Market Outlook as at January 16, 2008

After my last call on the market, I am very reluctant to post anything on market outlook. Nevertheless, let me just make one quick observation. I believe that the KLCI may find support at the following horizontal supports of 1450, 1420 & 1380. The immediate uptrend line support is at 1420.


Chart: KLCI's daily chart as at January 15 (courtesy of Quickcharts)

I have looked through almost all the major indices. Except for Nikkei 225, all these indices are still above their respective medium- and long-term uptrend line supports. Nevertheless, most of these indices are showing patterns of potential reversal and, given the sharp run-up in equity price over the last 2 to 3 years, the fear is now gripping everybody in the market.

After today's sharp drop, the market will take a while to recuperate. With that, the cautiously bullish outlook of my last market call can be consigned to the back burner.