As indicated by A, the KLCI filled the gap which took place on Tuesday as profit taking begins, this is a typical reaction for the KLCI has been dropping for quite a long time and any quick rebound would easily trigger profit taking. Resistance for the KLCI is now at 982.5 (23.6% WinChart Automatic Fibonacci Retracement) while the support is at 926 WinChart Automatic Fibonacci Retracement.

As shown on the chart, the KLCI failed to test the Bollinger Middle Band and started to decline, this shows that the Bollinger Middle Band is still the dynamic resistance for the KLCI. In short, as long as the KLCI is still resisted by the Bollinger Middle Band, the immediate outlook for the KLCI is still bearish biased. Meanwhile, the Bollinger Bands Width contracted 1%, suggesting that the KLCI is likely to consolidate.

As indicated by B, total market volume declined 14.7%, while still above 40-day VMA level. This suggests that the overall market is well-participated.

As circled at C, the Stochastic is breaking below 30% level again, and therefore, the Stochastic is showing a short term bearish signal for the KLCI again. Unless the Stochastic could successfully break above 30% level, the market movement for the short term is likely to be bearish biased.

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