The Hammer candlestick formation may pound out a result

FBM KLCI's Hammer To Stop The Stammer
It's been rather disappointing in some ways considering the market respond to a BN victory in Sarawak. The market had been spluttering like a Honda Cub from the 60s era if we can put it that way. The Malaysian stock market turned right back to the downside again on Tuesday, one session after it had snapped the two-day losing streak in which it had retreated more than a dozen points or 0.8 percent. The Kuala Lumpur Composite Index finished just above the 1,520-point plateau. It's inability to progress had been hindered by stiff resistance at the FR 1525 and paltry trading volume. Bursa had been trading below the 40-day Volume Moving Average and such lack of sufficient commitments have restricted even the slimmest of upside consistency as far as the FBMKLCI is concern.

Yesterday, the index fell 6.39 points or 0.42 percent to finish at 1521.53 after trading between 1522.72 and a low of 1514.94. Volume was 1.040 billion shares worth 1.393 billion ringgit. There were 455 decliners and 295 gainers.

Nevertheless, a silver lining has appeared in the form of a Hammer candlestick pattern when market closed yesterday. The bluechip index rebounded from intraday low 1514.94 just a tad off the FR 1513 support.

Any techie worth his salt can tell you a Hammer is a U-turner but what the candle guide books did not tell is the potency of this Hammer is relevant to it's positioning. When appearing at a peak or summit, a Hammer can be viewed as a Hanging Man and in reverse positioning, it becomes a Shooting Star which is a fine example as shown in the latest FKLI Weekly Chart. It half killed the FKLI.

However, in this present case, it's (the Hammer) positioning is neither at the peak or trough of the FBM KLCI trend. >>> neither here nor there if you wish to call it that. In mid-trend, the Hammer is not envisage to be a very potent reversal agent. It's reversibility can only be best described as "so-so."

On the bright side, some support (in any small provision) can be depended. If it is not able to turn it around just yet, it can, hopefully, create some delay actions to counter any further bear assaults on the FBM KLCI.

The global forecast for the Asian markets is generally positive on bargain hunting following several days of decline. Steel and technology companies are expected to provide support, along with gold, oil and property stocks. The European and U.S. markets finished firmly higher, and the Asian bourses are tipped to follow that lead.

We can also place some hopes on better economical fundamentals and hunker down until Bursa consolidations have petered out. In economic news, Malaysia will on Wednesday provide consumer price index numbers for March, with forecasts calling for the inflation rate to come in at 3.1 percent - up from 2.9 percent in February.

PM Najib's ETP announcement should also garner some positive support in the short term.

HAPPY TRADING & GOODLUCK2ALL