Due to the over-night correction of the US market, the KLCI experienced a slightly stronger selling pressure on Thursday, with its intra-day low reaching 1544.96 points. However, the KLCI started to regain some of its earlier losses in the afternoon session, while managed to close slightly above the 1551 WinChart automatic Fibonacci retracement. Support for the KLCI remains at 1551 WinChart automatic Fibonacci retracement while the resistance is at 14, 21, 31 EMA dynamic resistance followed by the 1568 WinChart automatic Fibonacci retracement.

As indicated by B, total market volume increased about 1% on Thursday, with volume still above the 40-day volume moving average. This suggests that the market is actively participated. However, due to an obvious higher number of losers over winners, it suggests that the selling pressure was rather strong on Thursday.

As indicated by C, the Stochastic stays below the 30% level, and this suggests that the short term movement of the KLCI is still weak.

In conclusion, after breaking below the L1 uptrend line, the KLCI short term movement has been staying week, and together with the sensitive reaction of regional markets to the worry of default of the US, the KLCI is less likely to regain its strength. Technically, as long as the KLCI is still below the 14, 21, 31 EMA, the technical outlook for the KLCI shall stay negative. Next support for the KLCI is at 1500 psychological level.

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