KLCI went further south...

FBM KLCI Index went further south today. Can we blame the news of bond default? The news shaken investors confidence, created an opportunity for market sell off. Cash market lost 17.58 points or 1.04 percent at the end of the day, April futures lost 23 points settled at 1670.50 while May futures contract ended at 1662.50 (-24.00).

In Hong Kong, futures market was a volatile trading session as today is the expiry of the April futures contract. Spot futures settled at 21470 (+180) while May futures contract finished at 21118 (-7). Range of the day for May contract was traded between 21122-21567 (445). The cash market gained 26.43 points finished at 21388.03.

Looks like Hang Seng Index is supported well above 21000 for the time being. But next month? Will we see higher high? Or lower low?

FBM KLCI Index is oversold within these few days. Will we see a rebound soon? 

FBM KLCI Index closed below 1700

We mentioned yesterday that FBM KLCI Index need a breakup or breakdown to break the boring trading range. Finally, we saw a breakthrough this afternoon thanks to 1MDB scandal - the default of $1.75 billion bond!

The spot futures open at 1712.0 in the morning, highest touched 1713. Futures contracts rollover activity plus the default news pressed the market all the way to 1702 in the morning session.  The support at 1700 couldn't hold on anymore. We saw market lowest went to 1690.0 before futures settled at 1691.0, lost 22 points. Cash market closed at 1692.50 (-22.01).

Immediate resistance for KLCI is seen at 1698. Higher resistance at 1706. On the downside, near support 1675, next 1650. Ringgit was weaker, last seen 1USD~ RM3.91.

Sell in May go away?

Market was range trading for the past one week. For Hang Seng Index, it manage to hold above 21000. The trading range for Hang Seng Index futures last week was traded between 21021-21664 (643). No matter how market falls, HSI is trading above daily MA10-21260, a sign of market is moving on a buying signal. The futures settled at 21291, lost 190 points at today's closing. For cash market, finished at 21304.44 (-162.60).

This week is the final week of the month. The futures market will start the contracts rollover activities and the long weekend is coming. How will the market moves? Will we see a higher high next week next month? Bear in mind, next month is May. The market is always spooked by the saying of "Sell in May and go away". Plus, Hong Kong market had been up since Chinese New Year, does it mean another correction coming?

Anyway, we sold Emperor Capital (HK:717) after a 10 percent profit within a month. We will look at it again if Sell in May comes. If not, we still have other stocks in hand for dividend collection in the second half of the year.

If 21500 had become resistance, 21000 is an important support for HSI. Further supports are seen at 20800, next 20450. On the upside, if market broke above recent high 21664, market will moves towards 21800, next target 22000. 

In Malaysia, FBM KLCI was ranging between 1700-1725 for the past one month. At today's closing, cash market closed at 1714.51, lost 3.45 points. The spot futures finished at 1713 (-6.50). KLCI Index need a breakthrough. The market need to break above 1730 to see a new trend. If not, breaking below 1700 will see supports at 1675, next 1650.

All Asian markets ended in green

After overnight Dow Jones closed up 164.84 @ 17721.25, today all Asian market ended in positive territory. Hong Kong market is the best performing market, surged 3.19 percent, Nikkei closed up 2.84 percent and Shanghai ended up 1.44 percent.

Hong Kong April futures market opened gap up 239 points in the morning. Lowest traded at 20691, market went highest reaching 21223 at the end of the trading day and finally settled at 21216, surged 746 points or 3.64 percent. Cash market finished at 21158.71, up 654.27.

In Malaysia, KLCI Index futures was traded between 1716.5-1724.5 (8.0). Futures closed up 7.5 points at 1721. Cash market gained 8.11 points settled at 1723.11.

Will market moves higher? Technically, Hang Seng Index broke crucial resistance- daily MA100-20557 and 21000. There is a chance market will move higher; with on and off profit taking comes in. Immediate resistance for HSI is at 21300, next 21500. On the downside, supports are 21080, next 20850.

KLCI Index still ranging between 1700-1725. This market need to break above 1730 to see a higher trading zone. 

Resistance ahead

It was a choppy week again for the market. The range of the week for Hang Seng Index spot futures was traded between 19967-20835 (868); while for KLCI Index futures, trading range was between 1704.5-1723.0 (18.5).

For those who are holding stocks, there might be no big difference in price fluctuation, unless the speculation stocks you are holding moved dramatically. For those who are in index trading, it is a good opportunity to make money provided you stand on the right side; if not stay away from volatility if you couldn't take it. It could be a bored session in the market if the stocks you are holding is not moving yet. But, be patience.

We see Hong Kong market might consolidate between 20000-21000; and for KL market, index will range between 1700-1730 in short term. The market need catalysts to break the upside resistance or downside support...

Ringgit is strengthened against USD again as we can see 1USD~RM3.88 today. We will monitor the currency market closely.

Since we just bought a property last week, we'll be spending more time in our new portfolio compare to the current market. However, we are trying to be multitasking so we wouldn't miss out any making money opportunity.

Is correction coming soon?

With overnight US Dow Jones closed up 107.66 @ 17792.75; we expect to see market open higher on Monday.

We see immediate resistance for KLCI Index at 1725. Next target-1750. Market might try to test the psychological support at 1700, further down 1675 is the next support.

There is no trading for Hong Kong and China market on Monday. Depending on how other Asian markets perform on Monday and how US behave on Monday closing, we see resistance for Hang Seng Index at 20900. If market can break above this level, we might see 21000 to 21300. On the downside, supports at 20300 and 20100. If market unable to hold above 20000, we might afraid short term will see 19800 or lower.

No matter how the market moves, we hope we will exercise our risk management strategy and never be afraid to buy during bargain hunting.

Market choppy, but slowly up

Though there was less update from us about the market lately, it doesn't mean we are on holiday again. We were spending some time in property hunting.

The market was choppy in the entire March month, but it was slowly inching up. The range for March Hang Seng Index Futures was traded between 18993-20891 (1898). The active futures contract is now April, with the day range between 20453-20835 (382), closed at 20499, lost 278 points on Friday evening due to profit taking before long weekend. Cash market settled at 20498.92, lost 277.78 or 1.34 percent. In Malaysia, cash market closed at 1710.55, down 7.03 points on last Friday. April futures contract lost 8 points, finished at 1704.50. 

We've added Emperor Capital (HK:717), one of the leading broker house in Hong Kong into our portfolio, and also Cash Finance Ser GP (HK:510). We are looking forward to add in a few holdings when market retraced and glad to hear about dividend payout from a few companies we are currently holding.