Composite Index Daily Technical Analysis 29/01/2009
As indicated by A, the KLCI opened higher as the regional markets are mostly higher, but the KLCI was precisely resisted by the 887 WinChart Automatic Fibonacci Retracement resistance, which is also the Bollinger Middle Band dynamic resistance. Therefore, the 887 resistance remains intact while the supports are still at 869 and 853 WinChart Automatic Fibonacci Retracement.
As shown on the chart above, the Bollinger Bands Width is still contracting, suggesting that the KLCI is still in its consolidation. Still, breaking above the Bollinger Middle Band is a must for the KLCI, if the KLCI was to regain its positive position.
As indicated by B, total market volume increased 34.6%, but still below the 40-day VMA level. Therefore, this shows that the overall market is still lightly participated, and the KLCI is less likely to pick up any strength without sufficient market participation.
As circled at C, the Stochastic is now breaking above 30% level, leaving the short term bearish region. This is a signal suggesting a technical rebound for the KLCI. However, in order to signal a bullish signal, the Stochastic would have to break above 70%.
Despite the increased of volume as well as some gains on Thursday, it is still considered as a technical rebound for the KLCI is still resisted by the Bollinger Middle Band. In short, if the KLCI should break above the Bollinger Middle Band with significant increased of volume, chances for the KLCI to break away the bearish biased movement would be higher.
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