It’s the time of the year again where we are nearing to the end of Year 2015. Let’s take a look at how the Malaysia FBMKLCI (Performance of the Malaysia Stock Market) is doing towards the end of the year!
You may take a look at how the EMA200days works FIRST by re visiting the link below:
By skimming at the chart above from the left to the right, we have seen how the Malaysia Stock Market fallen into a Downtrend in the month of May 2015. Since then the FBMKLCI have been living in a Downtrend momentum creating fears to the investors and traders, having abundance of negative news surrounding the market over the months, investors make losses from the stocks, and people choose to rather hold cash than to be inside the stock market. That is just the gloomy scenario I’ve mentioned here. On the other hand, there are investor who made abundance of wealth from the stock market over the months, there are traders who traded the right instrument over the months, and most importantly those who know where to pick their fruits tend to see a different scenario compared to the mass.
So which scenario did you fit into for the Year 2015?
Like how I mentioned in my previous posts, one of my way to determine the trend of the market/stock is through using Moving Averages. Over the past months there is only one particular moving average that I take it as a base for the measurement of the direction of the market trend, which is the EMA200days.
“Anything above the EMA200days = Uptrend hold”
“Anything below the EMA200days = Downtrend hold”
In the month of October 2015, we have seen the FBMKLCI rallied towards its EMA200days resistant (1723) and failed to break out nor hold above this level of resistant. The index falls back into their downtrend momentum since then towards the month of December.
After the recent announcement of the U.S Fed rate hike, we have a round of window dressing activities in our stock market and as of today the FBMKLCI hit once again its EMA200days resistant (1702) and pull back at the closing day at 1693.
The month of January Year 2016 will be an important month for the index to determine its direction as:
Resistant now is at 1702
Short Term Support now is at 1685
A close above this level of resistant will be good for the index.
A close below this level of short term support will trigger another market correction for the index.
Remember the difference between the index Call Warrant and Put Warrant?
Yes it’s been mentioned in my newsletter on how I favor the Call Warrant rather than the Put Warrant.
How do they look like now?
If it is all GLOOMY throughout the year then where have the Bull been running at?
Opportunities have always been found in the Mid Cap to Small Caps and selected Penny Stocks!
Uptrend Stocks have been giving fabulous reward to both investor and trader.
Downtrend Stocks does not mean you can’t touch it. It has always been emphasized that Downtrend Stock is only meant for short term trading activities ONLY which you can make a lot of money if you have a good trading plan! But I’d still prefer an Uptrend more than a Downtrend Stock.
Here are a list of some of the stocks for ILLUSTRATION purposes only!
Lastly I wish everybody a Happy New Year 2016! May the Year of 2015 be a lesson learnt for the mistakes made, a lesson to improve for the things done right. Wishing everyone a fabulous year ahead! Cheers!
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*Stay with us on our New Year 2016 Stock Picks*
(9 Year Position Equity Trader, Founder of trendfollowingmalaysia.com, Finance Speaker)