As indicated by A, the FBM KLCI ended 4.48 points, while still resisted by the 1186 WinChart Automatic Fibonacci Retracement. Therefore, the 1186 WinChart Automatic Fibonacci Retracement resistance remains in place while the support is still at 1163 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands Width contracted only 1%, compared to the previous 17%, suggesting that the Bollinger Bands Width might be expanding soon and the consolidation might be coming to an end. If the Bollinger Bands Width should re-expand, it would be a beginning of a new movement, and the direction of the new movement shall be determined by the KLCI above or below the Bollinger Middle Band.

As indicated by B, total market volume increased 11%, while getting closer to the 40-day VMA level. If the volume should reach the 40-day VMA level, it would benefit the market movement.

The MACD histogram has been moving flat around the zero level, suggesting that the MACD histogram may stop falling, and if the MACD histogram should rebound and form a Rounding Bottom, it would suggesting an end to the KLCI consolidation, and a chance to regain some strength.

With the Bollinger Bands Width still contracting, the KLCI consolidation is still intact while preparing for a new movement, as we are still waiting for the expansion of the Bollinger Bands Width. Meanwhile, with Secondary indicators such as the MACD histogram might be forming a Rounding Bottom, the consolidation is expected to end soon and the KLCI might regain its strength, provided that the external factors remain unchanged.

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 1997-2009 Straits Index (M) Sdn Bhd All rights reserved