FBM KLCI : The Critical 200 MA SupportOn Bursa Malaysia, the FBM KLCI staged a sharp technical pullback to close broadly lower at 1,285.73 points yesterday, recording a week-on-week loss of 53.57 points, or 4.00 per cent. The bluechips index traded within a weekly high of 1337.30 points and a weekly low at 1280.63 points, total market volume traded was 3,757,361,200 shares, downed 2.2%.
Main Chart:
Last week, the KLCI fell below the L2 support line, breaking below the Ascending Wedge, and ended the uptrend. On Friday, the KLCI closed at 1285.73 points, as indicated by A, with the support at 1252.33 and resistance at 1287.15 followed by 1302.
Meanwhile, the KLCI is heading toward the 200-day Moving Average, which is generally an important guide line to differentiate bull and bear run. Therefore, if the KLCI should break below 200-day MA, it would mark and end to the bull run which started in 2009.
Volume:
As indicated by B, total market volume remained below the 40-day VMA level, suggesting that the overall market is quiet, as investors confidence is still relatively low, therefore, the KLCI is unlikely to pickup any strength. On Friday, volume increased rather significantly, but with the KLCI falling, the increased of volume suggests some increased of selling pressure.
Bollinger Bands:
As the KLCI breaks below the Bollinger Middle Band, with the Bollinger Bands expanding, immediate technical outlook turned bearish biased. The bearish biased outlook remains intact, until the Bollinger Bands should contract or the expansion rate is reduced.
MACD:
At the moment, the MACD is showing negative signal as the MACD line is still falling ahead the Signal line. Nevertheless, with the MACD histogram also falling, the current market movement is bearish biased, until the MACD histogram should form a Rounding Bottom, which would suggests a technical rebound.
RSI:
Due to the heavy losses of the KLCI, the Relative Strength Index (RSI) fell below 30% level, entered the mid term bearish territory. With the RSI below 30%, the market strength for the mid term is expected to be weak. The 14-day RSI stood at the 24.95 per cent level yesterday.
Stochastic:
Basically, the Stochastic is still below 30% level, in the short term bearish territory, and therefore, the market movement for the short term is expected to be weak, until the Stochastic should break above the 30% level successfully.
In a Nut Shell:
Main Chart:Last week, the KLCI fell below the L2 support line, breaking below the Ascending Wedge, and ended the uptrend. On Friday, the KLCI closed at 1285.73 points, as indicated by A, with the support at 1252.33 and resistance at 1287.15 followed by 1302.
Meanwhile, the KLCI is heading toward the 200-day Moving Average, which is generally an important guide line to differentiate bull and bear run. Therefore, if the KLCI should break below 200-day MA, it would mark and end to the bull run which started in 2009.
Volume:
As indicated by B, total market volume remained below the 40-day VMA level, suggesting that the overall market is quiet, as investors confidence is still relatively low, therefore, the KLCI is unlikely to pickup any strength. On Friday, volume increased rather significantly, but with the KLCI falling, the increased of volume suggests some increased of selling pressure.
Bollinger Bands:
As the KLCI breaks below the Bollinger Middle Band, with the Bollinger Bands expanding, immediate technical outlook turned bearish biased. The bearish biased outlook remains intact, until the Bollinger Bands should contract or the expansion rate is reduced.
MACD:
At the moment, the MACD is showing negative signal as the MACD line is still falling ahead the Signal line. Nevertheless, with the MACD histogram also falling, the current market movement is bearish biased, until the MACD histogram should form a Rounding Bottom, which would suggests a technical rebound.
RSI:
Due to the heavy losses of the KLCI, the Relative Strength Index (RSI) fell below 30% level, entered the mid term bearish territory. With the RSI below 30%, the market strength for the mid term is expected to be weak. The 14-day RSI stood at the 24.95 per cent level yesterday.
Stochastic:
Basically, the Stochastic is still below 30% level, in the short term bearish territory, and therefore, the market movement for the short term is expected to be weak, until the Stochastic should break above the 30% level successfully.
In a Nut Shell: The FBM KLCI's weekly chart breached its immediate downside support (See FBM KLCI's weekly chart - A3:A4) at the market close on Friday. It continued to stay above the neckline (A1:A2) of its head-and-shoulders pattern formation.
Chartwise, the FBM KLCI's daily trend staged a decisive breach of its intermediate-term uptrend (See FBM KLCI's daily chart - B1:B2) on Tuesday.
The FBM KLCI's daily and weekly fast MACDs (moving average convergence divergence) continued to stay below their respective slow MACDs yesterday. Its monthly fast MACD continued to stay above its monthly slow MACD. The FBM KLCI's 14-day RSI stayed at 24.95 per cent level yesterday.
Its 14-week and 14-month RSI stayed at 49.69 and 60.76 per cent levels respectively.
Before The Opening Bell ............
The FBM KLCI continued to stay below its immediate downside support of 1,330. Thereafter, it continued to breach its immediate downside support of 1,320, 1,310, 1,300 and 1,290 levels in quick succession.
As share prices on Bursa Malaysia fell across the board over the last five trading days, overall market sentiments are expected to remain weak in the coming week.
Minor technical rebounds may set in to correct its technical imbalances.
Next week, the FBM KLCI's envisaged resistance zone hovers at the 1,289 to 1,323 levels while its immediate downside support is at the 1,248 to 1,282 levels.
HAPPY WEEKEND
No comments:
Post a Comment