Today is the first trading day of the year of 2016. Welcome to 2016 and we hope it is a good start of the year.
On last Thursday, DJIA closed at 17425.03, lost 178.84 on the last trading day of the year of 2015. Because of this, we expect Asian market to open lower on Monday morning. After that, how will market behaves on first trading day of the year? Open low and end up in positive territory by end of the day? Or open low and close lower at final trading hours? Are retail and institutional investors ready to back to stock market after the festive season?
We believe there will be a Chinese New Year rally in the next few weeks. Chinese New Year also known as Lunar New Year is a big celebration in China, Hong Kong, Macau, Taiwan, as well as Chinese Ethnic in Malaysia, Singapore and the rest of the world. However, only the mentioned countries and a few are entitled for public holiday.
This year's Chinese New Year- the year of Monkey falls on the 8th of February (Monday), which is just a month away. If there is a CNY rally, we think it's going to be a short and quick one. Profit taking will comes in before CNY as investors close off position to cash in profit.
Looking at Hang Seng Index, the monthly SMA-21782 is a crucial support/resistant. This meaning if market falls below 21782, further support we see is 20984. If market managed to hold firm above this level- 21782, it will try to test upside resistant at 22222.
As for KLCI Index, the first support we see for the coming trading week is at 1675, further 1650 and 1625. Resistant-1700 and 1725.
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