As indicated by A, the KLCI is still resisted by the Bollinger Middle Band on Friday, and therefore, the Bollinger Middle Band dynamic resistance remains in place. If the KLCI should break above the Bollinger Middle Band, the immediate outlook would improve, but still, we will need to wait until the Bollinger Bands Width to expands with the KLCI maintain above the Bollinger Middle Band in order to signal any bullish signal.

As shown on the chart above, the Bollinger Bands Width contracts another 3%, suggesting the KLCI is still in its consolidation stage. Which in another words, suggesting that the KLCI is gearing up for a new movement. Support for the KLCI is still at 800 points while the resistance is at 887 WinChart Automatic Fibonacci Retracement.

As indicated by B, total market volume declined 17.5%, with volume below the 40-day VMA level. This shows that the overall market participation is relatively low as most investors are still on the side lines.

As indicated by C, the MACD histogram is forming a rounding bottom, suggesting that the KLCI short term movement is gaining strength. If the MACD histogram should continue rising, the KLCI movement is likely to improve.

In short, the KLCI is still consolidating, and we are still waiting for the Bollinger Bands Width to expands to give a clearer signal of the next direction.

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