The KLCI ended marginally higher on Friday, while the Bollinger Bands continues to expand (+26%). The KLCI closed 3.73 points higher while the resistance is still at 1248 WinChart Automatic Fibonacci Retracement, and the support remains at 1200 psychological level.

As indicated by A, the KLCI formed a candlestick with an upper shadow, this suggests that some profit taking activities took place. But still, as long as the KLCI is still supported by the Bollinger Middle Band, the bullish biased movement is likely to continue.

As indicated by B, total market volume declined 13.6%, and as a result, the volume failed to stay above the 40-day VMA level. This shows that the market participation has declined, as investors confidence is relatively lower and choose to stay on the sidelines instead. Generally, volume has to be above the 40-day VMA level in order to sustain the bullish market sentiment.

As indicated by C, the Stochastic retreated after hitting 100%, suggesting that the KLCI short term is still over-heated, and therefore, profit taking is expected. Nonetheless, provided that the Stochastic is still above 70% level, the market movement for the short term is still bullish biased.

After rallied for just a couple of days, profit taking took place, and volume declined as investors are still not participating fully. As a result, the KLCI only rose marginally on Friday. But still, with the KLCI still supported by the Bollinger Middle Band, the outlook for the KLCI is still on the positive side if the Bollinger Bands should continue to expand.

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