FBMKLCI has recorded the worst performing month of March since 2008 (a m-o-m decline of 3.75%).
Historically, there were positive rebounds in the month of April following declines in March (e.g 2008, 2009). Based on the above seasonality chart and given a decline has been recorded in March, we may (?) anticipate a positive monthly movement for the KLCI in the month of April.
Nevertheless, the FBMKLCI looks relatively weak from a technical standpoint. It is currently trending below the MAs.
Perhaps, the bearish trend may continue for the large caps (possibly due to outflow of foreign funds). On the other hand, the mid caps are well-supported at above its MAs. We may possibly see re-allocation funds from large caps to mid caps.
BM Finance index appears to form a “double top”, which may possibly spell near term weakness for the finance sector. The index has also been trending below its MAs.
All three indices – BM Consumer, BM Plantation and BM Property seem to be showing possible formation of “bear flags”:
On the contrary, we are seeing some positive momentum from the Construction Sector of which the BM Construction index has been holding up above its MAs:
Two particular stock counters catch my attention (due to its possible developing positive momentum) – Symphony Life & V.S Industry.
Next possible resistance point for Symphony Life – RM0.47
Next possible resistance point for V.S Industry – RM1.17
In a nutshell:
- FBMKLCI remains bearish
- Pockets of rebound opportunities are available in the mid caps
- No clear positive momentum seen in Finance / Consumer / Plantation / Property sectors
- Positive momentum developing in the Construction sector
- Personal picks – Symphony Life & V.S Industry
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