Asian markets slips on signs of U.S. economy slowdown

• Asian markets ended mostly lower last Friday following the release of data that showed signs of U.S. economy slowing down.

• Similarly, the FBMKLCI slipped 9.26 points (-0.54%) to close marginally lower at 1,721.42, bringing WoW gain to 1.93%.

• We believe the overall outlook of the index has turned positive given that the index has decisively broken above its 100-day SMA despite the index may see some short-term retracement or consolidation.

• Continued buying momentum could see the index trending higher to its resistances at 1,800 (R1) and 1,830 (R2).

• Should there be negative developments from the trade talks, support levels can be identified at 1,700 (S1) and 1,630 (S2).

Dow retakes 26,000 level on increased optimism

• Wall Street closed higher last week as investors became increasingly more hopeful on a trade deal.

• Similarly, the Dow climbed 181.18 points (+0.70%) to close at 26,031.81, registering a WoW gain of 0.57%.

• Overall, the technical outlook remains positive as the uptrend is still intact, underpinned by the index continued to stay above all key SMAs. However, in the short-term, we believe a minor retracement may happen as the index has not retraced since late Dec-2018. RSI and stochastic are also displaying near overbought signals.

• Should a retracement happen, we expect the index to find support at 24,900 (S1) and 24,100 (S2).

• Conversely, should the buying momentum continue, we opine that the index should test its next resistance at 26,200 (R1), where a break above would see the index heading towards 26,600 (R2).

Source: Kenanga Research - 25 Feb 2019