As indicated by A, after breaking above the 1325 WinChart Automatic Fibonacci Retracement , the KLCI gained another 6.13 points to close at 1332.87 points. Resistance for the KLCI is at 1350 while the support is at 1325 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands expanded 12%, with the KLCI above the Bollinger Middle Band, thus the immediate technical outlook is now positive. Technically, provided that the Bollinger Bands should continue to expand while the KLCI above the Bollinger Middle Band, the positive movement of the KLCI is expected to carry on.

As indicated by B, total market volume fell 5.9%, suggesting that the market confidence as a whole is still low. Therefore, the bullish biased market movement is still not assured. Generally, a true bullish market should have volume firmly above the 40-day VMA level.

As indicated by C, the Stochastic touched 100%, suggesting that the KLCI short term movement is indeed strong, but it is now over-heated. Therefore, a pull back is expected to take place in the near future. Nevertheless, provided that the Stochastic could remain above 70%, the short term movement of the KLCI is still on the bullish side.

In conclusion, the KLCI gained some position as the Bollinger Bands indicating bullish biased signal. In addition to that, the KLCI is now above the 14, 21, 31 EMA, thus the technical picture is positive. However, the lack of volume remain a major set back to the market sentiment as a whole.

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