When US sneezes, the rest of the world catches cold. Last week was certainly a ‘blood bath’ for many traders / investors. Multiple stop loss signals were triggered. Seriously, where are we now (as far as FBMKLCI is concerned)?

Technically…..

On a weekly timeframe, we are still above the 9 / 18 weekly moving average. DMI & MACD weren’t that clear. Nevertheless, one should be cautious when the 9 MA crosses below 18 MA.

TA_KLCI_Weekly_11022018.png

The daily charts shows a different story, whereby the KLCI is currently trading below 9D/18D moving average. The downtrend will be further confirmed if the 9D crosses below the 18D moving average. DMI & MACD indicators point towards a downtrend bias.

TA_KLCI_Daily_11022018.png

It is important to note that the relationship between FBMKLCI and S&P500 is quite significant with R-squared of approx. 64% and a significant coefficient (i.e S&P500). Based on this regression analysis, at current S&P500 level, the point estimate for FBMKLCI is 1,775 (i.e there is potential room for FBMKLCI to decline further). Nevertheless, the FBMKLCI is currently trading within the 95%-confidence forecast interval of between 1,707 and 1,844.

Stats-FBMKLCI vs SP500.png

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