Monday, May 07, 2012
Market Outlook as at May 7, 2012
Politics dominated the news over the weekend. With incumbency losing power or influence in France & Greece (here & here), the Eurozone sovereign debts problem is again back in the forefront. The rhetoric across Europe speaks more & more for the need to generate growth instead of the austerity measures championed by the German. In addition, we have to contain with the poorer-than-expected employment report in US (here & here). These two factors are likely to have negative impact all equity markets, including ours.
From the daily chart below, we can see that FBMKLCI is still in a medium-term line, with resistance at 1594-1595. Given the negative factors as mentioned above, the current rally will probably not attempt to test this downtrend line soon. The immediate support for the index will be the horizontal line at 1590 & then at 1565.
Chart: FBMKLCI's daily chart as at May 4, 2012 (Source: Quickcharts)