Straits Times Index (STI IND)
Moving within a triangle pattern
The recent attempt for the FSSTI index to penetrate above the cloud resistance has failed. The index has been moving within a triangle pattern and is now moving lower to test its lower rising trendline support at around 3,110. It has moved below the cloud and both the conversion and base lines, pointing to a bearish index outlook. The momentum indicator, the MACD, is also trading below its zero line, confirming the negative outlook. A bearish MACD crossover is likely in the coming weeks, hinting at a possible downward movement ahead. Watch out for the reaction at the lower trendline support. The index could continue moving within this triangle pattern if it can find support at the rising trendline. Otherwise, a break of the rising trendline could accelerate the downward movement of the index.
Investors could slowly accumulate if the index can sustain at the rising trendline. Otherwise, investors should look to sell if the index breaks below the rising trendline.
Support: 3,040 / 2,955
Resistance: 3,285 / 3,340
Wong Shueh Ting, CFTe
FTSE Bursa Malaysia
Kuala Lumpur Composite Index (FBMKLCI
Failed to break the trend line, downward continues
Based on the weekly chart, the FBMKLCI has failed to break the downward trend line and continues to form lower highs and lower lows which indicate a bearish trend. This bearish momentum is supported by the downtick in RSI and bearish crossovers in both MACD and DMI indicators. These indicate that selling momentum has started to overcome the buying momentum again. Moving forward, we expect another round of bearish trend if the previous low of 1,548 is violated.
Investors can slowly accumulate even if the index goes down. If the index does not fall below the previous low of 1,548, speculators can make a call, and start to take profit when the index starts to penetrate above the psychological level of 1,600 in the short to medium term.
Support: 1,548 / 1,503
Resistance: 1,594 / 1,610
Mohd Fakhrul Asyraq Bin Mohd Aluwi, MSTA, CFTe
Hang Seng Index (HSI IND)
The index posted a false breakout of the 50-week (blue line) moving average and is consolidating. Currently, the index is moving between a bearish trendline (formed since Feb 18) and the 250-week (purple line) moving average. The weekly indicators are mixed. The weekly RSI is below its neutrality level at 50% and lacks momentum. The MACD has crossed above its signal line but is still below its 0-level and lacks upward momentum.
Hence, as long as the 250-week moving average (around 25,694) is not broken, the index is likely to continue its range and challenge the 50-week moving average (around 27,577) again. A break above 27,577 would call for a further advance towards 28,588. Alternatively, a downward breakout below 250-week MA (around 25,694) would call for a further drop towards 24,541 (2018’s low).
Investors are recommended to accumulate stocks now and use 250-week MA (around 25,694) to control risk.
Support: 25,694 (250-week MA), 24,541 (2018 low)
Resistance: 27,577 (50-week MA), 28,588 (bearish trendline since Feb 18)
Joyce Chan, CMT
Stock Exchange Composite Index (JCI
Strong December seasonality
The JCI is looking for a rebound in December after it slid quite significantly in November. In the last 18 years, the JCI has never closed in the red in the month of December, indicating a strong and positive seasonal pattern. The JCI has also been holding well above the 6,000 level and indicators are showing early signs of recovery at beginning of the month. Sentiments from global market are looking positive with a potential phase one trade deal arising soon between the US and China, while domestic sentiments are improving after President Jokowi announced his new Cabinet while Bank Indonesia have lowered its 7day-reverse repo rate four times this year. Technical outlook has been showing signs of improvement since the beginning of the month with the JCI making a rebound by forming a long-body bullish candlestick last week. Looking forward, we expect the JCI to make a rebound and rally to challenge the resistance level at 6,170 and even 6,275. The support of 6150 should be able to hold the index for any selling pressure.
Sentiments and technical signals are starting to improve; hence, investors should bargain hunt with focus on sectors such as banking, consumer and construction.
Support: 6,150 / 6,000
Resistance: 6,350 / 6,470
Maskun Ramli, CFTe
Exchange Of Thailand Index (SET IND)
Falling to test key support level
The SET Index has declined to below the neckline of a “head-and-shoulder” pattern at 1,600, which has made sentiment bearish. The short-term outlook has become more negative as the index has continued to fall. A breach of the key support level in the medium term (1,540-1,550) will bring more bearish sentiment and more downside for the medium run (next 3-5 months).
The SET Index’s fall to the medium-term support might be a turning point or the beginning of a medium-term downtrend. If it is unable to hold onto 1,540-1,550, the downside for the correction would be at least 1,420-1,450. Investors should pay more attention to current support testing. We recommend reducing exposure/positions if the index breaches the support.
Support: 1,550 / 1,546
Resistance: 1,580 / 1,620