As pointed by A, after breaking above the 14, 21, 31 EMA on Monday, the KLCI started to retreat on Tuesday with a daily high touching 1214.15 points. The 1215 to 1220 level was the gap which took place on the 28th of February. Therefore, the KLCI is now temporary resisted by the psychological level of the gap at 1215 – 1220 level. If the KLCI fell below 14, 21, 31 EMA, the EMA shall resume its role as the descending dynamic resistance to the KLCI.

Total market volume on Tuesday gained 21.7%, but remained below the 40 days VMA level. This suggested that the overall market is still lightly participated. This also suggested that the break out of Monday was not confirmed, due to insufficient volume. If the market volume remained below the 40 days VMA level, the outlook for the KLCI is likely to stay sideways to negative bias. (Study B)

As indicated by C, the MACD histogram continued rising, suggested a technical rebound, or a weakening bearish signal. However, the MACD has not triggered any bullish signal. Therefore, if the MACD histogram started falling, and formed a rounding top, it would suggested a resume of the bearish signal. (Study C)

Find this analysis useful? Why not share it with others? Click Here to send this to a friend

Straits Index (M) Sdn Bhd
No. 16, Jalan LP 1A / 5, Lestari Perdana,
43300 Seri Kembangan, Selangor
Hotline: (03) 8941 6828  (5 lines)   Fax: (03) 8941 9828    
Email: info@straitsindex.com
© Copyright 1997-2007 Straits Index (M) Sdn Bhd All rights reserved