Asian Markets Closed Lower After Disappointing China’s Trade Data.

Asian markets closed lower following the release of Chinese’s government data that showed December exports dropped lower-than-expected, triggering concerns of the potential slowdown in the World’s second-largest economy.

On the local front, the FBMKLCI fell 7.06 points (-0.42%) to close at 1,676.16 in tandem with negative market breadth where 557 bears outpacing 286 bulls while 292 counters unchanged.

We continue to believe the technical outlook of the index is still leaning towards downside bias as its shorter-term SMAs remains below its longer-term SMAs.

Continuous negative momentum will see it trending closer to its support level at 1,615 (S1) with a break below, will then see the index capitulate towards 1,600 (S2).

Should the index be able to close above the 1,700 (R1) level, outlook will then be bullish with next resistance found at 1,750 (R2).

Wall Street weighed by slowdown in China’s exports

Wall Street declined as the unexpected drop in China’s exports sparked worries of further weakening of the world’s secondlargest economy and faltering global economic demand.

The DJIA fell 86.11 points (-0.36%) to close at 23,909.84.

Overall, the technical outlook of the index remains bearish as it still trading below its 50 and 100-day SMAs.

Until more concrete signs of an improvement in the broad market, the index is likely to fall further to its supports at 21,800 (S1) and 21,200 (S2).

Conversely, resistance levels can be found at 24,200 (R1) and 25,000 (R2).

Daily technical highlights – (PENTA, HLIND)

PENTA (Not Rated)

• PENTA fell 6.0 sen (-2.19%) to close at RM2.68 yesterday.
• After experiencing downtrend since November 2018, the share started the New Year with a mini rally. However, yesterday’s close saw the share closed below the 20-day SMA.
• We note that shorter-term SMAs are trading below longer-term SMAs, indicating downwards sentiment. Coupled with the lack of positive upticks from key momentum indicators, we opine that there is more downside room.
• Should selling momentum persist, we expect to find supports at RM2.49 (S1) and RM2.25 (S2).
• Conversely, resistance levels can be found at RM2.87 (R1) and RM3.26 (R2).

HLIND (Not Rated)

• HLIND gained 21.0 sen (+2.34%) last night to close at RM9.17.
• Chart-wise, HLIND experienced sharp decline during the early week of December 2018, falling to a low of RM8.50. Since then, the share appears to be slowly recovering.
• Momentum indicators are currently positive while the share has also broken past the 20-day SMAs.
• Expect the share to test its immediate resistance at RM9.30 (R1) where a break above it will see next resistance at RM9.50 (R2).
• Meanwhile, supports can be found at RM8.80 (S1) and RM8.50 (S2) should the positive momentum taper off.

Source: Kenanga Research - 15 Jan 2019