Despite the close back above 1480 yesterday, the follow through buying from the positive “Doji” on Tuesday failed to materialize, which indicates that short term selling has yet to end. The longer term trend, however, remains neutral.
The index was rather flat yesterday, in contrast to the rather volatile move of the past few days. It managed to claw back above the 1480-pt support level but this was not good enough to signal the end of selling. As such, we are still waiting for the daily RSI oversold condition to spark a rebound. The ingredients are there, supplanted by high volume that usually occurs at bottom, but the rebound is still wanting.
The index has to close above Tuesday’s “Long-Legged Doji” high of 1490 to re-confirm the “Doji” bullishness and kick-start the rebound. In fact, the failure of the 1490 test yesterday shows an overhang in supply is right there while other technical weaknesses are also yet to be neutralized. The breaking of the 200-day MAV looks confirmed now as the index has stayed below the line for 4 days now. Also, the small caps index did not manage to claw back above its violated support level yesterday. The support level was its Nov 2010 and Mar 2011 low, which corresponds to the 1480-pt FBM KLCI support level.
The longer term trend remains neutral, with the holding of the 1480 level, and the index has to get back above Monday’s high of 1520 to reduce the possibility of the short term correction to build up into something larger. Immediate supports are now near yesterday’s and Monday’s low of 1470 and thereafter 1445, and Tuesday’s intraday low of 1423. The first target of 1380 remains should the share price violate the 1480 support level.
(Chart extracted from ChartNexus)
The index was rather flat yesterday, in contrast to the rather volatile move of the past few days. It managed to claw back above the 1480-pt support level but this was not good enough to signal the end of selling. As such, we are still waiting for the daily RSI oversold condition to spark a rebound. The ingredients are there, supplanted by high volume that usually occurs at bottom, but the rebound is still wanting.The index has to close above Tuesday’s “Long-Legged Doji” high of 1490 to re-confirm the “Doji” bullishness and kick-start the rebound. In fact, the failure of the 1490 test yesterday shows an overhang in supply is right there while other technical weaknesses are also yet to be neutralized. The breaking of the 200-day MAV looks confirmed now as the index has stayed below the line for 4 days now. Also, the small caps index did not manage to claw back above its violated support level yesterday. The support level was its Nov 2010 and Mar 2011 low, which corresponds to the 1480-pt FBM KLCI support level.
The longer term trend remains neutral, with the holding of the 1480 level, and the index has to get back above Monday’s high of 1520 to reduce the possibility of the short term correction to build up into something larger. Immediate supports are now near yesterday’s and Monday’s low of 1470 and thereafter 1445, and Tuesday’s intraday low of 1423. The first target of 1380 remains should the share price violate the 1480 support level.
(Chart extracted from ChartNexus)
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