Friday, November 23, 2012

Market Outlook as at November 23, 2012

In the past 2 days, FBMKLCI & FBMEmas have both broken below their uptrend line; transitioning to either a sideway movement or even a downtrend. The drop in these indices are due to correction among the blue chip stocks which led these indices higher over the past one year. See Chart 1 & 2 below.

Chart 1: FBMKLCI's daily chart as at Nov 23, 2012_10.15am (Source: Quickcharts)

Chart 2: FBMEmas's daily chart as at Nov 23, 2012_10.15am (Source: Quickcharts)

The second liners, as reflected in FBM70 index, have been consolidating since February. FBM70's upside has been capped by the 'horizontal' line at  12500 while its downside was well-supported by the rising line (currently at 12000). Since they didn't rise much in the past few months, they don't have to fall too much now.

Chart 3: FBM70's daily chart as at Nov 23, 2012_10.15am (Source: Quickcharts)

Further drop in the price of blue chip stocks could worsen the poor sentiment and trigger sell-off among the second liners. If the market continues to slide, we could see a test of its long-term uptrend line at 1510 (see Chart 4). Let's hope that won't happen as time soon.

Chart 4: FBMKLCI's weekly chart as at Nov 23, 2012_10.15am (Source: Quickcharts)

1 comment:

Mat Cendana said...

It's not been a good week for BSKL investors. Even the quality counters have been going lower and lower.

Many people may feel that Digi was still rather pricey after falling below 5.00. But when it shed another 13 sen yesterday, they are still surprised because it was expected bargain hunters would come in to push it up again. But this didn't happen. At present, investors are obviously on the sidelines.

Prices, however, have become more attractive than they were a few weeks ago. After this week's correction, I feel we might see a slight rebound. The window-dressing period is just around the corner - maybe this is the time for buying a few selected counters?