Covid-19 has induced a market meltdown throughout the world. To add to the state of confusion & fear, the Saudi decided to bring on the collapse of crude oil prices over the weekend. The net result was a free fall in equity market worldwide. I have appended below a small samples of some of the important markets to watch, namely DJIA, Nikkei and Hang Seng. You can see that these indices are approaching important support zones, and if sanity were to prevail - and the fear & confusion subside - over the next few days, then we may have a baseline to work with. I don't expect a quick recovery from this base because we have to deal with the secondary impact from Covid-19 which may take a few months to show result. If you want to see the road ahead, look to China; They were the first to be hit and they are only now beginning to stage a tepid recovery from that epidemic.
Chart 1: DJIA's weekly chart as at Mar 9, 2020 (Source: Stockcharts.com)
Chart 2: Nikk 225's weekly chart as at Mar 9, 2020 (Source: Stockcharts.com)
Chart 3: HSi's weekly chart as at Mar 9, 2020 (Source: Stockcharts.com)
Meanwhile in Malaysia, we have an additional problem of political uncertainty. The good news is the cabinet announced yesterday was sensible and uncontroversial. Hopefully, this will be the
The monthly chart for FBMKLCI below shows that we are very close to the long-term uptrend line, SS support at 1400-1425. If this uptrend line can hold, then this will be the base for our recovery from the carnage of the past few months. Good luck!
Chart 4: FBMKLCI's monthly chart as at Mar 9, 2020 (Source: Malaysiastock.biz)
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