With MACD still in negative territory and ADX showing no sign of strength, the best we can hope for is a break above R1-R1 and a test of RR. A breakout above RR will have to wait.
Chart 1; FBMKLCI's weekly chart as at Mar 2, 2016 (Source: ShareInvestor)
The above conservative technical reading is consistent with similar reading from FBM70. FBM70 is still below its long-term downtrend line, RR at 13000. While MACD is marginally above the zero line, the ADX shows no strength.
Chart 2; FBM70's weekly chart as at Mar 2, 2016 (Source: ShareInvestor)
Conclusion
Based on the analysis of FBMKLCI & FBM70, it looks like the market will soon reach a strong resistance level. Unless there is a break through, the market is likely to correct and consolidate its recent gain.
4 comments:
Hi Alex,
What do you think of WTK?
Hi Ming Hoong Law
Weak MYR has benefited most exporters and WTK is no exception. However the benefit had been minimal; thus the play on WTK came rather late. With USD-MYR poised to go lower, the rally for WTK - like TaAnn's rally - had lost its momentum. It will try to find some support at RM1.20 but the string support is at RM1.00.
It is advisable to sell into any rally unless the MYR weakened again.
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