This afternoon, the Malaysian government announced support amounting to RM10 billion for the small & medium-sized enterprises, which would be badly hit by the Covid-19 outbreak. This is the second good news for the day.
The first good news was a smaller increase in total cases and total death for April 5- which could mark a temporary peak for Covid-19 cases & death.
Chart 1: Daily increase in total cases and death from Covid-19
With the positive developments, our market may continue to recover. If the index can surpass the 1350-1353 level, we might attempt to climb back above the long-term uptrend line at 1400-1405. At this point, I doubt the index can climb above this resistance as the Covid-19 outbreak and its economic impact are just beginning to be felt. Based on these concerns, I think we should remain cautious in our investment plan.
Chart 2: FBMKLCI's daily chart as at April 6, 2020 (Source: Malaysiastock.biz)
Chart 3: FBMKLCI's monthly chart as at April 6, 2020 (Source: Malaysiastock.biz)
(UPDATE) Overnight, US markets rallied with DJIA rising 1628 points (or, 7.7%) to 22680 and Nasdaq rising 540 points (or, 7.3%) to 7913. The good point to note is that yesterday's market highs & closes for DJIA and Nasdaq were both higher than what were recorded on March 26. This is a sign of a tentative short-term uptrend move, where you have a higher "low" (or, trough) earlier and now you have a higher "high" (or, peak). The higher "low" was on April 1-3 as compared to previous low on March 18-23, while the higher "high" was made yesterday as compared to previous high on March 26. While this means that the rally may have
Chart 4: DJIA's daily chart as at April 6, 2020 (Source: Stockcharts.com)
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