Straits Index (M) Sdn Bhd
WinChart Technical Analysis
Daily Market Analysis
Send to a Friend Composite Index 24/09/2010
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As indicated by A, the FBM KLCI opened gap down of 5.06 points on Friday, and had its intra-day low reaching 1445.33 points, but the KLCI managed to regain some of its losses to close at 1451.19 points, losing 6.89 points for the day. Resistance for the FBMACE is at 1480 level while the support are at 1436 followed by 1424 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the KLCI fell below the Bollinger Middle Band, with the immediate technical outlook turning slightly negative, however, the Bollinger Bands is contracting, thus suggesting that the KLCI might be consolidating, until the Bollinger Bands should re-expands.

As indicated by B, total market volume surged 72.8%, which marked an 8 months new high. This suggests some increased of bargain buying despite profit taking activities, and fortunately, the KLCI losses for the day was rather mild, thus there are no panic selling detected yet. However, if the KLCI should start falling again, with huge volume, the selling pressure is likely to increase.

As indicated by C, the Stochastic break below 50%, suggesting that the KLCI short term is weakening. If the Stochastic should break below 30%, it would be a short term bearish signal for the KLCI.

In conclusion, the KLCI might be losing strength, but for the mid to longer term view, the uptrend remains intact with the 14, 21, 31 EMA still supporting the KLCI. Therefore, the recent retreat of the KLCI is only a technical correction.

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