As indicated by A, the KLCI lost its important support at 1089 WinChart Automatic Fibonacci Retracement, ended 14.94 points or 1.4% lower. The current support level for the KLCI is seen at 1035 WinChart Automatic Fibonacci Retracement while the immediate resistance would be the 1089 WinChart Automatic Fibonacci Retracement followed by the 1128 WinChart Automatic Fibonacci Retracement.

As shown on the chart, the Bollinger Bands Width expanded 13%, with the KLCI remain below the Bollinger Middle Band, therefore, a bearish signal for the KLCI. Anyway, the downside movement for the KLCI is expected to continue until the Bollinger Bands Width should contract again.

As indicated by B, total market volume increased 19.5%, despite the KLCI ended lower. This suggests a slight bargain buying for some blue chip counters and the KLCI rebounded slightly from its daily low. If the buying activities should continue, the KLCI should have a chance to rebound, or else, the increase of volume on Tuesday would increase the selling pressure if the KLCI should continue falling.

As circled at C, the MACD as well as the histogram are both below the zero level, suggesting that the current movement of the KLCI is indeed weak. The weak movement for the KLCI is expected to continue until the MACD histogram should tick up and forming a rounding bottom.

Since the KLCI has lost its support of the 1089 as well as the T1 line, the KLCI is likely to trend down. In short, unless the market is flooded by highly positive sentiment, the KLCI is less likely to pick up any strength.

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 1997-2008 Straits Index (M) Sdn Bhd All rights reserved