Join Dstockmarket's Community - Daily Market Analysis, Individual Stock Analysis.
The Malaysian stock market has been badly battered following political uncertainty and the Coronavirus. Let us chart the KLCI and see where it is likely to go.
The stock market is a reflection of what the economy will be like. Usually it foresees what will happen in about 6 months in the economy of the country.
With the KLCI falling so much because of political uncertainty and the Covid 19 pandemic, things don't look that good for the job sector in the future.
I will be conducting a live webinar on May 4 2020 Monday 8.15 pm Malaysian time or 8.15 am New York time. For those who are interested please go to the Dstockmarket Telegram Chat Group and put your name on the list.
Today the KLCI followed in the footstep of the S&P 500 to move higher.
As it reached resistance which is the previous high area, the KLCI retraced a bit. But its still a good performance today.
Perhaps we need some sideways trading before it can break higher.
Watch the first support area. If KLCI can stay above this area, then it is likely to continue to move higher.
And happy Labor Day to you.
Probably you are not working as we are told to stay at home. But anyway, Happy Labor Day!
The KLCI is about to have a bullish cross where the daily 20 MA (red line) crosses back above the 50 MA (blue line). This can often be a bullish signal.
As long as the green support area holds, and the bullish cross happens, then KLCI might go higher.
KLCI is still in sideways trading mode. Still finding support at the box support and as long as the support holds, there is a chance for it to bounce back up.
Things can be quite frustrating when the index trades sideways but I guess that this is needed. The can often help to absorb the supply from the left.
Hopefully the box support holds and this sets up for another rally back up.
The KLCI has not been very shiny today.
However it is still staying above the daily 20 MA which is the red colour line in the chart above. It is also staying above the box support.
As long as KLCI stays above the 20 MA and also the box support that I have drawn on the chart above, then it is very likely that KLCI may be able to bounce back up.
If it drops below the 20 MA and also the box support, then we might see KLCI drop to 1325.
The KLCI broke below the lows of yesterday and therefore right now we should try and see if a 60 min double bottom is able to form in the chart.
The box area is a support area and thus one should try and see if KLCI can find support there and form a 60 min double bottom.
If a double bottom forms and it breaks above the 60 min downtrend line, then it is very likely that the KLCI will move higher.
On the other hand, if KLCI breaks below the W pattern, then we might have more weaknesses and more correction in the KLCI.
I must say that so far the 60 min box support is still doing its job.
KLCI did not drop that much today.
What we can do is to draw a downtrend line to figure out where KLCI wants to go next. If it breaks above the downtrend line then it is possible for the KLCI to go higher.
On the other hand, if it drops, then you might want to see if a double bottom can form in the 60 min chart.
After making a topping tail in the daily chart and then dropping below the 60 min 20 MA, the KLCI had a correction.
Today it opened lower but the strength of the box consolidation as support help to keep it up.
This is a good area to watch. If KLCI manages to stay above this area, then it is likely to climb higher again.
On the other hand, if KLCI drops below the support 1, then it is likely to fall to the support 2 which is made up of a 60 min ascending triangle.
This will offer quite a lot of support and we should then look to see if it can bounce higher from there.
The KLCI had a nasty red day today. This is thanks to the declining 50 day moving average which acts as a resistance and also the topping tail that was present yesterday.
With the US market also dropping, it is very likely that KLCI is going to drop again tommorow.
The box that I have drawn will be a support area to watch.
If KLCI cannot stay above the box then it could visit the handle support of the KLCI cup with handle pattern.
Last week I think I showed you that the KLCI has met its measured move.
When an index meets its measured move, it is always a good time to be a bit cautious.
The KLCI went up in the morning today but as the afternoon session kicks in, the market reverse and formed what we call a topping tail in the daily chart.
A daily topping tail could be a reversal signal so it is good to be a bit cautious.
The KLCI as you can see from the daily chart above is still in a 60 min uptrend. One should remain mildly bullish unless KLCI drops below the 60 min 20 MA.
It is coming quite close to dropping below it.
If KLCI drops below the 60 min 20 MA, then this could mean more weakness and correction.
The KLCI has moved up quite a lot since the box breakout in the 60 min chart of the KLCI.
If we take the measured move target, the KLCI has more than met the measured move target and one should be a bit realistic and accept that a target has been met.
Since the KLCI is now at the daily 50 MA, there might be some resistance overhead.
The upward move may not be over but it is always wise to expect some resistance or correction or at least some sideways trading when you have a 60 min measured moved target met and the daily chart is at the 50 MA resistance.
The KLCI is still above its rising 60 min 20 MA and 50 MA.
This still tells us to be mildly bullish and one should continue to do so unless the KLCI starts to fall below the 60 min 20 MA.
Hope you had a great week.
I think many many Malaysian stocks had been charging higher these past few weeks and they have really enriched the pockets of traders who were observant.
In the stock market when preparation meets opportunity, then it will really improve your profitability.
Today let us take a step back and have a look at the weekly chart of the KLCI.
This is so that we have a big picture of what is happening in the KLCI.
Well, 4 weeks ago we have a nice weekly bottoming tail. A bottoming tail can often appear when the market bottoms.
When a bottoming tail appears it can also tell us that the market wants to go higher. The trigger is when the market goes back above the highs of the bottoming tail.
That happened 3 weeks ago.
So far, the bottoming tail has been doing its job very well and we are still on our way up.
A good initial target that one can take is the length of the bottoming tail projected upwards from the highs of the bottoming tail. We have yet to reach there but if the 60 min uptrend continues, it is very likely that we will reach the target.
KLCI has broken above the 2 hour trading consolidation box.
This is a positive development and a possible indication of higher prices. But for that to really happen we want to see KLCI continue to stay above the top of the box.
If it can stay above the top of the box, it is very likely it will drift higher. There may be some resistance as it meets the 2 hour 200 MA.
On the other hand, if KLCI drops below the box, then we could see KLCI move lower again.
I think the top of the ascending triangle will act as a support and that is a very important area to watch. As long as the ascending triangle top holds, then most likely KLCI will drift higher.
From a daily chart perspective, the KLCI formed a variation of the cup with handle.
A cup with handle can give us a possible target and the target could be north of 1500 which may surprise many many people.
It has broken above the handle and I think that this area is an important area to watch.
The top of the handle is important. As long as KLCI stays above the top of this pattern then it will slowly go higher. We do not know when or how long it may take but that area will be important.
No matter what happens, as long as KLCI stays above this area, then we could see higher prices in the KLCI.
But of course do remember, if the KLCI drops below the handle, then it will be a pattern failure and the KLCI could go lower and even challenge the previous low.
If the KLCI continues to rise, it may find some resistance at the daily 50 MA. That is something to keep in mind.
The above chart is a 2 hour chart of the KLCI.
So far, it has been able to stay above the top of the ascending triangle. That is something good and perhaps will lead to higher prices in the future.
It has been trading sideways for quite a while after breaking out of the ascending triangle. We can draw a box that contains the sideways trading.
If KLCI can trade above the highs of this box, then it is likely to continue to move higher.
On the other hand, if KLCI breaks below the box, then this may mean weakness and perhaps lower prices.
Today's analysis will be quite unique. Will be a video analysis instead of the usual written word.
I will be looking at the KLCI and then stocks which are Maybank, CIMB, Dayang, Hibiscus, AirAsia, Jaks, Supermax, Minetech, Straits Inter Logistics, Hai O and MagniTech.
If the video is too small, click on the YouTube link on the video to view it on YouTube.
At times it is good to have a look at some major stocks in the KLCI. One of them is Maybank which is a big component in the KLCI.
In early April, the stock broke out of a 2 hour ascending triangle. This could be a trade setup for the eagle eye.
The top of this pattern which is around 7.50 will be a nice support in the event of any correction. So we could also say that the KLCI will also have a cushion of support as long as Maybank stays above the 7.50 area.
I want to draw your attention to the box that I have drawn on the chart.
This can help to give an indication of where KLCI might go as well.
If Maybank can trade above this box, then KLCI is very likely to continue to move higher. If you check back on the previous analysis, you would notice that the KLCI has broken out of an ascending triangle in the 60 min chart.
On the other hand, if KLCI breaks below this box, then we might see weaknesses in the KLCI and across the board.
In the event that Maybank breaks above this box, it might move higher till the resistance area, where I have highlighted in red area.
This might give us a clue when KLCI might encounter resistance as well.
2 days ago I showed you the presence of a 60 min ascending triangle in the KLCI.
As you can see from the chart above, the KLCI had a bullish cross (where the 60 min 20 MA cross above the 60 min 50 MA) and it also gap up above the top of the ascending triangle.
When an index or stock gaps up above the ascending triangle this is a powerful statement to us that they want to go up.
However, KLCI was not able to move higher that much because of the fact that there was a declining 60 min 200 MA.
Declining 200 MA whether it is in a 60 min chart or daily chart or even a weekly chart can be a powerful resistance and it needs time to be overcome.
Sometimes the 200 MA can make the stock or index retreat and fall.
In the case of KLCI above we can see that the 200 MA halted the advance but it did not cause the KLCI to fall that much. This may be a good sign for the bulls.
The top of the ascending triangle is also a very good support area.
Well, if the KLCI can stay above the top of this ascending triangle, then I think KLCI will eventually slowly drift up higher. On the other hand, if KLCI drops below the top of the ascending triangle, then this may signal weakness.
And we may possible have lower prices in the KLCI.
KLCI is still in a sideways trading mode as you can see from the chart above.
This 60 min chart is slowly telling us that the market is trying to decide whether it wants to go higher or lower.
Some consolidation or sideways trading is actually good for the bulls as it helps to absorb the power of the sellers.
If you notice from the chart above, a possible 60 min ascending triangle may be forming and this might give us some clue of the short term movement of this index.
If it is able to break above the top of this pattern, then we will have a breakout and possible higher prices for the KLCI.
On the other hand, if KLCI breaks below the lower trend line, then this may signal pattern failure and a possible weakness.
How have you been doing in your STAY AT HOME time?
This time will be challenging for so many people as they will be out of jobs. Some live from hand to mouth and without any savings.
Hopefully the government will continue to provide more and more help to its citizens in this time of need.
The chart above is the 60 min chart of the KLCI.
It has bottom around 18-20th of March 2020 and risen a bit since then.
Right now it is trading sideways and this may be a good thing. I have drawn the trading range above. It is the box area.
Sideways trading can mean a rest before moving back up.
Try to look at where the KLCI might break out of. If it breaks out higher above the box, then it is likely to continue to move higher. On the other hand, if it breaks below the box, then we could see more weakness and more sell off.
I think most major markets in the world including the KLCI will take its clue from the US stock market. So do check out my analysis on the US stock market.
If the US market can move up and break out higher then it will help the KLCI to break out higher above this trading range.
Oct 23, 20 08:22 AM
The US stock market seems to point to a Republican victory. It is still in an uptrend and therefore we should continue to remain bullish.
Jul 13, 20 07:44 AM
Here is a technical outlook for the US stock market.
Jul 13, 20 07:44 AM
Here is a technical outlook for the KLCI.
Jun 29, 20 08:04 AM
Technical analysis of the KLCI for the month of June 2020. What is likely to happen? Read here.
Jun 29, 20 08:03 AM
Well, sell in May did not materialize for the S&P 500 but the market continues to chugg higher. What is in store for us this month?