Market Outlook at at January 27, 2015

Market Outlook at at January 27, 2015

Due to 2 holidays- the FT Day replacement & Thaipusam - next week will be a shortened week for Bursa Malaysia. As a result, we are seeing some house-keeping activities in the market, which normally tend to be negative. However, with ECB announcement of QE of Euro 1.1 Trillion (or Euro 60 billion a month) and crude oil prices stabilizing, I believe the market may more reasons to be slightly upbeat than downbeat.

 
Diagram: Malaysian Public Holidays for Jan-Jun 2015

Chartwise, FBMKLCI & FBMEMAS performed as expected. Both reacted very positively to the breakout above the neckline of the inverted Head-and-Shoulders formation. The rally failed to break above the intermediate downtrend line for both indices. It is important that the pullback does not violate the recently surpassed neckline (at A-B or 1775 for FBMKLCI or at A1-B1 or 12150 for FBMEMAS).


Chart: FBMKLCI & FBMEMAS's daily chart as at Jan 26, 2015 (Source: ShareInvestor.com)

I believe that the market recovery is still intact provided the necklines (as mentioned above) are not violated. On the other hand, if FBMKLCI and FBMEMAS can surpass the intermediate downtrend line at 1810 & 12450, respectively, the market could continue its prior uptrend.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of FBMKLCI.

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