As lead by the over-night gain from the US market, the KLCI rose to its daily high of 1290.55 points on Tuesday, but closed at 1288.24 points, upped 12.49 points. As indicated by A, the KLCI is still resisted by the 1288 WinChart Automatic Fibonacci Retracement, while the support is still at 1257 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands expanded 37%, while the KLCI is still staying above the Bollinger Middle Band, therefore, the Bollinger Bands is now suggesting a bullish signal for the KLCI. If the Bollinger Bands should continue to expand, with the KLCI above the Bollinger Middle Band, more upside room is likely for the KLCI, and the next resistance for the KLCI is seen at 1300 psychological level.

As indicated by B, total market volume increased 64.9%, with volume clearly above the 40-day VMA level. This shows that the market participation is quite active as investors are taking part. In other words, the inflow of fresh capital has increased thus it helps to sustain the KLCI rally.

As circled at C, the Stochastic is still staying above 70% level, which is the short term bullish signal. Therefore, provided that the Stochastic should remain above 70% level, the short term movement of the KLCI is expected to be bullish biased.

In conclusion, the KLCI is set to rally with the current conditions. Provided that the Bollinger Bands is still expanding, and the KLCI stays above the Bollinger Middle Band, and also volume staying above the 40-day VMA 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 1997-2010 Straits Index (M) Sdn Bhd All rights reserved