KLCI Update

The rally finally came to a stop yesterday. KCLI has broken through its 50 day moving average. It is now sitting at the support level of 867.

Bearish signals include a down sloping 20 day and 50 day moving average. Stochastic has made a bearish crossover and RSI is coming down from overbought levels.

MACD indicator is still above its signal line. If the index is able to bounce off from 857 which is the 61.8% retracement level, there is a chance for the index to test its recent high of 890. And penetration of the 890 level will set us the first Fibonacci objective of 911.

DOW Update

Dow Jones rebounded from its low of 6440 set on 9 Mar 09 to end at 7278 yesterday. That is about 13% rebound in the span of 2 weeks.

The rebound has taken the index right up to its 50 day moving average. Last night the market was not able to take out the 50 day moving average. That is not a good sign. However, it may turn out to be just a pause before the index attacks its 50 day moving average again.

The 7392 level now serves as a critical resistance that the index needs to overcome in order for the rally to continue. Support level is at 7041

KLCI Update

US market managed to edge out a slight gain on Friday. Dow was up 32 points to close at 6626 points.

Malaysia market has been affected by the negative sentiment as well. For the week, KLCI closed at 858 points, down 32 points.

The index is still above its low of 801 points set in Oct 2008. The index is now heading towards the lower boundary of the uptrend channel that goes all the way back to 2001. There should be buying support near the 830 level.

Dow Update

Dow industrial average has fallen to 1997 levels. It has broken its Nov 07 low of 7392. The picture looks bad at the moment. ADX is at 49 levels and –DI is above +DI. This suggests a continuation of the down trend. MACD indicator has also crossed below its signal line, another bearish indication. The only bright spot is that the RSI indicator has not made a new low yet and divergence of RSI can still occur. For trend to reverse, Dow has to conquer the resistance at 7392 and 9175. In the mean time, the bears have the upper hand.