Monday, July 29, 2013

Market Outlook as at July 29, 2013

FBMKLCI dropped 7 points to 1800 as at 11.55am this morning. Any further decline will push the FBMKLCI below the 1800 psychological level. This could bring forth more selling and profit-taking. If we look at all the four charts below- FBMKLCI, FBM70, FBMScap & FBMFLG- one thing will become very clear. The four indices have been rising while the MACD & RSI indicators have shown a negatice divergence. This could signal a temporary top in the market. If that scenario panned out, the market might pull back to test the medium-term uptrend line, SS in all four indices. If these medium-term uptrend lines are violated, the indices could correct to the next support levels at 1700 and 1600.

So, it is critical that we watch the indices closely for the next few sessions. A break of the immediate support (example: FBMKLCI violating the 1800 psychological level) could send the market into a significant correction.

Chart 1: FBMKLCI's daily chart as at July 29, 2013_11.55am (Source: Quickcharts)

Chart 2: FBM70's daily chart as at July 29, 2013_11.55am (Source: Quickcharts)

Chart 3: FBMScap's daily chart as at July 29, 2013_11.55am (Source: Quickcharts)

Chart 4: FBMFLG's daily chart as at July 29, 2013_11.55am (Source: Quickcharts)


lai said...

another 40 points drop in the making??

OS said...

hi alex what do u think of ajiya berhad?

Alex Lu said...


Ajiya has been consolidating for the past 3 1/2 years in a saucer formation. It broke above that formation at RM2.00-2.05 in early July. Technically speaking, this stock is bullish (with support at RM2.00-2.05).

Its financial performance has been drifting lower since QE31/8/2009. the reason is margin compression. Its main businesses are roofing and safety glass.

Valuation is not demanding with PE at 8 times and PB at 0.6 time.

All in all, Ajiya is a fairly attractive stock with deteriorating financial performance but it has positive/bullish technical outlook. For that, it is worth close tracking for now.

OS said...

Thanks Alex for the comments on ajiya.
Recent quarter the profit seems quite good..