Sentiment Index - Malaysia Stock Market

Constructed and Written by Smartbiz

Asian stock markets dropped on Tuesday as a slowdown in China's economy added to fresh concerns about the ability of Europe's leaders to substantially contain the euro-zone debt crisis.

"Both last night's announcement in Germany and (Tuesday's) Chinese figures have given the market reason to take profits, after unbridled optimism took hold of traders since the beginning of October," said Ben Taylor, sales trader at CMC Markets in Sydney. (WSJ)

Market Sentiment
Local optimism was tripped by the overnight steep sell-off of the US market and turned cautious again. The Intra-day Oscillator soaked deep in the red for the whole session but managed to trim some losses before closing. The Oscillator ended at -1,823.24; gained 941.74 when compares with its starting point. The Average recorded a loss of 2,047.67 due earlier sell-off.

At the end of the day, %K (Yellow) of MSCD computed as +112.88 (-392.69), %D (Red) +41.31 (-167.18) and the Histogram +167.52 (-23.99).

Both indicators hooked sharply down and %K almost fell to meet %D after the sharp drop. The Histogram printed its first short bar.

Conclusion
Local sentiment followed regional market fluctuated radically today. %K made a big U-turn and almost fell below %D. The big swing of the chart is a surprise at the back of yesterday’s robust sentiment.

Anyway, since %K is still above %D and both Indicators are remaining in the positive zone; no conclusion can be made at this juncture. But, the weak signal sent out by the Histogram signals that market should proceed into a consolidation. The buying momentum seems totally disappeared within a day.

We will take a closer look into tomorrow’s market movement.

Key Index

(Chart posted with courtesy of ChartNexus)

FBMKLCI fell but found its support at the uptrend line and closed at 1,439.94 today. The one-day fall will not alter the trend of the index especially the falling index halted when touching the support line.

FBMACE followed the key index to close with loss of 65 points. The ACE market might take a breather after moving up for 9 sessions. But time of consolidation should be short as uptrend remains intact.

(Note: Explanation for Intra-Day MSO and MSCD are archived under "Labels" at the lower portion of the sidebar.)