As indicated by A, the FBM KLCI tested the 1300 level on Friday, but it has failed to break above this psychological resistance. At the close, the KLCI gained 3.87 points at 1298.58 points. Therefore, the 1300 level is still the immediate resistance for the KLCI while the supports are still at 1288 followed by 1276 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands contracted 11%, suggesting that the KLCI is still in its consolidation stage. However, the KLCI is still above the Bollinger Middle Band, thus the immediate outlook for the KLCI is still positive. If the Bollinger Bands should re-expand again with the KLCI above the Bollinger Middle Band, the KLCI would resume its uptrend.

As indicated by B, total market volume declined 4.4%, with volume still firmly above the 40-day VMA level. This shows that the market is still actively participated, and the market sentiment in general is still positive.

As indicated by C, the Stochastic is still above 70% level, which suggests that the short term movement for the KLCI is still bullish bias. Technically, the short term movement for the KLCI is expected to be positive, until the Stochastic should break below 70% level.

Due to profit taking, the KLCI failed to break above the 1300 level, thus it is still an important resistance level for the KLCI. Nevertheless, with the KLCI above the Bollinger Middle Band, the immediate outlook for the KLCI has not turned bearish. If the Bollinger Bands should re-expand with the KLCI above the Bollinger Middle Band, the KLCI would resume its uptrend, and more upside room is expected.

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