On Tuesday, the FBMACE was traded in a narrow range, closing 11.64 points or 0.3% lower. As indicated by A, the FBMACE is still supported by the 4302 WinChart Automatic Fibonacci Retracement, and therefore, the 4302 WinChart Automatic Fibonacci Retracement is still the support for the FBMACE while the resistance remains at 4417 WinChart Automatic Fibonacci Retracement.

As shown on the chart, the Bollinger Bands contracted another 43%, and the Bollinger Bands width is now very narrow. Generally, when the band width is at very narrow, it implies that the consolidation is almost near the end, and the re-expansion of the Bollinger Bands is around the corner. When the Bollinger Bands re-expands, it would be a signal suggesting a beginning of a new movement.

As circled at B, the Stochastic is still floating around 50% level, due to the directionless movement of the FBMACE. Nevertheless, if the Stochastic should start falling, and breaking below 30% level, it would be a short term bearish signal for the FBMACE.

As indicated by C, the MACD histogram is still rising, while the Rounding Bottom is still in place. However, the MACD histogram has not broken above the zero level, and furthermore, the rising momentum of the MACD histogram is actually slowing down. Therefore, it pays to watch out for a Rounding Top formation, for if the MACD histogram should form a Rounding Top, it would be a signal suggesting a weakening movement for the FBMACE.

Since the Bollinger Bands is very narrow now, it is about to start its new movement which has been prepared for a period of time. When the Bollinger Bands should re-expand with the FBMACE below the Bollinger Middle Band, it would be a bearish signal, and the next support for the FBMACE is seen at 4187 WinChart Automatic Fibonacci Retracement . Other wise, if the Bollinger Bands should expands with the FBMACE breaking above the Bollinger Middle Band, it would be a bullish signal for the FBMACE and it is likely that the FBMACE to test the 4417 WinChart Automatic Fibonacci Retracement.

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