Straits Index (M) Sdn Bhd
WinChart Technical Analysis
Daily Market Analysis
Send to a Friend Composite Index 29/04/2011
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As indicated by A, the FBM KLCI opened higher, but began losing its gains during the day. The KLCI tested the 14, 21, 31 EMA but rebounded from it, and at the close, it only fell 0.35 of a point or 0.02%. This suggests that the 14, 21 ,31 EMA is still serving as the dynamic support for the FBMACE.

Meanwhile, the Bollinger Bands expanded 16%, with the KLCI above the Bollinger Middle Band. Therefore, the technical outlook for the KLCI remains on the positive side. Resistance stays at 1537.77 while the support is at 1525.67.

Despite the positive technical outlook, total market volume remains low. As indicated by B, total market volume stays below the 40-day Volume Moving Average, and this suggests that the market is still quiet, as investors are not feeling confident yet. Without sufficient market participation, the KLCI is less likely to regain its strength.

After touching 100% on Thursday, the Stochastic retreated on Friday, but managed to stay above 70%, and therefore, the Stochastic is still showing a short term bullish biased signal. (Study C)

In conclusion, despite some sign of improvement of the KLCI, the lower market volume remains the major set back to the KLCI improvement. Based on the past behavior of the KLCI, when volume is low, the KLCI (or the market) is likely to stay in its consolidation.

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