FBMKLCI dropped 8 points to close at 1717 today. From the weekly chart, we can see that the index - though it has broken above the downtrend line at 1660 - is still boxed in between 1600 & 1720. This leads to a sideways trading where the more applicable indicator is the stochastic indicator. As the indicator shows the index to be in an oversold position, a pullback is expected.
Chart 1: FBMKLCI's weekly chart as at Mar 9, 2017 (Source: MalaysiaStock.Biz)
Nevertheless, I like to emphasize again that the long-term outlook for the index has turned mildly bullish. The chart below shows FBMKLCI to have moving within an upward channel, with MACD crossing above its signal line.
Chart 2: FBMKLCI's monthly chart as at Mar 9, 2017 (Source: MalaysiaStock.Biz)
The market may be taking a cue from Wall Street as traders there are positioning themselves for a correction in the US markets. To me, a mild correction in the US markets is just what the doctor orders for Asian markets going forward.
Chart 3: DJIA's daily chart as at Mar 8, 2017 (Source: Stockchart.com)
Based on the above, I believe you should stay invested in our market for the near to medium-term
http://nexttrade.blogspot.my/2017/03/market-outlook-as-at-march-9-2017.html
