Market Outlook as at April 23, 2015
Chart 1: FBMKLCI's daily chart as at April 22, 2015 (Source: ShareInvestors)
FBMEMAS has finally tested but failed to surpass its intermediate downtrend line, RR at 12750 a few days ago. It is likely to rest at the horizontal line 12700 before mounting another attempt.
Chart 2: FBMEMAS's daily chart as at April 22, 2015 (Source: ShareInvestors)
The rally amongst the big-cap (ie. FBMKLCI) and the braoder market (ie. FBMEMAS) pale in comparison to the strong rally seen in FBMACE and FBMFLG. These 2 indices had recovered substantially back to their August-September 2014 high due to a multitude of factors, such as:
1. Better earnings & business outlook for some
2. Mere affiliation helps
3. Risk taking activities by emboldened retail players
With Nasdaq surpassing its 2000 high, there is a good chance that FBMACE may continue to its uptrend after it surpassed its 2014 high a few days ago. However, it is worth noting that there are signs of weakness in 2 indicators: Slow Stochastics is showing bearish divergence while ADX & ADXR are showing a slight dip in uptrend momentum.
Chart 3: FBMACE's daily chart as at April 22, 2015 (Source: ShareInvestors)
While FBMFLG is 600 points away from its August 2014 high, its uptrend momentum is picking up. At this scorching pace, it wouldn't be a big surprise if it tests the 2014 high soon before taking a breather.
Chart 4: FBMFLG's daily chart as at April 22, 2015 (Source: ShareInvestors)
While the rally amongst the smallcap stocks should bring cheers to many retail players, we must bear in mind that this rally could be the siren song after a long bull market. This year marks the 7th year of a rally that began in 2009. Who would have thought that after the devastating 2008 Financial Crisis, we would have such a fine rally!
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