Market Outlook as at September 30, 2014

Over the past 3-4 weeks, our market has dropped to the long-term uptrend line. From Chart 1, we can see that the support of that uptrend line is at 1850. We had broken below that line and we need to recover above it quickly.

Despite recent weakness among 2nd & 3rd liner stocks, FBMFLG, FBMSCAP & FBMACE are still in an uptrend line.


 Chart 1: FBMKLCI's weekly chart as at Sep 30, 2014 (Source: BTX)

The decline in our market mirrors similar drop in oversea markets. With the exception of DAX, most market indices are still in a long-term uptrend.


 Chart 2: STI's weekly chart as at Sep 30, 2014 (Source: Stockcharts)


 Chart 3: HSI's weekly chart as at Sep 30, 2014 (Source: Stockcharts)


 Chart 4: CAC's weekly chart as at Sep 30, 2014 (Source: Stockcharts)


 Chart 5: FTSEs weekly chart as at Sep 30, 2014 (Source: Stockcharts)


 Chart 6: NASDAQ's weekly chart as at Sep 30, 2014 (Source: Stockcharts)


 Chart 7: S&P500's weekly chart as at Sep 30, 2014 (Source: Stockcharts)


 Chart 8: DAX's weekly chart as at Sep 30, 2014 (Source: Stockcharts)

Despite the poor market sentiment, the technical outlook is still cautiously bullish. The decline in share prices should be viewed as a correction unless the uptrend lines are violated. Having said that, we should always exercise caution since this rally is already 5 years old. There are many investors sitting on large handsome gain and they would hesitate to sell to capture their profit.