Friday, August 20, 2010

Bullish On Malaysia Stock Market

The KLCI has an impressive run after breaking through the resistance level of 1370. The dip on 12 Aug couldn’t bring the index down its support level of 1340. This resulted in a technical rebound which has brought the index above the 1370 mark.

The short term Guppy multiple moving averages (GMMA) have also started to spread out. This indicates buying by the short term trader. It is likely that the rally is brought about by covering of short positions. The long term GMMA is also showing no signs of giving up its bullish bias. Long term investors are still staying with their long positions.

The 2 day RSI is on the high side which indicates a short term overbought conditions. Given the performance of US market overnight, we may see some profit taking. Any correction may be a chance to re-enter the market at a lower price.

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