As indicated by A, the KLCI had its intra-day low reaching 1358.35 points, but it rebounded from the Bollinger Middle Band, gaining only 0.21 of a point, to close at 1360.66 points. Support remains at 1354 WinChart Automatic Fibonacci Retracement while the resistance is at 1400 level

As shown on the chart above, the Bollinger Bands contracted 27%, suggesting that the KLCI is still consolidating while preparing for its new movement. If the Bollinger Bands should re-expand, it would mark an end to the consolidation, and a beginning of a new movement.

As indicated by B, total market volume fell 19.3%, with volume below the 40-day VMA level. This suggests that the market participation has dropped, as most investors are staying on the sideline while the market is consolidating.

As indicated by C, the Stochastic rebounded slightly while still staying above 70%, in the short term bullish territory. Therefore, the short term movement of the KLCI is still on the positive side.

Since the Bollinger Bands is still contracting, the direction of the KLCI is temporary unclear, and therefore, we still have to wait until the Bollinger Bands expands, then we shall determine the new direction by the position of the KLCI above or below the Bollinger Middle Band. Nevertheless, with the KLCI above the 14, 21, 31 EMA, the immediate technical outlook is still bullish biased.

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