Top pick for the day - MSCI World Index

The next leg down has begun?

The MSCI World Index has rebounded sharply from the September lows but the index could potentially be turning down again in the coming weeks.

Our previous call for the index to c-rumble (see 8th July issue) and the market has obliged, crashing to a low in September before the current rebound.

The rebound has taken prices back up to retest the base channel of the initial fall and it appears the prices have failed to breakout of this channel.

A sharp fall to below 397.35 would likely signal that the next leg down to retest the 372.91 levels is underway.

A push above 416.26 would suggest that the alternative view may be taking place as the rebound completes its wave-c of 2.

Only thereafter, we can expect the next big move to happen, and it is pointing downward.

The LT chart on the left is pretty much self explanatory following the break of its major support trend line in July.

The odds would continue to favour weaker prices in the weeks ahead. Use rebounds to sell in to strength. (Read Report)

Source : CIMB Research