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Wednesday, April 11, 2018

Market Outlook as at April 11, 2018

Yesterday our market - along with many regional Asian markets - had a good rally. That rally could be just an oversold rally or it can be more than that. The fact that it came after the Chinese President Xi's speech about lowering of tariff on certain import has certainly took the wind out the sail of the trade warmongers in Washington.

Xi's speech must have been music to the ears in Wall Street as investors jumped into stocks and pushed DJIA up 429 points last night. This goes to show that the strong support at the 23500 mark -  from the uptrend line and the 200-day SMA line - can hold up the market. However, we must note that DJIA has a strong resistance at 24750 mark - from the medium-term downtrend line as well as the 50 & 100-day SMA lines. Thus, DJIA is likely to be trapped between these two levels - 23500 & 24750 - for next few days or weeks.


Chart 1: DJIA's daily chart as at April 10, 2018 (Source: Stockchart.com)

Our market is likely to see further recovery for the 2nd and 3rd liner stocks next few weeks. I don't expect blue chip stocks to move up much as FBMKLCI is less than 20 points away from the recent high of 1880.


Chart 2: FBMKLCI's daily chart as at April 10, 2018 (Source: Shareinvestor.com)


Chart 3: FBM70's daily chart as at April 10, 2018 (Source: Shareinvestor.com)

 
 Chart 4: FBMSCAP's daily chart as at April 10, 2018 (Source: Shareinvestor.com)

The 4 sectors that had dropped sharply are Properties, Construction, Technology and Trading Services. Properties and Construction indices are above their immediate downtrend lines while Technology and Trading Services indices are still testing their downtrend lines.


Chart 5: Properties & Construction's daily chart as at April 10, 2018 (Source: Shareinvestor.com)


Chart 6: Technology & Tradserv's daily chart as at April 10, 2018 (Source: Shareinvestor.com)

I like selective stocks from the Properties, Construction & Gaming sectors as well as a few other stocks like Astro, BAT & LAFMSIA. Good luck!

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