KLCI Taking A Breather

US market continued to fall on Friday with the Dow Industrial Average closing down 90 over points at the close. The drop was not as bad as initially thought and it is not as drastic as the drop we saw in China’s market. However, the negative momentum will set a negative tone on next week’s trading.

The KLCI has dropped for the past 2 trading session and the index looks set to test it’s 50 day moving average.

MACD is beginning to turn bearish with the indicator below its signal line. –DI is about to go above +DI which implies that the current up trend is likely to take a break.

Judging from the technical charts, the index is likely to drop below its 50 day moving average. The question then will be whether there is going to be a change in trend or just a pause in the rally.