Winchart Technical Analysis
Daily Market analysis
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As indicated by A, the KLCI had a daily high reaching 1416.97, which is another all time new high before closing at 1412.79 points and forming a “Spinning Top” candlestick pattern. This suggests some profit taking activities, and therefore, we suspect a temporary mild resistance at the 1416.97 Fibonacci Line. Nevertheless, the 14, 21, 31 EMA is still serving as the dynamic support for the KLCI, so as the Bollinger Middle Band.
As indicated by B, total market volume declined 14.7% on Tuesday, but the volume remains above the 40-day VMA level. This suggests that the overall market is still very active, and provided that the volume should remains higher above the 40-day VMA level, the sustainability of the bullish sentiment would be better.
As circled at C, the Stochastic %D line breached above the 90% level, entering the short term over-bought region. This shows that the short term movement for the KLCI was indeed bullish but however, slightly over-heated. Therefore, there is a chance of a technical correction. If the Stochastic %K line should fall below the 90% level, it would suggest a beginning of a technical correction.
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