Where is FBMKLCI heading now?

Fundamentally, it is relatively expensive at 1,673 (at a trading P/E of more than 18.0 times). Technically, where is it now?

FBMKLCI has been a bull rallying from its double bottom in 2009 till Aug 2014, when its long term upward trend was broken.

KLCI_1_break.png

From another angle, we see the moving average bearish cross whereby 50D MA crosses below 200D MA towards the end of year 2015, signalling further downside risk.

KLCI_2_goldencross.png

Personally, if FBMKLCI trades below the support line of RM1,503, we should expect further weakness in the index. We may also see potential trading range bound of  RM1,503 – RM1,718 in the short-medium term.KLCI_3_support & resistance.png

If FBMKLCI trends below the critical threshold of 1,500, this shall be lower than the lower bound as per statistical prediction from Tradingeconomics.com:

malaysia-stock-market-forecast@2x.png

Forecast Actual Q2/16 Q3/16 Q4/16 Q1/17 2020 Unit
Stock Market 1673 1680 1630 1570 1540 2140 points
Malaysia Stock Market (FTSE KLCI) forecasts are projected using an autoregressive integrated moving average (ARIMA) model calibrated using our analysts expectations. We model the past behaviour of Malaysia Stock Market (FTSE KLCI) using vast amounts of historical data and we adjust the coefficients of the econometric model by taking into account our analysts assessments and future expectations. The forecast for – Malaysia Stock Market (FTSE KLCI) – was last predicted on Sunday, May 1, 2016.

Source: http://www.tradingeconomics.com/malaysia/stock-market/forecast

 

DISCLAIMER: THIS SITE IS FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES MENTIONED ABOVE.

Author: Ken Utau

Data Scientist, Markets Analyst and Food Lover

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s