As indicated by A, the FBMACE opened at above the 4601 WinChart Automatic Fibonacci Retracement, but as profit taking took place, the FBMACE started falling, and at the close, the FBMACE lost 48.91 points or 1.1%, to end the trading day at 4539.28 points. Therefore, the 4601 WinChart Automatic Fibonacci Retracement is still the resistance for the FBMACE while the support is at 4485 WinChart Automatic Fibonacci Retracement followed by the 14, 21, 31 EMA.

Meanwhile, the Bollinger Bands contracted 7% on Wednesday, suggesting that the FBMACE is about to consolidate. If the Bollinger Bands should continue to contract, the FBMACE is expected to move sideways while the Bollinger Middle Band is also serving as the dynamic support.

Despite the FBMACE showing a sign of a technical correction or a consolidation, the Stochastic is still above the 70% level, as circled at B. Technically, if the Stochastic should break below 70% level, it would be a beginning of a technical correction.

As circled at C, the MACD histogram ticked lower, which implied that the MACD histogram might be forming a Rounding Top. If the MACD histogram should form a Rounding Top, it would be a signal suggesting that the FBMACE is entering a consolidation stage, or it might be weakening.

Since the FBMACE picked its strength from the 29th of December, 2009, it has gained up to 425 points or 10%. Therefore, it is rather normal to have a profit taking activities. Nevertheless, provided that the FBMACE could rebound from the Bollinger Middle Band or the 14, 21, 31 EMA after the consolidation or technical correction, the uptrend is expected to resume.

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