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.
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.
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.
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:
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