Yesterday, FBMKLCI dropped 15 points to close at 1545. The break below 1550 level may lead to an acceleration of the decline in our market. While the index may rebound back above the 1550 mark, the steady flow of negative news has instilled a level of fear among investors and traders, which until recently were driven by unchecked greed. If the market failed to climb back above 1550, then it will quickly slide to the next support at 1520 or the immediate psychological level of 1500.
Chart 1: FBMKLCI's daily chart as at Jun 28, 2021 (Source: Kenanga BTX)
Chart 2: FBMKLCI's weekly chart as at Jun 28, 2021 (Source: Kenanga BTX)
Thus yesterday's announcement by the Prime Minister of a new aid package, known as the National People’s Well-Being and Economic Recovery Package
(PEMULIH) totaling RM150 billion is critical in the effort to help the people & businesses that have been badly hit by the pandemic (here). If this belated aid package can achieve its objectives, then our economy can stabilize and will have a decent chance of recovery once the pandemic has been brought under control. If it failed to do so, then our economic recovery, post the pandemic, will be a Herculean task.
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