FBMKLCI to create all time highs in 2017??!!
Bogus or Bagus?
(chart courtesy of UOB KayHian Techanalyzer)
FBMKLCI is currently extending the Intermediate wave (5) of Primary wave ((3)) of Cycle wave V as shown in diagram above (elliottwave INTERNATIONAL, 2017), {wave count based on "2017 STATE of the GLOBAL MARKETS" report by elliottwave INTERNATIONAL}.
Market outlook: FBMKLCI embarked the Cycle Wave V when it bottomed in 2001, right after the year 2000 crash. Since then FBMKLCI has been challenging higher levels, with the 2008 crisis concluding the Primary wave ((2)) correction of Cycle Wave V.
As the motive phase always occur in a five-wave manner, FBMKLCI is expected to stage an powerful upleg [as the Intermediate wave (5)], to conclude the five-wave uptrend that began since 2009.
(chart courtesy of UOB KayHian Techanalyzer)
A closer look at the chart as shown in diagram above, reveals that FBMKLCI indeed had bottomed in Aug 2015 following an A-B-C correction from the Jul 2014 peak. Since Aug 2015, FBMKLCI has been trapped in a consolidation with well defined upper boundary at 1730, and lower boundary near 1600 level.
Summing up, FBMKLCI will break both 1730 and 1750 levels to confirm its intention to skyrocket in 2017.
A breakout from 1730 level will mark the completion of the 1600-1730 box consolidation of FBMKLCI. A further breakout of 1750 level (weekly 200SMA) will levitate FBMKLCI into the bullish territory.(chart courtesy of UOB KayHian Techanalyzer)
The bullish view of FBMKLCI in 2017 is further supported by the highlights in the chart above. FBMKLCI is currently undergoing a Bollinger Bands squeeze in the monthly chart (circled in the chart above). This implied that the volatility of FBMKLCI has been decreasing in the last 20 months, as the box consolidation (which began in Oct 2015) unfolds.
The last Bollinger squeeze of FBMKLCI occurred in Q2 and Q3 of 2006 (circled in chart above), which was ensued by a 55% rally in FBMKLCI.
Almost similar to the last bollinger squeeze, the current bollinger squeeze also unfolds with bullish MACD crossover.
A back-test of bullish MACD crossover, highlighted by the square boxes in diagram above, suggests that bullish rally shall ensue with a bullish MACD crossover in the monthly chart.
"FBMKLCI to at least break the 2017 level in 2017"
Is it Bogus, or is it really Bagus?
It's up to my fellow readers to decide.
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