FBMKLCI broke below the psychological 1700 mark yesterday. Its next support is at 1670 from the line connecting the low for the past 3 years. See the weekly chart.
Chart 1: FBMKLCI's weekly chart as at Oct 23, 2018 (Source: Malaysiastock.biz)
The support at 1670 is a very strong support. If you look at the monthly chart below, you will see that the index has been moving in an upward channel in the past 20 years. We are now coming down to the middle line of that channel, which I denote as S1-S1. It is critical that the index stays above this line. A breakdown may occur if global or regional markets or economy were to take a big fall. For now, I don't see a problem that's serious enough to cause these markets to plunge; thus bringing our index below 1670. I hope I won't be proven wrong on this.
Chart 2: FBMKLCI's monthly chart as at Oct 23, 2018 (Source: Malaysiastock.biz)
Based on the above, our market will likely find support in the next few days. Nevertheless it is hard to sound bullish in this dreary market that has brought prices for many stocks down to unimaginable levels. It takes a lot to make a BUY call these days. My thought goes out to everyone who is still in the market, and who has faith that the market will turn a corner some day in a not-too distance future. Good luck to everyone! Stay strong! Stay safe!
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