FBMSCAP Charts Analysis (Week 51)
The daily chart of KLSE Small Capital Index (FBMSCAP) has shown 3 white candles, forming a second bottom since mid October. It is early sign of trend reversal but no confirmation yet until it manage to clinch above 15927 which is the 30-days moving average and also the previous bottom. MACD has shown sign of cross over but hasn’t gone into positive territory. RSI has just went out from the oversold region. Stochastic on the other hand has shown positive sign.
Interestingly, looking at the weekly chart, a Hammer was formed this week, touching just the 200-week average. Stochastic started to show sign of bullish cross over while MACD is still bearish. From here, I think it needs another week or two to confirm if the index will move into bullish mode. Just no confirmation yet. After all, FBMSCAP has gone through a big consolidation in the last 3 months, erasing what it gained over the past 18 months. It took only 3 months to move the index back to square one to where it was 18 months ago, sounds scary. This might be time for a bargain hunting but bear in mind that some small cap stocks are still trading at overpriced so it is still back to the analysis of individual stocks.