The KLCI extended its losses on Thursday, but managed to find its support near the 1302 WinChart Automatic Fibonacci Retracement, which is also very closed to the 1300 psychological level. Resistance for the KLCI remains at 1320 followed by 1350 WinChart Automatic Fibonacci Retracement.

As indicated by A, after a huge fall yesterday, the KLCI has broken below the 10-day and 20-day Bollinger Lower Band, which suggests that the falling was over-sold, thus a short term pull-back effect is expected to take place, and the target of the pull back is usually at the Bollinger Middle Band.

As indicated by B, total market volume declined 2.1%, with volume staying below the 40-day VMA level. This shows that the market is indeed quiet, and market confidence is also low. Thus, the market is less likely to pick up strength.

As circled at C, the Stochastic is falling to 10%, suggesting some slightly over-sold signal, and a technical rebound is expected to take place. But still, with the Stochastic below 30%, the market movement of the short term is still on the bearish side.

The KLCI movement was at a narrow range on Thursday, and testing the 1302 support level. With some over-sold condition, the KLCI is likely to have a technical rebound, but overall technical outlook shall remains weak.

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