2014, a brand new year for the markets, or is it?

The new year of 2014 has kicked in and it's been a great run for 2013. Both KLCI and FKLI recorded historical highs and from technical point of view, seems to stage more bullish moves in 2014. There are many worries for 2014-2015 as some  say the recession will hit at the last quarter of 2014 which spells the worst recession in the history of mankind. With stimulus still on going, although reduced by 10b, many still take this as a high risk move as govt debts are still at large and seemingly increasing.

On the other hand, USDMYR had a "end-of-the-year" push reaching 3.3x which gave FCPO a bullish move. Adding that this month is the month of the Chinese Lunar New Year may spur more imports from China which in turn could improve exports and also reduce stocks. Nevertheless, 2014 eve was defiant on its fundamentals probably due to rumors on increase exports for Jan 2014. Weather concerns may play a smaller roll now as during the start of the year, rains start to diminish and stocks will increase. 

Nevertheless, lets take a look at the charts for both of these markets technically wise.

FCPO

FCPO had a crazy volatile movement at the last month of 2013. However, the last  day of 2013 (31st Dec 2013) showed some buying power storming up FCPO to 2659 at the end of day. Both MACD-H and MACD lines show positive bullish turns as MACD-H has ticked up to the positive region indicating prices are on the bullish side. MACD lines have crossed upwards from its signal line indicating the bulls have taken over. Stochastics have shown a steady climb and poised to test its resistance at 90. Thin volume was at the last few days of Dec but on the 31st Dec 2013, there was a higher volume indicating that probably the bulls are preparing to push on in 2014 and in line with the Chinese Lunar New Year. The long white candle on 31st Dec 2013 shows engulfments of the 3 candles the day before which could spell strong bullish movements for the coming days. Candlestick stays way above all levels (12,22 and 32) EMA showing that the bull trend is still in tact.

FKLI

FKLI also show strong movements for the past few days. Probably due to good regional news on Jobs data, the minimum taper of the stimulus and most importantly the window dressing that occurs end of the year has took a boost for FKLI and KLCI. However, MACD-H may form a bearish divergence as prices are rising against a lower MACD-H curve. Having said that, MACD lines show otherwise and is still on a bullish move as the MACD average lines have moved upwards from its signal line. Stochastics showing that it had reached its resistance of 90 and a lower volume on the rise may detriment the bull move further as lesser participants are actually going for the bulls. However, thin volume due to the holidays could be the reason why too and may not be of impact on the movement. Candlesticks are trading strongly above all EMA levels (12,22 and 32) showing that it still has strength to push on but may retrace a little before continuing the bull as it has been flirting around its channel top band.

Personal View:

FCPO: Buy on weakness but if movements are weak or sideways, take quick intraday shorts with quick cut losses
FKLI: Plot supports and take longs there as there are most likely be retracements from strong resistances. However, if prices have hit strong resistances, prepare for some retracements and for those who are in line with their risk management, intraday shorts can be implemented.

HAPPY NEW YEAR AND MAY EVERYONE BE PROFITABLE!