Market Outlook as at February 6, 2013

FBMKLCI is testing the important psychological 1600 mark. This level is also the support of the uptrend line, S-S2. If the index breaks below this critical support, it may see a drop similar to July 2011 with FBMKLCI possibly traveling down as far as the rising "horizontal" line AB, presently at 1400.


Chart 1: FBMKLCI's weekly chart as at February 6, 2013 (Source: Quickcharts)

The same pattern is seen in the FBMEmas chart. Here the index has marginally broken below the important psychological 11000 mark which happens to be the uptrend line, S-S2. If there is no recovery in FBMEmas, this index may travel down to test the rising "horizontal" line, AB at 10000.


Chart 1: FBMEmas's weekly chart as at February 6, 2013 (Source: Quickcharts)


This is a critical juncture in the market, which has been weighed down by the fear of an impending General Election and aggravated by the upcoming 2-day break for the Chinese New Year. Can the FBMKLCI stay above the 1600 (or the FBMEmas stays above the 11000 mark? To paraphrase Thomas Paine, these are the days that try the investors' souls (for the original article, go here or here).