Monday, June 29, 2020

Market Outlook as at June 29, 2020

Last week, FBMKLCI closed just a tad below its uptrend line. This - together with the a convincing breakdown of the uptrend line for FBM70 - will likely point to further weakness ahead for our market for this week.

Chart 1: FBMKLCI's daily chart as at June 26, 2020 (Source:

Chart 2: FBM70's daily chart as at June 26, 2020 (Source:

2nd & 3rd liner stocks are likely to have drop only slightly, as shown by the sideways movement of FBMSCAP. Then again, these stocks did not raise sharply, except for a selective few and the chart is showing a pattern that looks like a rounding top. If this index were to break down below 11500, the decline will likely be more broad based. 

Chart 3: FBMSCAP's daily chart as at June 26, 2020 (Source:

If you looked through all the indices of the various sectors on Bursa Malaysia, the ones that stood out are the health and technology sectors. The health sector has benefited from the huge rally for glove stocks and "pandemic" stocks while technology stocks have rallied due to the rally for e-commerce and related stocks. One surprising sector that has managed to keep its uptrend line in tact is plantation sector. See the charts below.

Chart 4: BM Health's daily chart as at June 26, 2020 (Source:

Chart 5: BM Technology's daily chart as at June 26, 2020 (Source:

Chart 6: BM Plantation's daily chart as at June 26, 2020 (Source:

For the next few days, you can expect the broad market to be weak and trading to be choppy. 

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