KLCI – Bearish Confirmed
With 5 consecutive days of closing in red, KLCI has confirmed its bearish momentum by falling more than 5% since 6/8 (from 1720 to 1606 today). Both weekly and daily charts showed that it has gone into bearish trend as the uptrend channel has been breached as index broken the critical support of 1720 a week ago and has never come back to that level after 5 consecutive session of red.
As the downtrend continues, KLCI is likely to test the next level of support 1596 very soon follow by a more drastic drop into 1533 region. If that happens, I do foresee it is going to be a very negative and long bearish market that is going to last for months. I hope I was too pessimistic and hopefully this does not happen.
All in all, the sentiment has been negative. For the negative trend to be reversed, index has to go back to 1720 level and climb higher. With Ringgit fell to the 17 years low, and the uncertain outlook of local and regional economy, no one could predict how worse would it be.
Is this the time to buy low? I doubt so, as the bottom is yet to be seen. It is best to stay sideline instead of rushing into the market as we may end up catching a falling knife.