As indicated by L1, the FBM KLCI retreated after testing the L1 resistance line, closing 12.16 points or 0.9% lower, to close at 1332.93 points. If the KLCI should fail to return to above the 1334 WinChart Automatic Fibonacci Retracement, the next support is at 1308 WinChart Automatic Fibonacci Retracement.

As shown on the chart, the Bollinger Bands contracted 9%, suggesting that the KLCI remains in consolidation stage, and it is set to test the Bollinger Middle Band, as indicated by A. If the KLCI should rebound from the Bollinger Middle Band, there is a good chance the KLCI would resume its uptrend.

As indicated by B, total market volume increased 12.7%, suggesting some increased of selling pressure. If the KLCI should continue falling with high volume, it would further dampen the market sentiment.

As indicated by C, the Stochastic breaks below 70% level, suggesting a beginning of a technical correction. The Stochastic has to return to above 70%, in order to resume the KLCI's short term bullishness.

In conclusion, the KLCI ended lower as a technical correction, and the KLCI is set to test its target of the Bollinger Middle Band. If the KLCI should rebound from the Bollinger Middle Band or the 14, 21, 31 EMA, there is a good chance for the KLCI to resume its uptrend. On the other hand, if the KLCI should break below the Bollinger Middle Band, the immediate technical outlook shall turn negative.

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