Market Outlook as at August 9, 2011

This is the crazy season again. Investors are throwing shares out the window regardless of prices. I personally feel that you may get better prices later instead off rushing to sell in this mad stampede.

I have appended below two charts of our FBM-KLCI. From Chart 1, we can see the horizontal support levels are at 1475, 1435, 1400 & 1350. From Chart 2, we can see that a 25%-retracement would set the market back to 1400 while a 38.2%-retracement would push us back to 1300. In the last bear market, the FBM-KLCI broke the 1350 strong horizontal support and the big drop set in. For the current market, if we break 1475, the big drop would set in too.


Chart 1: FBM-KLCI's weekly chart as at Aug 8, 2011 (Source: Quickcharts)



Chart 2: FBM-KLCI's weekly chart as at Aug 8, 2011 (overlaid with Fibonacci retracement level) (Source: Quickcharts)