FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBMKLCI IND) Entering sideways market
Outlook: Based on the weekly candlestick formation, despite follow through selling pressure, the FBMKLCI has pared down earlier losses as buying interest, potentially from institutional funds, kept absorbing selling pressure as the index remained between 1,535-1,618. The index tried to penetrate the Ichimoku cloud but selling pressure still overcame buying pressure as shown in the negative RSI reading. Moving forward, we expect more sideways movements ahead. However, a failure to surge higher should place the index in consolidation thereafter.
Strategy: Given the uncertainties on the internal and external fronts, we recommend investors approach the market cautiously. Profit-taking activity may kick in sooner amid the recent gains. Support: 1,506/ 1,500 Resistance: 1,618 / 1,640 Analyst Mohd Fakhrul Asyraq Bin Mohd Aluwi, MSTA, CFTe
Outlook: Based on the weekly chart, the FBMKLCI continues to form higher highs and higher lows that indicate an uptrend. The index penetrated the downtrend line to close higher at 1,576.90 on Monday. This bullish movement is supported by an uptick in the RSI. Stronger movements can be expected ahead in tandem with increasing buying pressure as shown by a bullish crossover in the MACD and DMI. We expect the FBMKLCI to continue to move towards the psychological resistance of 1,600 in the near term.
Strategy: Given that regional markets are back in positive territory, we expect the positive sentiment to spill over to the FBMKLCI. In the short to medium term, we maintain our bullish view as long as the FBMKLCI remains above the psychological 1,500 level and the uptrend lines. Support: 1,500/ 1,555 Resistance: 1,600 / 1,617
Analyst Mohd Fakhrul Asyraq Bin Mohd Aluwi, MSTA, CFTe
Outlook: The FSSTI index is in a bearish trend as it is trading below the cloud. However, it is currently in a correction mode, rebounding from the base low at 2,208. The FSSTI index just broke out from a continuation pattern of the pennant chart pattern, and we are likely to see the index continuing its rebound towards the chart pattern target of 2,960 (which also coincides with the gap resistance). The RSI is rising above its neutral level and there is a bullish MACD crossover. Both momentum indicators could suggest potential upside in the near term. Strategy: Investors could sell on rally towards the chart pattern target at 2,960 as the overall trend is still bearish. Support: 2,750 / 2,490 Resistance: 2,960 / 3,090 Analyst Wong Shueh Ting, CFTe
Outlook The index has rebounded from the long-term bullish trendline (formed since 2008) again and has broken above its previous top at 24,855. The weekly RSI is heading upwards and is challenging its neutral level at 50%. The weekly MACD has just crossed above its signal line, indicating that the Hang Seng Index is likely to see further upside in the medium term. However, the index is now very close to its 250-week moving average (purple line) which had been tested eight times since 2018 before the HSI broke downward in 2020. In addition, the 26,000 level (around the neckline of a former head-and-shoulder pattern) is another resistance level. Based on these, we are neutral but tend to positive. We expect the index to range between support at 23,484 and resistance at 26,000 in the coming weeks. Only a break below the long-term bullish trendline (around 22,519) would turn the outlook to negative. Strategy: Investors are recommended to accumulate stocks during any consolidation and use the long-term bullish trendline (since 2008) to control risk. Support: 23,484 (overlapped level since Mar 20); bullish trendline since 2008 (around 22,519); 21,139 (Mar 20 low) Resistance: 25,679 (250-week moving average; purple line), 26,000 (around neckline of head-and-shoulder pattern). Analyst Joyce Chan, CMT
Outlook: Based on the weekly Ichimoku chart, the FBMKLCI is still trading below the cloud, which indicates a bearish trend. In the short to medium term, the index has started to form higher highs and higher lows, and penetrated the downtrend line to close higher at 1,556.33 last Friday. This is because most of the volumes traded came from retail players who entered the market during the MCO period. The RSI is currently above the 50 line, with bullish crossovers in both the MACD and DMI. Moving forward, we expect the index to continue in its bullish momentum if it penetrates above the Ichimoku cloud and remains above the psychological 1,600 level Strategy: Traders can ride the trend with a short-term target at the 1,600 psychological level, but if the short-term uptrend line is broken, investors may turn short. As such, investors should approach the market cautiously for now. Support: 1,500/ 1,555 Resistance: 1,430 / 1,460 Analyst Mohd Fakhrul Asyraq Bin Mohd Aluwi, MSTA, CFTe
Outlook: The FSSTI index is in a downtrend as it is trading far below the cloud. A bearish conversion and base lines crossover have confirmed this bearish trend as well. However, a corrective rebound had been expected, and we have seen that materialising after the index rebounded from the low formed in Mar 20, which is also near its long-term rising trendline that started in 1998. It is now testing its gap resistance at 2,634. The index has to penetrate above 2,634 for further rally, but the upside could be limited as there is an overhead base line resistance at 2,746. A violation of 2,520 could result in a test of the low again. Strategy: Investors could accumulate when the index penetrates above the gap resistance at 2,634, and sell on rally when the index approaches the base line resistance. Support: 2,525 / 2,380 Resistance: 2,670 / 2,745 Analyst Wong Shueh Ting, CFTe
Outlook: Based on the weekly candlestick analysis, a spinning top pattern was spotted on the chart that indicates indecisive movement from hereon. However, the FBMKLCI movement was still in the range of the immediate support and resistance levels of 1,320 and 1,430 in the last few weeks. The recent sharp drop on intense selling suggests more weakness in the longer term. We expect a minor bounce from here, but any bounce can be seen as a chance to sell on strength since the FBMKLCI still in the bearish mode territory as the index is still below the Ichimoku cloud. Strategy: Due to the potential consolidation ahead, investors and position traders may wish to remain on the sidelines and wait for confirmation. If a new higher high is formed, investors may go long, but if the bullish trend is broken, investors may turn short. Support: 1,320 / 1,300 Resistance: 1,430 / 1,460 Analyst Mohd Fakhrul Asyraq Bin Mohd Aluwi, MSTA, CFTe
Outlook After the index rebounded from the long-term bullish trendline (formed since 2008), it has been ranging for few weeks between 23,484 (overlapped level since Mar 20) and horizontal resistance at 25,134 (overlapped level since 2018 and around 50% Fibonacci retracement level between Jan 20’s top and Mar 20’s low). The weekly indicators are mixed. The 20-week (red line) moving average is below the 50-week (blue line) one and is heading downwards. The daily RSI lacks momentum. However, the weekly MACD is turning up, while the MACD histogram is narrowing. Hence, we are neutral on the index now and expect it to continue ranging between long-term bullish trendline (formed since 2008; around 22,700) and next key resistance around 25,134. In addition, the 250-week (purple line) moving average is also playing a very important resistance role on the upside. Alternatively, only a break below the long-term bullish trendline would turn the outlook to negative. Strategy: Investors are recommended to accumulate stocks during any consolidation and can use the long-term bullish trendline (around 22,700) to control risk. Support: 23,484 (overlapped level since Mar 20), bullish trendline since 2008 (around 22,700), 21,139 (previous low) Resistance: 25,134 (horizontal key resistance since 2018), 25,668 (250-week moving average; purple line), 26,533 (50-week moving average). Analyst Joyce Chan, CMT
Outlook: The FSSTI index continues to move within the triangle pattern, which is a sign of consolidation. It is now trading at the lower trendline support, which is acting as the first layer of support. The index gapped down two weeks ago, creating a price resistance at 3240. Generally, the outlook of the index is bearish as it is trading below the 200-week moving average, and the MACD momentum indicator has turned bearish with both of the MACD lines below the zero line. The RSI is trading near the oversold region, which could raise the odds for a potential short term rebound to test the gap resistance. A break of the lower trendline support of 3,110 would accelerate the downward momentum and hint at further downside at 2,955.
Strategy: Investors could use the lower trendline support as a guideline. Once the index breaks below the trendline, investors could reduce their positions.
Outlook The index has rebounded near its 250-week (purple line) moving average and has broken above the 20-week (red line) moving average. The weekly RSI is supported by a bullish trendline and has just broken above its neutrality level at 50%. The MACD is above its signal line and 0- level. However, the index is still capped by two bearish trendlines since 2018 (red and dark-blue lines). Therefore, we expect the index to range between the previous high (29,175) and the 250-week (purple line) moving average. As long as the 250-week moving average (around 25,772) is not broken, the index is likely to challenge 29,175 (previous top) again. A break above 29,175 would call for a further advance towards 30,280. Alternatively, only a downward breakout below the 250- week moving average would call for a further drop towards 24,540 (2018 low).
Strategy: Investors are recommended to continue to accumulate stocks and use the 250-week MA (around 25,772) to control risk.
Outlook: Based on the weekly chart, the FMBKLCI continued to form a series of lower highs and lower lows which show the continuation of a downtrend pattern. A selling signal has been given as the index is still trading below the Ichimoku cloud. This is supported by the Heat Wave indicators as the Tenkan-sen, Kinjun-sen and Chikao span lines inter-cross, which suggests a bearish signal. Given the lack of domestic catalysts, external factors may have more weightage. Thus, the FBMKLCI may be vulnerable to negative sentiments regionally. In the near term, we expect the index to continue on the downside if it drops and penetrate the psychological support level of 1,500. If the bear continues to control the market, the index will continue to drop till the next support level of 1,493. Strategy: Since the index is still in bearish mode, we suggest investors take the opportunity when the time is right to enter the market.
Support: 1,500 / 1,493 Resistance: 1,570 / 1,600 Analyst Mohd Fakhrul Asyraq Bin Mohd Aluwi, MSTA, CFTe
Outlook: The JCI slid in early-February, continuing the slide from January. The tumble was triggered by fears of the new Coronavirus outbreak which originated from Wuhan – China, spooking domestic investors. The JCI has been forced lower and has broken the psychological support at 6,000; it is now in a bearish trend. That said, although the outlook is not looking good, there are positive sentiments with February seasonality of 7x gains and 3x losses in the past ten years; furthermore, technical indicators such as the RSI are now showing an oversold signal – looking for a temporary rebound. Other positive sentiments are coming from the rupiah which has been strengthening against the dollar and hit a level as low as Rp13,650. Looking forward, we expect a rise in volatility in the month of February with the nearest support at 5,765 and resistance at 6,000.
Strategy: Selective buy in stocks that have solid fundamentals and attractive valuation, especially in sectors such as banking, consumer and property.
Outlook: Overall sentiment for the Thai equity market has become bearish after the SET Index had fallen below 1,550 which is a key support level. As the SET Index has been falling below the neck line (1,550) and moving in a downward channel which indicates that the medium-term outlook has shifted to a downtrend, we have to presume that we would possibly continue in a downward movement or sideways momentum for many months. Also, we have to set up a strategy based on the downward bias.
Strategy: 1,480-1,500 would be a good buying zone, given that this level offers a good risk-to-reward payoff. The 1,500 support is derived from the lower bound channel while the 1,480 support is derived from a trading momentum (“a”) after the SET Index fell below its support (“b”). We recommend investors buy at 1,480-1,500 for short-term trading while investors should consider reducing exposure/positions if the index falls below the 1,480 support.
