
| 1997 | -19.75 （-1.6%） | -643.52 （-52%） | YES |
| 1998 | -24.93 （-4.2%） | -8.31 （-1.4%） | YES |
| 1999 | +5.3 （0.9%） | +226.2 （+38.6%） | YES |
| 2000 | +109.77 （+13.5%） | -132.69 （-16.3%） | NO |
| 2001 | +48.09 （7.1%） | +16.45 （+2.4%） | YES |
| 2002 | +22.73 （3.3%） | -49.77 （-7.1%） | NO |
| 2003 | +18.45 （+2.9%） | +147.62 （+22.8%） | YES |
| 2004 | +25 （+3.1%） | +113.49 （+14.3%） | YES |
| 2005 | +8.84 （+1%） | -7.64 （-0.8%） | NO |
| 2006 | +14.22 （+1.6%） | +196.45 （+21.8%） | YES |
| 2007 | +93.11 （+8.5%） | +348.79 （+31.8%） | YES |
| 2008 | -51.78 （-3.6%） | -568.28 （-39.3%） | YES |
| 2009* | +7.7 （+0.9%） | +394.06 （+44.9%） | YES |
Table 2: CNY rally and Yearly Performance of the KLCI.
Based on table 2 statistic, it shows that positive yearly performance started with a positive performance of January is 73.3%, this implies that if the January yield a positive performance, and the year that follows is likely to be positive too.
Chart 1: KLCI performance in 2009.
Therefore, by taking a guess, if the January of 2010 should produce a gain, then it is likely that the yearly performance of 2010 is positive too. As circled at A on chart 1, the KLCI only gained 7.7 points of 0.9% in January 2009, but the KLCI has gained 394 points or 45% so far.
This week's Case Studies.
Chart 2: Time, chart from 25/09/2009 to 16/12/2009.
Despite having a good chance for a Window Dressing effect, the KLCI has risen 45% this year, and it is safe to say that the KLCI is now on the higher side right now. Therefore, to avoid going against the major reversal of trend, investors can take a short term trading approach instead.
For example, Time 4456. Due the the obvious contraction of the Bollinger Bands, this suggests that price of Time is now consolidating while the beginning of a new movement is not far away. If the Bollinger Bands should re-expands, it would be a signal suggesting a beginning of a new movement and if the price of Time shall remain above the Bollinger Middle Band, it would be a positive signal.
However, due to the inconsistency of Time's fundamental, and no dividend were being paid out for many years, this counter is only good for short term trading, and definitely not a good pick for long term investment. Nevertheless, based on the latest earning report, it shows that the 3 quarters of 2009 are making profit, and its 4 quarters rolling PE is now 16.78 times, and therefore, if the 4th quarter performance of Time shall improve, chances for a rise in its stock price is high.
Most on top of all, a sound trading plan is needed when trading this stock. Therefore, investors can use the Yesterday's Low Trailing stop or the Exponential Moving Average as a trailing stop reference. When price should break below the trailing stop level, it is a signal to take profit or to cut-loss.
Table 3: Time yearly Dividend, Dividend Yield, Net Profit Ratio, PE ratio.
Table 4: Time recent quarterly earning per share, Dividend.
Other than Time, there are other counters which show similar signal with the Bollinger Bands contraction, like Sime, Redtone, and Gpacket.
Conclusion:
Both the Year-end Window Dressing and the Chinese New Year rally are a kind of statistic, and the statistic shows a good chance of positive performance with the above mentioned effects. Nevertheless, the result of the Year-end Window Dressing or the Chinese New Year Rally will be affected by conditions and the market sentiment at that time. Therefore, it is still wise to always lay out a sound trading plan in trading and to pick stock carefully, because not every counter rally during the Window Dressing or the Chinese New Year rally.
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