Advertisement

Monday, December 14, 2015

Market Outlook as at December 14, 2015

Running through the various charts for our local market, we can see that the corrective rebound off the low in August is over. The downtrend is likely to continue and this may send the market back to the August low.


Chart 1: FBMKLCI's weekly chart as at Dec 14, 2015_10.00am (Source: ShareInvestor.com)


Chart 2: FBM70's weekly chart as at Dec 14, 2015_10.00am (Source: ShareInvestor.com)


Chart 3: FBMSCAP's weekly chart as at Dec 14, 2015_10.00am (Source: ShareInvestor.com)


Chart 4: FBMACE's weekly chart as at Dec 14, 2015_10.00am (Source: ShareInvestor.com)


Chart 5: FBMFLG's weekly chart as at Dec 14, 2015_10.00am (Source: ShareInvestor.com)

Looking at  the monthly chart, I believe that FBMKLCI will have a very strong support at 1540-1550, the middle line of the upward channel (B-B1). 
 

Chart 6: FBMKLCI's monthly chart as at Dec 14, 2015_12.30pm (Source: ShareInvestor.com) 

US stock markets are at a critical juncture this week. Two of the main market barometers, DJIA & Nasdaq are set to test their respective uptrend line. If S&P500 is a guide, these 2 indices are likely to break below their uptrend line and set the stage to revisit their August low.


Chart 7: DJIA, Nasdaq & S&P500's daily chart as at Dec 14, 2015_10.00am (Source: Stockcharts) 

In Europe, the 3 main stock barometers (FTSE, DAX & CAC) have broken their intermediate uptrend line and are set to revisit their August low.

 
Chart 8: FTSE, DAX & CAC's daily chart as at Dec 14, 2015_10.00am (Source: Stockcharts) 

In Asian, HK and Singapore markets continue to drift down. Nikkei is likely to join them after breaking below its intermediate uptrend line last week.


Chart 9: HSI, STI & Nikkei's daily chart as at Dec 14, 2015_10.00am (Source: Stockcharts) 

All in all, the stock markets worldwide are looking rather gloomy. This will add to the continued weak sentiment in Malaysia.

2 comments:

steve said...

Is this representing the fear factor before fed's rate announcement? Investors usually sell first think later. Fundamentally, i do think fed's action (if it happens) is positive for world market in the long run. However, it's difficult to see how long this fear factor can haunt the market.

Thanks for sharing. 1550 for klci seems like a good line to wait and see, where for sp500 i will wait for 1905. However, I have a feeling that it may not drop to that strong support. Only time will tell. :)

Alex Lu said...

Hi steve,

I believe the majority of market players have adjusted their position to take into account Fed's rate hike. After all, markets have been up for a period of 5-6 years and many investors are sitting on good profit.

The story of 2015 is the story of the dichotomy between the carnage in the commodity and basic metal markets versus the relative strength in financial markets. It illustrates the divergence between the Main Street & the Wall Street, and the reason for the latter is ample liquidity and the former is again ample liquidity leading to malinvestment.

At some points, some will have to give. I believe that Fed is going ahead with this interest rate adjustment mindful of the danger out there.On balance, Fed may feel that it is better to act now than when it's too late. Of course the net result could well be Japanization of the US economy for the next few years. Given a choice, Japanization is a lot better than another Great Recession!