The Outlook for KLCI trading

KLCI OUTLOOK:

Most Asian markets ended strong as investors took full benefit of the easing US China trade tensions (after the trade deal signing), positive sentiments over the global economy and more stimulus measures by China to maintain a minimum 6% growth for 2020.

FBM KLCI closed slightly in the red in long holiday trading on Friday to extend its losing streak to five days. There were 378 decliners, 337 gainers and 383 counters unchanged.

Glove makers were once again the target of buyers as the death toll from China's coronavirus is increasing even after the Chinese government locked down on 10 cities. The spread of Corona virus is the second international instance so far in 2020 which is affecting the markets, the first one being the complications in the middle east which shrugged off KLCI on a negative sentiment.

Banking stocks observed a strong rebound after the announcement that Bank Negara is set to cut its overnight policy rate, which marked a positive move for the banking sector.

Consumer & Goods sector has been on the rise for a while and it is expected to consolidate for a next few trading sessions.

Logistics sector has seen some momentum over the last few days which could be impacted by the hold on exchange of goods from China as the Corona Virus are expected to be in effect.

TECHNICAL OVERVIEW:

Following a rebound from a low of 1571 to a high of 1596 KLCI is now making lower lows. With a strong support at 1547 KLCI is expected to make a short rebound to the level of 1585 with glove and banking sector in focus.  Key resistance still remains at the level of 1615 (200D SMA) above which KLCI is expected to test 1680. The support stands at 1547 below which KLCI may induce more selling by testing the levels at 1520-1510.

KLCI’s upward momentum remains intact as it has formed a free candle from its lower Bollinger band in long term charts indicating a positive opportunity to accumulate stocks for the investors.    

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