In my previous post, FKLI Nov contract failed to close above the 870 points level on the intraday hourly chart. This week is a short week for US as they are preparing for the holiday season. Dow Jones fall in the morning session but rally after the afternoon session to close on a positive note of 36 points (+0.43%), while NASDAQ was down by 7.29 points (-0.50%). By now, I believe that many people are scratching their heads and wonder where does the global financial markets are heading to? Recession and unemployment are felt everywhere. Banks are failing. Giant insurance company AIG broke the silence by announcing her mountainous problems. Automakers are begging for cash from the government. All these news are really depressing to the economy. But as we all know that the stock markets are leading the main street business by months. Rescue plans are on the way to the ailing companies. Value and blood are found everywhere on the financial streets. Will this be the end of the financial depression? Should we expect a healthy rally from here? Let’s look into the Malaysia stock market.
I am actually bullish on the short term trend of the global financial markets. There are a few notes I would like to share on why I think this way. After that I will also share out my thoughts on what should be done and what should not be done at all. This post is a continuation to my previous post on FKLI outlook.
Why I am bullish on the market at this moment of time until new information arrived at my chart?
- Corrective chart pattern of descending triangle and symmetric triangle are forming on the way down. This is one bullish note. Again, confirmation from the chart is needed before we could say for certain.
- The markets had losses quite substantial values from the peak. Before you throw an egg towards my face, let me tell you that I am against catching the falling knife. If you are planning or attempting to catch that falling knife, you are on your way to financial disasters. So, this point would be neutral although it could be on the bullish note.
- Volumes are picking up on these few weeks which could be signifying that buyers are coming in to pick up the discounted stocks. This would be a bullish note.
- Commodities like crude oil and palm oil touched the lowest point which coincides with the pivotal point. Again this is bullish note.
- Recession news is everywhere. People are very pessimistic. This news could be neutral. Anyway, never, and again I repeat, never believe in the news. Trust the chart and hear from what it wants to tell you.
- From the Elliott Wave standpoint, corrective wave pattern such as descending triangles are indeed corrective reaction to the primary trend. This signifies at least got another big rally up from here. Whether the rally is corrective in nature or new impulse wave, it does not really matter for shorter term trader. This again another bullish note.
- From Gann perspective, a new cycle is unveiling now. This could be another reason to be bullish although I have not performed extensive back test on this yet. I would recommend staying neutral here although personally I am on the bullish note. Actually, this point alone weighs a lot.
- The target of 745 for Malaysia KLCI market has not been tested or reached. This makes me a little uncomfortable as I would actually prefer to see it goes down further to test that level before I would really turn bullish. So, this is a bearish note.
Ok, we are having a trading setup here. Next is to wait for the trading signal to be triggered and confirmation to be followed before we jump in full scale on this. Here we go. We will be looking to trade on the FKLI next month contract which is the December month as November month is expiring soon.
Trading Ideas: Long FKLI Dec if hourly chart closes above 865. Short FKLI Dec if hourly chart closes below 844.
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Trading breakout!! FKLI Dec contract rallied up at the last minute and closed at 867. As mentioned in the post, I am calling bullish trend. Go long.
I am wrong. It’s a bear flag. Breakdown from bear flag confirmed. Continue shorting the market.
Again, I am wrong. FKLI closed above the bear flag which invalidate the bearish chart pattern. I am looking to see if FKLI can break above the 930 and stay above that crucial level.
Hi,
Discipline is the key now if you are a trader or investor in the stock market. As all global markets including Indian stock market have become highly volatile because of which many investors and traders are burning there fingers. Still we suggest there are lot many opportunities which can let you earn a lot from stock market.
We strongly advise everyone not to follow rumors and follow technical analysis.
If you have any doubt, lets share it in this blog and it will help lot many other traders.
Regards
SHARETIPSINFO TEAM
Whether it is better market regulation or etc, it is best for investors to look at fundamentals. Lets look at long term investment and growth.
Happy Regards,
Alexander
Petaling Jaya
MALAYSIA
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