As the Dow Jones Industrial Average Index rebounded, it helped lifted the KLCI by gaining 9.23 points or 0.7%, to close at 1335.90. As indicated by A, the KLCI rebounded and tested the Bollinger Middle Band, but precisely resisted by the Bollinger Middle Band, and therefore, this is the immediate dynamic resistance for the KLCI.

Support for the KLCI is at 1318.53 while the resistance is at 1347.60 WinChart Automatic Fibonacci Retracement. The break out above the 1334 point is not certain yet, as the KLCI is still testing the Bollinger Middle Band.

As shown on the chart above, the Bollinger Bands contracted 3%, suggests that the KLCI is likely to consolidate, but immediate technical outlook shall remains negative unless the KLCI could break above the Bollinger Middle Band.

As indicated by B, total market volume declined 2%, with volume still below the 40-day VMA level. Nevertheless, this is quite normal for the market is in a consolidation mood.

As indicated by C, the Stochastic continue to rise and breaking above the 30% and 50% level, this is a signal of a technical rebound. If the Stochastic should break above and remain above 70% level, there is a good chance that the KLCI to resume its short term bullish movement.

In conclusion, the KLCI rebounded but failed to break above the Bollinger Middle Band. With the Bollinger Bands contracting, the KLCI is expected to consolidate, but immediate technical outlook remains weak unless the KLCI could break above the Bollinger Middle Band.

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