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Wednesday, March 25, 2009

KLCI Technical Readings 25 Mar 2009

For Wednesday market, Pivot Profit methodology
indicates that the 1st and 2nd resistance levels will
be 887.1 & 896.4 with 1st and 2nd support levels at
871.9 & 865.9.

Chart wise: CI closed down on higher
volume ………. The gapped up scenario on
23/3/2009 was something good to see as it
indicated the urgency on the part of traders to
acquire stock positions. Furthermore, the market
rise on 23/3/2009 was accompanied by high
volume; thus, CI would have no problem to clear
the 880 hurdle to test 900 - 910 level. What to
watch for next in the CI? The factor to watch is
nothing more than market volume, as it will
determine the sustainability of the market in its run
up. High volume would suggest current trend had
momentum and should continue to carry the
market upward, and a falling volume in an upward
move shows a losing buying steam. On 24/3/2009,
traders with winning trades could not wait to take
advantage of higher market level to lock in a
portion of their profit.

Market may have “appeared” friendlier after the
previous day minor rally 923/3/2009); but, many
traders were seen not willing to take a passive
trading approach, they had apparently chosen to
become active traders in this time around. On
24/3/2009, total market volume traded was 0.67
billion shares against 0.65 billion shares
(23/3/2009), this higher market volume on a down
day basically suggested a weaker buying
environment on 24/3/2009. On examination of the
market behavior on 24/3/2009, the down close of
877.92 did not paint a friendly picture onto the
chart with resistance pegged at 900 - 910 and i
support at 850 level. The rebound from day low of
801.27 to close near day high at 832.44 may A
check of internal market strength on 24/3/2009
showed that buying strength weakened with strong
hand(s) seen disposing a portion of buying position.

An analysis of overall daily market action(s) on
24/3/2009 revealed that buying power(s) was
weaker compared to selling pressure(s), CI would
thus likely to trade below 875.26.

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