FKLI - Hovering Near Top of 1,700 (Jan 08)

Hi all.

...... Happy 2013 !! ...... :)

Had been enjoying my year-end + year-start holiday, traveling back to my hometown in Malacca, followed by my bf's hometown in Sungai Petani.

It's my annual refreshing countryside getaway, away from the concrete jungle of KL & away from my laptop screen. 

As a local Malaccan, I forgot to snap the chicken rice ball pic....:p

Anyway, did had a few shots here & there to share.

>>>

Now, let's get back to business, in the brand new year of 2013....

First major global event for 2013 will definitely be the Fiscal Cliff deal reached at the wee-hour before US starts their first trading day for the year.

Despite the celebration worldwide, with major global indices marching towards/breaking new highs....The deal was nothing but a quick fix to avoid automatic tax rise for middle-class American families.

There was no specific address to spending cuts, only a mere delay of the issue for 2-months time. 

In fact, US has actually officially reached their elevated debt ceiling of $14.6Trillion on Jan 1, 2013. The US Treasury has to take extreme measures to technically avoid a default, by reducing government investment in certain funds, just to be able to sustain national expenses up to March.

While the year-start rally gradually cools down now, there are a few risk factors we need to be monitoring closely for 1Q13.

1. Corporate America earnings for 4Q12, starting today (Jan 08), which shall also give some taste of overall corporate performance for CY12.
2. CNY rally -- end-Jan to early Feb'13.
3. US debt ceiling alarm which should start sounding around mid-Feb, coupled with anxiety over another round of political wrestling in Washington.
4. Early Mar'13 shall see our own market drifting over uncertainties from the looming GE13.

>>> 

Decembers are indeed magnificently bullish months for the local market.

Back in Nov'12, we were at all bearish, seeing a plunge of more than 80pts from all time high of 1,678 to below the 1,600 psychological level.

Our FBMKLCI ended the year 2012 at an all-time high of 1,688.95, while the FKLI lagged with a 10pts discount behind, closing at 1,677 (Oct'12 high).

After the Dec window-dressing rally, all momentum indicators are now hanging over their respective overbought zone. In fact, some already show overbought signals way back in mid-Dec.

Nevertheless, both KLCI & its futures continue to rally into Jan'13, KLCI to a high of 1,700, while FKLI touched a high of 1,705 just a few days back.

Despite the overcooked rally, with some momentum indicators now violating their own uptrend lines, there is still no reliable signs of a reversal, yet, on the price movement.

Both the indices are still comfortably above the up-TL since bottom of 1,590.

However, at all-time highs, uncharted territory, big round numbers tend to act as psychological resistance. Both index touched 1,700 but did not managed to hold above it.

On FKLI, Fibo projection from bottom of 1,590 shows a strong resistance at around 1,710 region. The bollinger bands are also seen closing in, we might well see slight consolidation ahead to find support at mid-band (currently around 1,677).

All in all, FKLI is generally still in a bullish mode, albeit it will find increasing difficulty to climb higher, with the bulls all exhausted supporting the highs.

My post-market analysis on FKLI (Jan 08)

FKLI - Still at top of 1,690-1,700 (Jan 08)

On the chart, I highlighted the possibility of a reminiscence of price movement when we were breaking to new high of 1,677 in Oct'12. 

Hence, price is likely to continue up slowly along the TL, regain 1,700 & go slightly higher (which may well be to the fibo level of 1,710), before breaking its all-supportive TL since 1,590 low.

Given the lack of decent correction along the way up, any future reversal will be a furious one & we shall be well-prepared to ride the wave down, soon.

>>>

Below is a quick share from Conrad's FB post, on what Fiscal Cliff & Debt Ceiling is all about....

LOL :)

Happy Hunting !! :)