On Monday, the FBM KLCI fell 4.84 points, to close at 1265.36 points. The KLCI breaks below the 1270 WinChart Automatic Fibonacci Retracement, and the support is now at 1257 WinChart Automatic Fibonacci Retracement while the resistance is still at 1288 followed by 1300 psychological level.

As indicated by A, the KLCI also break below the Bollinger Middle Band dynamic support, but luckily the Bollinger Bands has not expanded, and it has not confirmed a bearish movement of the KLCI yet.

As indicated by B, total market volume increased slightly, but remain below the 40-day VMA level, which is quiet normal for the KLCI is still consolidating. Technically speaking, if the KLCI should start falling, with increased volume, it would be a signal suggesting an increased of selling pressure.

As circled at C, the Stochastic breaks below 70% level, suggesting an end to the short term bullishness of the KLCI. This is an early signal suggesting a weakness of the KLCI. If the Stochastic should also break below 30% level, it would be a short term bearish signal for the KLCI.

In short, with the KLCI breaking below the Bollinger Middle Band, the immediate outlook for the KLCI is now turning weaker. Nonetheless, the Bollinger Bands has not expanded, thus signals has to be confirmed with an expansion of the Bollinger Bands. If the KLCI should return to above the Bollinger Middle Band in the short term, there is still a chance for the KLCI to avoid the bearish movement.

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