On Thursday, the KLCI gained another 18.02 points or 1.31 points to close at 1393.69 points. As indicated by A, the KLCI is set to test the 1400 resistance as well as the 14, 21, 31 EMA dynamic resistance again. Support for the KLCI remains at 1310.

As indicated by B, total market volume increased 42.52%, with volume breaking above the 40-day volume moving average. This suggests some increased of buying interest as investors take advantage of the US and European markets rebound, together with the positive anticipation of the Budget 2012 which will be held tomorrow. If volume could stay above the 40-day volume moving average, it is likely to benefit the market, by improving the market sentiment.

As indicated by C, the Stochastic breaks above 70%, entering the short term bullish territory. Technically, if the Stochastic could stay above 70%, the positive short term movement of the KLCI is likely to continue.

Despite the rebound of the KLCI with the increased of market volume, the downtrend of the KLCI is still intact. There is not sign of a reversal yet. Although the increased of market volume is likely to benefit the market sentiment, the improvement of the KLCI performance is still highly subject to the performance of the regional markets. Technically, the ideal scenario for the KLCI is a sideways consolidation, as the prolong consolidation would gradually neutralizes the selling pressure. By then, if the KLCI should show sign of reversal (for instance, formation of higher-lows), then it would be a more reliable signal.

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