Straits Index (M) Sdn Bhd
WinChart Technical Analysis 
Daily Market analysis
PDF Send to a Friend Composite Index 14/04/2010
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The KLCI gained 1.37 points to close at 1335.89 points on Wednesday, this suggests that the 1334 WinChart Automatic Fibonacci Retracement is still the support for the KLCI. Other support is at 1318.53 while the resistance is at 1347.6 followed by 1354 WinChart Automatic Fibonacci Retracement. As shown on the chart above the L1 resistance line is also over-lapping with the 1347.6 level, therefore, theoretically, it is likely to be a stronger resistance.

As indicated by A, the KLCI breaks below the Bollinger Middle Band by margin, suggesting that the KLCI might be turning weaker. However, due to the contraction of the Bollinger Bands, the significance of this signal is reduced. The Bollinger Bands contracted 18%, suggesting that the KLCI is still consolidating.

As indicated by B, total market volume reduced 17.8% with volume slightly below the 40-day VMA level. This shows that the investors are staying on the sidelines while the market consolidate.

As circled at C, the MACD histogram falls below zero level, suggesting that the KLCI is now losing strength, and the weakening KLCI movement is likely to carry on until the MACD histogram should form a Rounding Bottom.

In conclusion, as indicated by the contraction of the Bollinger Bands, the KLCI is still consolidating, until the re-expansion of the Bollinger Bands. When the Bollinger Bands re-expands, it would mark an end to the consolidation, and the direction of the new movement shall be determined by the KLCI position above or below the Bollinger Middle Band.

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