Outlook: The FSSTI index has rebounded from the low in Mar 20 but the outlook is still negative as it is still trading below the cloud. It nearly hit the pennant target (around 2,950) after breaking out of the pennant pattern since May 20, but the base line (blue line) has resisted the index’s rally. In terms of momentum indicators, the RSI is rising towards its neutral level, and there is a bullish MACD crossover. As long as the low of 2,490 is not violated, we could see the index forming higher highs and higher lows, and testing the gap resistance at 2,960.
Strategy: Investors could accumulate, buy on dips and sell on rally when the index moves towards the gap resistance at 2,960. Support: 2,570 / 2,490 Resistance: 2,890 / 2,960
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
In our previous posting on the STI, we give two reasons why the STI is not bullish. Over the past 2 weeks since that post, the STI has been moving sideways. Today price moved below the cloud and closed below the cloud as well. This could be the start of a downtrend. Where can the STI drop to?
From the low of 2209 to the high of 2671 on 17 April, the 38% Fibonacci correction comes in at 2495. The 50% is at 2441 while the 62% comes in at 2386. The decline can come down to any of these 3 numbers but should not moves below the 62% at 2386 or the uptrend would be in danger. If it drops below 2486, it is likely to go as low as 2206.
MACD is turning down with a bearish crossover. However, the histogram on the MACD does not look strong. As a result, we are not expecting a strong bearish trend but rather a corrective decline after a 20% rally. We hope the Fibonacci 38% can halt the decline but mostly likely it should go down to the 50% correction point at 2441.
Our short term bearish view will wrong if the index move above 2730.
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
In our update last month, we were bearish on the STI. Today, we are still bearish on the STI. Price has declined below the previous low and there is a high chance that the index will continue to decline further. The index could decline further to 2955 before there is a reversal.
Both Base and Conversion lines are bearish and their slope are steep. This is a hint of a strong bearish trend. Lagging Span confirms the bearish trend. Lagging Span is below price of 26 periods ago as well as below the cloud. MACD is bearish with both its lines below the zero line. MACD is pointing down, further hinting of more decline. However, if MACD is able to avoid moving below the momentum low in late Aug 2019, there is likely to be a bullish divergence and could be a hint of a possible index bottom.
On the monthly chart, this index has also fallen below its big Triangle chart pattern. This is a sign of more decline for the index. Usually a triangle is the consolidation before the last movement. So the current decline from the monthly chart’s Triangle pattern could be the last decline.
We remains bearish until a reversal signal is seen.
