AirAsia Downtrend To Continue

Lets look at AirAsia today.  This stock was on a downtrend from early July to Sep where a bottom was formed on 27 Sep 2012.  The rebound took the stock to RM3.19 around the 38.2% retracement level.   The rebound was on a lower volume meaning that investors are not convinced that we have seen the worst of the downswing.

A look at the GMMA indicator shows this picture.  The long term investors are not coming in to support the stock.  The separation of the long term moving averages are well spaced out.  With long term investors looking at further downside, there is only so much that the short term investors can do to prop up the stock.

There is a high probability that the stock will re-visit the RM2.81 level.  If this level holds and the stock is able to clear the resistance of RM3.19, then there is a chance of a change in trend.  Currently, the bears should still have the upper hand.

KLCI Still Bullish

US market had a bad closing last night.  Dow plunged by 243 points.  It seems like we are seeing more volatility recently.  With earnings starting to disappoint investors it is likely that the volatility will continue.

The KLCI chart formed an inverted hammer on 19 Oct.  This pattern is bearish and the black candle on 22 Oct confirms the bearish mood.  So where is the support level?

The first support is at 1649 the pivot low made on 15 Oct.  The next support will be at the 38.2% Fibonacci retracement level of 1641.  If 1641 fails to stop the sell down, the index is likely to test the 61.8% level of 1623

A look at MACD indicator shows that the trend is still bullish.   ADX indicator is indicating a sideway trading with value below 20 level indicating that there is no strong trend pattern at the moment.  The +DI is still above –DI indicator suggesting that any sell down will be a correction under the current bullish trend.

KLCI in uptrend

As with other stock market worldwide, the KLCI index has made impressive gains in recent week making it a great start to the year of the water dragon.

The bulls have managed to push the index above its 50 day and 200 day moving averages.    The bullish move is confirmed in the GMMA chart with the bullish indication in both the short term traders chart and long term investor charts.

With MACD about to make a bullish crossover pattern, expect the index to show continue strength.  Note that ADX indicator is still at below 30 showing that the bullish move is not strong enough for a sustainable trend.  So traders do need to be nimble in taking profit and not to be too aggressive to add on to their positions.

KLCI Trading Sideways

Malaysia stock market remains in sideway trading range since the start of the new year.  The KLCI index has moved in an upward fashion since Dec 21 and it looks as if the index is starting to feel lethargic moving forward.

The index faces resistance at 1550 level and despite the index moving above its 200 day moving average, the market is facing headwinds which should limit the further upside.  The index has established a support at 1500 level and judging from its 2 day RSI, the index will face further pullback in the next few trading days.