Market Outlook as at October 29, 2015

FBMKLCI has once again dropped below the neckline of the head and shoulders top at 1680. On October 7, we had noted that the index managed to climb back above the neckline (for the chart, go here). That earlier recovery (above the neckline) meant that the prior interpretation of a market that had made a top was in doubt. However, with the index once again trading below the neckline, the interpretation that the market has made a top reassert itself.


Chart 1: FBMKLCI's weekly chart as at October 29, 2015_9.50am (Source: ShareInvestor.com)

For long-term charts on FBMKLCI & FBMEmas, look at Chart 2 & 3.


Chart 2: FBMKLCI's monthly chart as at October 29, 2015_9.50am (Source: ShareInvestor.com)


Chart 3: FBMEmas's monthly chart as at October 29, 2015_9.50am (Source: ShareInvestor.com)

If the two indices do not recover above their respective neckline in the next 1-2 day(s), the negative interpretation would return, i.e. the market has made a top and will likely to continue to drift lower in the weeks and months ahead. Thus, it is important that we watch the market closely and take the necessary corrective action to adjust for the latest market outlook.