As indicated by A, the Bollinger Bands Width expanded another 15%, and the KLCI fell further on Wednesday, tested the 1000 psychological support level. Resistance for the KLCI remains at 1035 WinChart Automatic Fibonacci Retracement.

Meanwhile, with the gap on Tuesday still waiting to be filled, coupled with a chance of a pull-back effect, the KLCI is likely to rebound in the near term. Nevertheless, if the KLCI should rebound, the Bollinger Middle Band would be the first target, as it is the dynamic resistance for the KLCI. If the KLCI should remain below the Bollinger Middle Band, the outlook shall remain bearish biased.

As indicated by B, total market declined 5.8%, and the volume is now below the 40-day VMA level, suggesting the overall market participation is still low. Therefore, the KLCI is less likely to pick up its strength.

As circled at C, the Stochastic remains below 10% level, which suggests a very bearish short term movement. Nevertheless, with the Stochastic below 10% level, it is an over-sold signal, suggesting that a technical rebound is still due to take place in the near term.

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