Tuesday, November 01, 2011

Market Outlook as at November 1, 2011

Our FBMKLCI index is likely to be tracing out the 3-fan uptrend line. If so, it could be testing its 2nd fan-line where the support is at 1475. A break below that level could see the index dropping further to the potential 3rd fan-line where the support will be at 1450. I hope that the index can find support at the 3rd fan-line and stage a recovery. If the 3rd fan-line has been established, this line will be a critical support for the market. The breakdown of the 3rd fan-line shall mark the end of the short-term uptrend.


Chart 1: FBMKLCI's 60-min chart as at Nov 1, 2011_4.40pm (Source: Quickcharts)

For the past few weeks, I found it very difficult to be too excited about the market because I am still worried that this rally is nothing more than a bear rally. From the monthly chart below, we can see that market outlook has not changed & it remained negative as at October 31.


Chart 2: FBMKLCI's monthly chart as at Nov 1, 2011_4.40pm (Source: Quickcharts)

Based on this long-term bearish outlook, we should remain cautious in the market despite recent positive news (of the setting up of the EFSF in Europe & positive economic data from the US).
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2 comments:

  1. AnonymousTuesday, November 01, 2011 5:11:00 PM

    Hi Alex

    Can you comment on Oldtown? stock trading below its IPO of RM 1.25 closed at 1.06 today.

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  2. Alex LuWednesday, November 09, 2011 4:25:00 PM

    Hi hng

    Oldtown is trading sideway, with "horizontal" resistance at RM1.15. However, it is also in a short-term uptrend line with support at RM1.00. This means that the stock should hold at RM1.00 & if there is more upside move, it may test the RM1.15 resistance.

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