Where is FBMKLCI heading now?

Fundamentally, it is relatively expensive at 1,673 (at a trading P/E of more than 18.0 times). Technically, where is it now?

FBMKLCI has been a bull rallying from its double bottom in 2009 till Aug 2014, when its long term upward trend was broken.

From another angle, we see the moving average bearish cross whereby 50D MA crosses below 200D MA towards the end of year 2015, signalling further downside risk.

Personally, if FBMKLCI trades below the support line of RM1,503, we should expect further weakness in the index. We may also see potential trading range bound of  RM1,503 – RM1,718 in the short-medium term.

If FBMKLCI trends below the critical threshold of 1,500, this shall be lower than the lower bound as per statistical prediction from Tradingeconomics.com:

Forecast	Actual	Q2/16	Q3/16	Q4/16	Q1/17	2020	Unit
Stock Market	1673	1680	1630	1570	1540	2140	points

Malaysia Stock Market (FTSE KLCI) forecasts are projected using an autoregressive integrated moving average (ARIMA) model calibrated using our analysts expectations. We model the past behaviour of Malaysia Stock Market (FTSE KLCI) using vast amounts of historical data and we adjust the coefficients of the econometric model by taking into account our analysts assessments and future expectations. The forecast for – Malaysia Stock Market (FTSE KLCI) – was last predicted on Sunday, May 1, 2016.

Source: http://www.tradingeconomics.com/malaysia/stock-market/forecast

 

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