On Monday, the KLCI retested the Bollinger Middle Band, and retreated soon after resisted by the Bollinger Middle Band. Therefore, the Bollinger Middle Band is still an important resistance level for the KLCI. (Study A). Other resistance for the KLCI is at 885 WinChart Automatic Fibonacci Retracement while the support for the KLCI is still at 801 WinChart Automatic Fibonacci Retracement.

As shown on the chart, the Bollinger Bands Width expanded 10% on Monday, with the KLCI remained below the Bollinger Middle Band. Therefore, the immediate outlook for the KLCI is still bearish biased. If the Bollinger Bands Width should continue to expands, there are more downside risk for the KLCI.

As indicated by B, total market volume declined 32%, and the volume is still below the 40-day VMA level. This shows that the market is indeed very quiet as investors are still waiting on the sidelines.

As circled at C, the Stochastic dropped quickly on Monday, breaking below 30% level and reached the 0% level. This shows that the market movement for the short term is now back to bearish biased. But since the Stochastic is now touching 0% level, this shows that the short term KLCI movement has gone over-sold, and therefore, a technical rebound is likely to take place in the near future.

Generally, the bearish view of the KLCI is still intact, except for a chance of a technical rebound in the near future as the short term is slightly over-sold.

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