16/5/2020 Weekly Chart Update

KLCI: The KLCI was bugging the trend with a gain of 21 pt is or +1.5% for the week at 1403. The index is above the 20day MA but below the 200 day MA. The good performance of the index was mainly due to the glove manufacturing companies Top Glove and Hartalega, KLCI component stocks that had risen 5%-10% on a daily basis from Tuesday to Thursday due to good future earnings. Perhaps we need to ask ourselves is this future earnings sustainable? How long are we going to see the pandemic last? What will happen to these earnings after the pandemic? Moving forward, the sustainability of the index to stay above the 1400 level depends on the broad market sentiments for next week. The index is not sustainable with a few component stocks well performing. Next week the index support is seen at 1375, resistance 1425.

On the other hand, the S&P 500 lost 61 pts or -2.1% for the week at 2863. The index was once below the 20 day MA on Thu but it managed to closed above the 20day MA line on Friday. The index trend is weakened however, the weekly chart saw a tail in the candlestick chart pattern which indicated some support for the market. Economic data continued to worsen around the globe which is considered a historical moment as many of us have not seen this in our life time. Nevertheless, next week the US market may be choppy as there is a fight between the bulls and the bears and investors will be looking at the technical charts more than the economic data. Next week S&P 500 support is seen at 2800, resistance 2900.

(S&P500 Daily Chart)

(S&P500 Daily Chart)

 

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