As indicated by A, the Bollinger Bands Width expanded 47% with the KLCI above the Bollinger Middle Band, therefore, it is a bullish signal for the KLCI, as the KLCI rose 2.1%. Therefore, the KLCI has broken above the downtrend channel of T1 and T2. Other than the T1 support line, the 800 points is still an important support level. As long as the Bollinger Bands Width is still expanding, the bullish biased Bollinger Bands signal is expected to continue.

As indicated by B, total market volume increased 48.9%, which suggesting an improvement is market participation. The increase of market participation is definitely a positive sign. Nevertheless, volume above the 40-day VMA level is an important criteria for the KLCI to sustain its bullish movement.

As circled at C, the Stochastic is still rising while above the 70% level, which is the short term bullish region. Therefore, the market movement for the short term is now bullish biased. If the Stochastic should break below 70% level, it would mark an end to the short term bullish signal, and suggest a beginning of a technical correction.

In conclusion, the expansion of the Bollinger Bands Width and the increase of volume would definitely help lifting the market sentiment.

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