FBM KLCI 16 December 2010
As indicated by A, the FBM KLCI fell below the Bollinger Middle Band, and the immediately technical outlook for the KLCI is now turning to negative. Fortunately, the Bollinger Bands is stil contracting (14%), and this suggests that the KLCI is still consolidating.
Meanwhile, the KLCI also fell below the 1500 mark by margin, and if the KLCI should failed to come back to above 1500, the next support is seen at 1487 while the resistance is at 1525.
As indicated by B, total market volume increased 13.96%. Generally, the rising of volume during a decline is not a good sign, for it represents an increased of selling pressure. Therefore, if market volume should continue to increase while the KLCI is falling, it would further dampen the market sentiment.
As indicated by C, the Stochastic breaks below 30%, entering the short term bearish territory. If the Stochastic should stay below 30%, the market movement for the short term is expected to be weak.
Immediate technical outlook turns to negative as the KLCI retreated sharply on Thursday. The KLCI fell below the 14, 21, 31 EMA by margin, and if the KLCI should stay below the 14, 21, 31 EMA, the uptrend would come to an end.