As indicated by A, the KLCI loss 4.10 points to close at 1330.17 points. Support for the KLCI is at 1320.29 WinChart Automatic Fibonacci Retracement while the resistance remains at 1350 to 1354 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands contracted 2%, suggesting that the KLCI is still trendless, while still consolidating, until the re-expansion of the Bollinger Bands. Nevertheless, with the KLCI below the Bollinger Middle Band, the immediate technical outlook is on the negative side.

As indicated by B, total market volume increased 9.1%, but still below the 40-day VMA level, suggesting that the market is still lightly participated, and this usually implies that the investors' confidence is relatively low. Therefore, the KLCI or the market is less likely to pick up any strength.

As circled at C, the Stochastic is falling and breaking below 50%, suggesting that the short term movement of the KLCI is weakening. If the Stochastic should break below 30%, it would be a short term bearish signal for the KLCI.

In conclusion, the Bollinger Bands suggests that the KLCI is still preparing for its new movement, and the it shall reveal its new movement when the Bollinger Bands re-expands, and the direction of the new movement shall be determined by the relative position of the KLCI, above or below 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