Market Outlook as at October 30, 2020

Last Friday, FBMKLCI broke below the support from the horizontal line, AB at 1480. If FBMKLCI does not recover quickly over the next 1-2 day(s), it may continue to slide to the next support at the horizontal line, XY at 1415.

Chart 1: FBMKLCI's daily chart as at Oct 30, 2020 (Source: Malaysiastock.biz)

If we are concerned that the fall in FBMKLCI may be caused by month-end closing shenanigans, then you can take a look at FBMEMAS (below). That index has not broken the line, AB connecting the 2 recent troughs. If FBMEMAS were to break below the AB line at 10600, then it may continue to slide down to the next support at the horizontal line, XY at 9860. 

Chart 2: FBMEMASs daily chart as at Oct 30, 2020 (Source: Malaysiastock.biz)

The non-confirmation from FBMEMAS does not take away from the current precariousness of our stock market. Below are the state of the various sectoral indices in our market:

Sectoral indices that are in a downtrend:

• Transportation: https://www.tradingview.com/x/hkVLUTqT
• Telecommunication: https://www.tradingview.com/x/EROQ1PAr
• Property: https://www.tradingview.com/x/WaJMd5Hf
• Financial Services: https://www.tradingview.com/x/dQ5CuMKL
• Construction: https://www.tradingview.com/x/uetgG9Dj
• Energy: https://www.tradingview.com/x/bJGJmkfi

Sectoral indices that have started their downtrend:

• Plantation: https://www.tradingview.com/x/XfSWq2ry
• Consumer prod: https://www.tradingview.com/x/QHNGkusy

Sectoral index that has peaked:

• Industrial Prod: https://www.tradingview.com/x/rfA5IX8b

Sectoral indices that are still in an uptrend:

• Health care: https://www.tradingview.com/x/iVBlmfhm
• Technology: https://www.tradingview.com/x/XCViBOJb

 Based on the above, we have to be very careful in taking large position in the market.