FBMKLCI Weekly Report - 06/4/2019

Technical Analysis


- FBMKLCI drop significantly from 1646.43 level to 1628.66 after Nikkei Malaysia Manufacturing PMI® registered at 47.2 in March 2019 and it is lower than 47.6 in February 2019.

- It is near to previous low 1626.93 level on Dec 18, 2018. Thus, the market is very concern about Malaysia short term outlook which leads to a panic selloff in the shares market.

- However, there is strong buying force which was stopping FBMKLCI to drop further in the next trading days.

- FBMKLCI entered a consolidation phase in following trading days.

- There is the highest transaction volume happened on Apri 4, 2019 (Since Mar 19, 2019).

- With RSI, MACD histogram and MACD signal, we believe FBMKLCI will re-bounce and challenge to close the 1st past gap down on Mar 22, 2019.

- However, there is no signal indicates FBMKLCI complete the downward wave (E) at this moment. FBMKLCI still in downward trend.

- Resistance R2: 1709.17

- Resistance R1: 1654.26

- Support S1: 1626.44

- Support S2: 1618.32

Economic Analysis


a) Malaysia Balance of Trade

- Malaysia Balance of Trade registered a positive position with RM 11.1b in Feb 2019 which is slightly lower than the balance of trade in Jan 2019. It is a good indicator for Malaysia economic outlook. But Devils hide in details.

- We noticed export and import drop significantly in Feb 2019 accordingly.

- Drop in Malaysia export majorly contributed by Palm oil & palm oil-based products, refined petroleum products, crude petroleum, timber @ timber-based products and natural rubber. With the export level in Feb 2019, do related company able to perform better in Q1 2019. Doubtful!!

- Due to market sentiment, local big buyer/private consumer stay alert and not willing to increase the purchase level.

b) Malaysia Manufacturing PMI

- Nikkei Malaysia Manufacturing PMI® registered at 47.2 in March 2019

- Refer to IHS Markit economist, PMl falls in March and remains below long-run average.

- Demand conditions grow tougher, hampered by export markets/soften demand in Asia Market.

- However, business outlook at strongest for almost one year.


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