"Sesungguhnya Allah dan para Malaikat berselawat ke atas Nabi S.A.W, wahai orang-orang yang beriman, ucapkanlah selawat dan salam penghormatan ke atas Nabi Muhammad S.A.W"-Allahumma Solli'ala Sayyidina Muhammad-

Tuesday, October 18, 2011

Market outlook as at 18 October... Don't panic!

The moment this acticle wrote, KLCI index is at 1437.42 drop 27.93 points! Recap on previous market analyst, they have noted that the medium-term downtrend line for FBMKLCI would be tested soon and it's actually happen which the index managed to easily brushed aside the strong horizontal resistance at 1445-1450 yesterday 17 October 2011 as my previous articles. A break above that downtrend line would be positive for the market as it would signal a pause in the downtrend. But, how far would this rally go?

If the market action in 2008 can be a guide, the current rally's next stiff resistance would be at the 20 & 40-week SMA lines at 1471-1483. On weakness, it may drop back to the breakout level of the previous downtrend line at 1435. I expect the market to trade within this band- between 1435 & 1483- for the next few weeks. A breakout of the band (which has yet to be formed) would then point the way forward for the market either the BEAR continue or BULL.

In conclusion, those who hold a bearish view of the market should look to sell but you can afford to pace your selling. If possible, you should sell into strength at 1471-1483 (and possibly buying on dips to 1435). However, those who think otherwise, you can choose to hold & add to their position on market weakness (by buying on dips to 1435).

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