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Sunday, April 26, 2009

TECHNICAL ANALYSIS Composite Index 24/04/2009 / 综合指数 2009年 4月 24日

Composite Index Daily Technical Analysis 24/04/2009
As indicated by A, the KLCI opened gap up on Friday, closing 14.04 points higher to 992.68 points, forming a Continuous Gap. The KLCI is now precisely resisted by the 993 Fibonacci Retracement, while the Continuous Gap suggests that the KLCI rally is speeding up while getting closer to its peak, and there is risk of a technical correction in near term.

Resistance for the KLCI is still at 993 FR and 1000 psychological level, while the Bollinger Middle Band and T1 uptrend line are still the dynamic support for the KLCI.

As indicated by A, total market volume increased significantly (52.4%) on Friday, marking a 18 months new high. This suggests that the market is indeed well-participated, thus a positive note to the overall performance of the KLCI. Generally, provided that the volume is still above the 40-day VMA level, the KLCI uptrend is likely to continue.

As circled at C, the Stochastic hits 100% again, suggesting the KLCI is over-bought again. This is a sign of a short term over-heated condition, and therefore, the KLCI is expected to have a consolidation or a technical correction in the near future. However, as long as the Stochastic is still above 70%, the short term movement of the KLCI is still bullish biased.

Although the KLCI had a Continuous Gap, it does not mean that the rally of the KLCI is going to end, it is merely a over-bought signal suggesting a correction is likely to take place. Therefore, it is a good idea to tighten stop-loss level with the Bollinger Middle Band, just in case the KLCI should have a steep correction.

综合指数 2009年 4月 24日
如图中箭头A所示,综合指数周五跳空稍微上扬,形成延续缺口(Continuous Gap),随后综指精确的在993点胜图自动费氏阻力线遇阻。延续缺口的出现表示综指目前在现有的涨势中再度加速上扬,通常这一类缺口出现后都暗示涨势开始接近高峰,所以有调整的风险。





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