Mild window-dressing expected

While the local stock market is likely to end the year on a whimper, the possibility of late window-dressing emerging to prop up blue chips during the last two trading days for this year cannot be discounted. Nevertheless, it is crucial that daily trading volume expand above 500 million shares to sustain upside momentum for the KLCI to stage a decisive breakout above 880, with a breakout above last week's high of 888, which mirrors the 23.6 per cent FR of the plunge from the pivot high of 1,164 on July 31 to the 801 pivot low of October 28, to assist upward bias towards next significant hurdle from the 900 psychological level. Higher up, expect formidable resistance at 920 to 926, which represents the November 5 pivot high.

On the flipside, immediate support is retained at 864, cushioned further by the 30-day SMA level, while stronger support platform is seen at 850. Conflicting signals on technical momentum and trend indicators are caused by the light trading volumes and tight range bound trade last week, which tend to skew technical indicators to produce confusing signals. However, the lack of trading interest could be a blessing in disguise, as investors should return after the long year-end holidays the following week for a fresh start to a more positive new year.

On a closing note, I wish all investors a Very Happy and Prosperous New Year.

The subjects expressed above are based purely on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.