WinChart Technical Analysis
Daily Market analysis
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On Friday, the KLCI ended another 3.6 points lower to close at 1221.98 points. As indicated by A, the KLCI is still resisted by the 14, 21, 31 EMA, while the resistance at the Gap (1244 – 1280 level) is still a strong resistance for the KLCI. With the T1 downtrend line remains intact, the outlook for the KLCI is likely to be bearish biased. Nevertheless, support for the KLCI is still seen at around 1150 level. If the KLCI should rebound from the 1150 level, there is chance for the KLCI to form a double bottom pattern.
As indicated by B, total market volume dropped another 26.5%, and the volume again failed to break above the 40-day VMA level, suggesting that the market participation was indeed very low. The lower volume also implied a low inflow of fresh capital, thus the KLCI is likely to trend down or sideways. As mentioned in the above paragraph, if the KLCI should rebound from the 1150 level and form a double bottom pattern, volume would be the most important factor to determine the reliability of the double bottom. We shall monitor the formation of the KLCI from now on.
As circled at C, the Stochastic continue falling and now showing a short term neutral signal. Therefore, the short term market movement for the KLCI is at neutral.
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