On Friday, the FBMACE rebounded 49.02 points or 1.1%, to close at 4436.62 points. Support for the FBMACE is at 4302 WinChart Automatic Fibonacci Retracement while the resistances are found at 4560 WinChart Automatic Fibonacci Retracement as well as the Bollinger Middle Band dynamic resistance.

As shown on the chart, the Bollinger Bands only expanded 4%, this implies that the Bollinger Bands might be contracting, and if the Bollinger Bands should contract, the consolidation of the FBMACE is likely to continue. As indicated by A, the Bollinger Middle Band is the target of the rebound of the FBMACE. If the FBMACE should break above the Bollinger Middle Band, there is a chance of the FBMACE to regain some strength.

As circled at B, the Stochastic rebounded after breaking below 10% level. However, the Stochastic is still staying below 30% level, which is in the short term bearish territory. This suggests that the short term market movement for the FBMACE is still weak.

As circled at C, despite the rebound of the FBMACE, the MACD has not shown any sign of a Rounding Bottom formation. Therefore, this suggests that the FBMACE is still on the weakening movement, while no sign of gaining strength, until the MACD histogram should form a Rounding Bottom.

With the FBMACE below the Bollinger Middle Band, and the Stochastic and MACD histogram are also showing no sign of improvement yet, the rebound on Friday is likely to be a reaction of a Pull-back effect after some short term over-sold.

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 1997-2009 Straits Index (M) Sdn Bhd All rights reserved