KLCI Index Chart Analysis

Malaysia KLCI Index Analysis

I would like to touch on the outlook of the Malaysia KLCI index market after much cross examine and cross asset class analysis, that conclusion is KLCI is still bullish based on the principle of Fundamental Analysis, Technical Analysis and Fund Flow Analysis perspective.

Fundamental Analysis

Malaysia's economy is mainly export driven where it exports semiconductor & electronic products, palm oil, liquefied natural gas, petroleum, chemicals, machinery, vehicles, optical & scientific equipment, metals, rubber and woods at a value of 263 Billion in revenue, most to countries in descending order like China (16%), Singapore (14%), USA (13%), Japan (6.7%), Hong Kong (5.2%) and Thailand (4.1%).

please refer to the below link for more information.

https://en.wikipedia.org/wiki/Economy_of_Malaysia

Next we look at Trading Economics for Malaysia Economic Indicators, it is observed that USDMYR is currently trading at 4.18 level weaker than expected, recent high for USDMYR is 4.20 in November 2018. weaker currency boost exports couple with the fact that Malaysia Central Bank just cut interest rate from 3.25% to 3% in May 2019, a signals to boost economic activity through lower montary policy making to achieve higher exports objective. As an investor based on the fact that Malaysia Central Bank cut interest rate, investor could take a look at resource based sector and financial sector to position and include in their portfolio. resource based sector could see more exports and financial sector could see an increase in business lending activity. A weakening currency will result in an immense inflationary pressure felt by the Malaysians hence dampening more consumption. It is not surprising to see GDP growth rate fell slightly probably due to and influence by maecro economic conditions of Trade War impact between USA and China. A weakening currency tend to boost tourism activity in Malaysia to Genting Highlands Casino.

Current Palm oil price is traded at 2069 RM at 31 May 2019.

Please refer to the below link for updated daily Palm Oil settlement price

http://www.mpoc.org.my/Daily_Palm_Oil_Prices.aspx

Technical Analysis

Asian Investment Guru Mr. Hu Li Yang once said that stock market is the window to economic growth and not vice versa, a booming stock market where investors made profits from tend to boost demand consumption in real economy, a faltering stock market would not be able to boost demand consumption. So lets take a look at Technical Charts of Bursa (1818)

Monthly Chart Historical 

Monthly Chart Historical  With Technical Analysis

Charts of Bursa is bullish with big ascending triangle chart formation seen using orange color and green color lines drawn. a profitable stock market signals investor are investing in Malaysia stock markets.if KLCI rise every investor makes profit hence would translate into capital expenditure spending. Price is observed to oscilliate between green color upper and lower lines known as price channel formation. Investor could consider to buy on dips touching lower green color lines as support. Price just broke November 2007 high of 7.425 and register all time high in May 2018 with 7.844 price level when global economies are in a rough patch resulting in USA and China Trade War tension. Price is expected to challenge 10 RM psychology level for Bursa (1818) and subsequently challenge 13 RM with simple mathematics formula using year 2007 high 7.42 - year 2009 low 1.91 = 5.51 difference in price + 7.42 year 2007 high with aprice target of 12.93.


Dow Jones Malaysia Stock Index Monthly Chart

Dow Jones Malaysia Stock Index Monthly Chart with Technical Analysis

Dow Jones Malaysia Stock Index is observed to be bullish with various bullish chart formation displayed
1) Upper and Lower Orange Green color lines drawn - Price Channel
2) Price Channel, Rectangle and Bull Pennant.
3) Ascending Triangle Chart Formation with an upside price target of 444 and 509 points respectively using simple mathematic formula year 2008 high of 295 - year 2009 low of 146 = difference of 149 points + year 2008 high 295 = 444 points first target and using year 2014 high 360 points - year 2009 low 146 = diffference of 214 points + year 2008 high 295 points = 509 points as second target.


Ishares MSCI Malaysia ETF Monthly Chart

Ishares MSCI Malaysia ETF Monthly Chart with Technical Analysis

Ishares MSCI Malaysia ETF is observed to be bullish with various bullish chart formation displayed
1) Upper and Lower Green color lines drawn - Price Channel
2) Price Channel, Rectangle and Bull Pennant.
3) Ascending Triangle Chart Formation with an upside price target of 55 to 56.


KLCI Index Monthly Histroical Chart Yahoo Finance

KLCI Index Monthly Histroical Chart Yahoo Finance with Technical Analysis

KLCI is observed to be bullish with various bullish chart formation displayed
1) Dark Blue Color lines drawn - Falling Wedge Chart Formation
2) Upper and Lower Light Blue color lines drawn - Price Channel
3) Orange color lines drawn - Price Channel, Rectangle and Bull Pennant.
4) Ascending Triangle Chart Formation with an upside points target of 2450 points or possibly 3000 psychology resistance points target for secular bull market.


Fund Flow Analysis

Smart monies are bullish bias having accumulate large position of long futures.





Disclaimer: All news, information and charts shared is purely by my research and personal views only. This is not a trading recommendation or advice but on the basis of sharing information and educating the investment community. Different traders and investors adopt different trading strategies and risk management approach hence if in doubt please approach or seek clarifications with your Financial Adviser, Broker and Banker.