As shown on the chart above, the Bollinger Bands contracted 8%, suggesting that the KLCI is entering its consolidation stage. If the KLCI should break below the Bollinger Middle Band, the immediate technical outlook shall turn negative.

As indicated by B, total market volume fell 25%, with volume still above the 40-day VMA level. Generally, the market is still actively participated, but if volume should increased when the KLCI is falling, it suggests that the selling pressure is increasing.

As indicated by C, the MACD fell below the trigger line, and triggered a negative signal, suggesting a weakening movement for the KLCI. However, the mid to long term movement of the KLCI is still bullish biased as the MACD is still above the zero level.

At the same time, the Stochastic, which stayed above the 70% for about two months, fell below 70%, ended its short term bullish signal, suggesting a beginning of a technical correction.

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