Thursday, October 20, 2011

Market Outlook as at October 20, 2011

FBMKLCI broke the short-term uptrend line (SS) at 1440 today. It found support against the earlier-overcome downtrend line (RR) at 1430. With the breakdown of the short-term uptrend line, the market is likely to move into a range-bound sideway market as envisaged in my last Market Outlook. In that post, I opined that the trading range could be between 1435 & 1480. We can see that the market has already traded at a level lower than my earlier forecast.

For those who are holding large position in the market, you should consider reducing your position with the breakdown of the short-term uptrend line. Those waiting to buy should wait & see whether the market can recruit buying support. If the index were to drop too sharply (say below 1400), you should stand aside and let the market find its level. Over the past few days, there are tentative signs that trade in risk assets is running into trouble. Would there be another flight to safety? Let's wait & see.


Chart: FBMKLCI's daily chart as at Oct 20, 2011_12.10pm (Source: Quickcharts)
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2 comments:

  1. IvanThursday, October 20, 2011 5:24:00 PM

    MACD, RSI, DMI indicates the mkt more donwside toward, right?

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  2. Alex LuFriday, October 21, 2011 2:35:00 PM

    Hi Ivan,

    The indicators on the daily chart are not so clear. On intra-day chart (say 60-min chart), the signals are clearer that the market will likely to move sideway. The immediate horizontal support is at 1430 & then at 1400-1405.

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