Market Outlook as at August 13, 2015

Market is rebounding. FBMKLCI found support near 1600 and is now at 1625 (up 16 points). To override the Head-and-Shoulder reversal, FBMKLCI must climb back above the neckline at 1680. The odd is stacked against this effort. The technical indicators are weak and the 10-month SMA line has cut below the 20-month EMA as well as nearly cutting below the 30-month EMA line. As noted in earlier post, when we saw this moving average crossovers in the past (1997 & 2008), the market had entered into bear market. To make this herculean task more difficult, we have two ingredients that tend to roil any market: currency turmoil and political uncertainty. With that, I believe the appropriate strategy would be to reduce one's position as the prices crawl up.Good luck!


Chart: FBMKLCI's monthly chart as at Aug 13, 2015_10.45am (Source: ShareInvestor.com)