Straits Index (M) Sdn Bhd
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Daily Market Analysis
Send to a Friend Composite Index 16/02/2011
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The KLCI opened below the 1500 level on Wednesday, but soon, it managed to claim and recover most of its losses, and at the close, the KLCI successfully returned to the positive territory, by a modest gain of 0.97 of a point or 0.06%, closing at 1506.30 points, as indicated by A. Support for the KLCI is still at 1498 or the 1500 psychological level while the resistance is at 1513.34.

Meanwhile, the Bollinger Bands expanded 5%, with the KLCI below the Bollinger Middle Band. Therefore, this suggests that the immediate technical outlook for the KLCI is still on the negative, but if the Bollinger Bands should begin to contract, the KLCI would consolidate.

As indicated by B, total market volume fell 5.07%, with volume above the 40-day Volume Moving Average. Generally, the market is still actively participated, and if the KLCI should continue to rebound with volume above the 40-day Volume Moving Average, the market sentiment is likely to recover from the recent sell down.

As indicated by C, the Stochastic has not broken above 30%, despite the rebound of the KLCI. This suggests that the short term movement of the KLCI is still weak, until a valid break out above 30% of the Stochastic.

In short, the KLCI is likely to consolidate, but as long as it is still trending within the T1 and T2 downtrend channel, the technical outlook shall remain on the negative side. Also, the 14, 21, 31 EMA is still serving as the dynamic resistance.

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