Last Friday, FBMKLCI broke above its medium-term downtrend line, RR at 1500, and rallied to close at 1520. This rally may continue this week as the world celebrates the return of sanity in America (barely). I expect FBMKLCI to challenge the next 2 resistance levels at the horizontal lines at 1540 & 1590 this week.
Chart 1: FBMKLCI's daily chart as at Nov 6, 2020 (Source: Malaysiastock.biz)
The same pattern was witnessed in FBMEMAS, which broke above its medium term downtrend line, RR at 10950 last Friday. It may test its next 2 resistance levels at the horizontal lines at 11050 and 11400.
Chart 2: FBMEMAS's daily chart as at Nov 6, 2020 (Source: Malaysiastock.biz)
In New York, the MSCI Emerging Market ETF broke above the Jan 2020 high at 46 last Wednesday. It rallied to close the week at 47.93. This bullish breakout may signal the shifting of fund to emerging market as the incoming Biden administration is expected to raise taxes to finance its more progressive fiscal policies.
Based on the above, the market is likely to go higher in the near term. You may buy some beaten down blue chip stocks, such as Tenaga, Airport and Genting, if you want to ride on the expected price recovery.
http://nexttrade.blogspot.com/2020/11/market-outlook-as-at-november-6-2020.html
