FBMKLCI Index (KLCI) broke below the ST uptrend channel support recently. In November alone, it has fallen 0.41%.
Can the bull make a comeback?
Looking back from the year of 1978 until 2014, on average, there were four months that made a negative return.
March, August, September and November had a negative return while the rest of the months were positive. The worst month being August (-2.1%) while the best month was December (3.8%).
As we are still in the month of November, we could still see some downside ahead.
Nonetheless, the index is heading into a seasonally positive period and the next few months could turn out better than the current month.
That is what statistics is saying but what about the charts?
Prices are still trading above the MT resistance-turned-support trend line and also its 50-day SMA.
Besides that, there is no sign of weakness on the indicators yet. Thus, prices could potentially still head higher towards 1,727 and 1,744 as long as the 1,595 low holds.
All bets are off if the 1,595 low gives way.
Therefore, in our opinion, the bull could potentially make a comeback in December.
Bear in mind, this is only a ST bullish view and a tight stop loss is needed as our medium and long term view for the KLCI is still intact. (Read Report)
Source : CIMB Research