MALAYSIA KLSE COMP INDEX

Weakness in emerging market equities can be seen across the board. From commodity exporting South American countries indices to China’s trading partners in emerging Asia, all show downtrends.

Head and shoulder top is a bearish chart pattern and usually forms after prolonged uptrends. It acts as a reversal chart pattern and successful completion could result in a multi-month downtrend. Malaysia’s KLSE Composite Index formed a 2 year-long head and shoulder top. Support remains at 1,670 levels. Decisive break (on a weekly closing basis) below 1,670 will complete the head and shoulder top and result in a downtrend towards 1,400-1,450 area.