FBMKLCI
1300 Level – Sustainable?
The FBMKLCI surprised us by trading near to the important support level that we are looking at – 1300 level, however, the index managed to recoup some of the losses and closed above 1330 level. Whether the 1300 level that we are looking able to be well-supported?
As I mentioned, predicting the market movement will not be part and parcel of trading, we just need to follow our trading rules set and trade accordingly.
Base on technical analysis, the index will able to sustain above the 1300 level, at least for this week as:-
1) The index is trading deep into oversold territory, technical rebound is expected to set in.
2) 1300 is the Fibonacci’s level of 61.8%.
3) 1300 is the level that the index has suffered 20% from its high (1597).
4) Ahead of the budget announcement on this Friday.
5) Quarter end, thus window dressing may set in.
However, any technical rebound should serve as a level for investors to take profit on your stocks, especially the below 2 financial stocks.
MayBank
Last Done: RM7.51
As you can see, Maybank stock has been trading within the RM8.50 – RM9.00 range for nearly a year. However, the stock suffered a major breakdown last Friday, taken over the support level of RM8.35, SMA 200 and the Fibonacci level of 78.6%.
We will see further major retracement for this stock moving forward as this maybe the beginning of the sell-off, investors who owned this stock should take the opportunity to close your position on any technical rebound.
In view that the stock is trading into oversold territory, technical rebound is expected for the near term. This shall serve as the final opportunity to close your position/ scale up and take profit, especially on any rebound towards RM8.00 level. I reiterate, the technical rebound should serve as a level to dispose your holding, not a level for you to accumulate shares.
The immediate support is seen at RM7.15 level, if this level is being taken over convincingly, the next reliable support level can only be seen at RM6.45 level.
Public Bank
Last Done: RM11.82
Same situation like Maybank, the stock will start to suffer major retracement with the SMA 200 and the Fibonacci level of 78.6% being taken out convincingly. This is just the starting of the downward pressure and investors should take the opportunity to close your position on any technical rebound/ scale up and take profit, especially on any technical rebound towards/ above RM12.00 level. (Technical rebound is expected as the stock is trading into oversold territory)
The next reliable support can be seen at RM11.00 level, failure for this level to be supported will see the stock to retrace below RM10.00 level in the near future.
FKLI
Temporary Support – 1300 Level!
Similar to the underlying, the FKLI staged a strong rebound at the Fibonacci level of 61.8%, 20% retracement from its high and the psychological support of 1300 level. However, the strong retracement set in yesterday may indicate the 1300 level will not even able to give the necessary support for the near future.
However, I reiterate, predicting the market shall not be part and parcel of our trading, we just need to follow our trading rules closely and let the market determine the direction. With the budget 3 days to go and the index is trading deep into oversold territory, I am in the view that the index will able to support at 1300 level, at least for this week.
Investors should hold on to your short position and the stop loss level should be revised lower to 1350 level.
FCPO
Uncertainty…
The FCPO suffered the sell-off in tandem with the stock markets on the view that demand will reduce if the economic fall into recession. The FCPO broke through some of the important supports such as:-
1) The downtrend line
2) The Bollinger middle band
3) The range trading
If the FCPO managed to regain its posture above the recent low (2917), the probability for the FCPO to resume its range trading will be higher, else, the FCPO may suffer further downward pressure. Risk averse investor should stay on bay with the current uncertainty, whereas risk taker investors can take a small long position if the FCPO able to break through the 2959 level (Fibonacci level of 61.8%, please refer to the chart 2 below) convincingly with stop loss level being set around the 2900 level.
The immediate support is seen at 2900 level, followed by 2857 level and the immediate resistance is seen at 2917 level, followed by 2960 level.
Chart 1
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