FBMKLCI - Another Quick Recovery (ext.OSK)

Another sell-off occurred early this week but the decline was again quickly reversed. Still, a break above the 1,524 and 1530-pt resistance levels is required to confirm the return of buying.

The sideways move of the past four weeks has also eased the early-year daily RSI overbought conditions. Thus, the index is primed for a new up leg, as long as it stays above 1,510 pts. It has also stayed above the 200-day MAV line more than a month now. The resistance at 1,530–1,545 pts – the gap of 5 Aug – looms if the 1524.10-pt resistance level is broken. Should the index fail to progress at any of these levels, support is expected at the 1,510-pt level and a stronger one at the psychological 1,500-pt level, just below the 200-day MAV line. A close below should see the index trading lower and confirm the negative bias of 4 Jan. The next support is at 1,480 pts, a Fibonacci retracement level of the late-December rally. A close below the 1,450-pt level is likely to signal the end of the rebound since the September-low. Note that a breakout, either way, could see a sustained move as the Bollinger Band has contracted significantly.