As indicated by A, the FBM KLCI breaks above the Bollinger Middle Band on Monday, suggesting an improvement of the KLCI short term movement. With the KLCI now above the Bollinger Middle Band, the immediate outlook for the KLCI is positive, and the Bollinger Middle Band is serving as the dynamic support, with the 1257 WinChart Automatic Fibonacci Retracement still serving as the support. Resistance for the KLCI is at 1288 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands expanded 5%, suggesting the KLCI is likely to regain some strength. If the Bollinger Bands should continue to expand, the KLCI is likely to test the 1288 resistance level.

As indicated by B, despite the improvement of the KLCI movement, total market volume only increased 19.6%, while further below the 40-day VMA level. This shows that the overall market participation is still very low, and the market volume has not reached an ideal level for a healthy uptrend.

As circled at C, the Stochastic breaks above the 70% level, entering the short term bullish territory. If the Stochastic should remain above 70% level, the short term bullish movement of the KLCI is expected to carry on.

In conclusion, the KLCI has returned to above the Bollinger Middle Band, and is set to regain some strength. If the Bollinger Bands should continue to expand, with the KLCI remains above the Bollinger Middle Band, and continue increased of volume, the year-end window dressing effect is expected, and the KLCI could test the 1288 level.

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