KLCI Likely To Be In Trading Range

KLCI index rebounded off its lower Bollinger band on 28 Feb.  The index is now above its 20 day moving average and is set to test its upper Bollinger band at around 1539 level.

Technically the index looks bullish.  The MACD indicator just made a bullish crossover with its signal line.  The +DI is now above its –DI line.  However the ADX indicator is still low at current levels and that means that we do not expect a strong uptrend.   2 day RSI is reaching overbought levels and we will most likely see a pullback.  The index looks set to remain in trading range between 1476 and 1539 levels.

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.

KLCI Direction

KLCI index hit a wall of resistance this week together with the stock market around the world.

Compared to other indexes around the world, KLCI is having a stronger performance. The index is still above its 200 day moving average and the death cross scenario where the 50 day moving average crosses below the 200 day moving average has not occurred.

However, there are warning signs in the technical chart.

Firstly, the MACD indicator is about to go below its signal line. The RSI indicator is decreasing but has not reached oversold values. This means that there is a short term weakness in the index. Stochastic chart is also showing weakness in the near term.

ADX is now at around 20 levels and looks to be ticking up. –DI is now slightly above the +DI. This suggests that the index is likely to continue moving down but the strength of the down move will not be strong unless we see a higher ADX value in the coming week.

All in all, the index will continue to go down in the coming weeks or at best be range bound. Do trade with care.

KLCI Update

KLCI has been holding well even though Europe has caused stock markets world wide to embark on a correction mode.

The index is facing resistance at 1350 level. It has tested this level 3 times for the past 1.5 months and has not been able to break through.

The –DI is now above +DI indicating weakness in the price action. However with ADX below 20 levels, there is no sign of a strong downtrend developing.

MACD indicator is just slightly below its signal line which is a bearish signal.

Gathering the evidences painted by the charts, index looks set to weaken next week. However possibility of a strong downtrend developing is still not present. The next support level is around 1310

KLCI Update

We are near the end of 2009. The stock market has rallied from its March low and it has retraced more than 60% of it down swing from a high of 1521 to a low of 801.

The technical picture is indicating weakness ahead. The MACD indicator has made a bearish crossover. +DI is still above the –DI but it looks to be turning towards the –DI. ADX is also decreasing which shows a weakness in the current uptrend. Stochastic indicator is also showing a bearish stance.

The market needs more positive news to push it higher. Any retracement should be well supported at 1157.

KLCI Update

KLCI manages to keep above its up trend support line last week. This is a positive sign.

The MACD indicator is still above its signal line, indicating that the Bulls are still in control.

However a danger sign is appearing on the RSI chart. The indicator is showing a slight divergence from the price chart with the index making a newer high whereas RSI is trending downwards.

All eyes will be on whether the index is able to maintain above its up trend line. If this line is violated, coupled with a diverging RSI, it will mean a sell down is in the cards.

Trade with care.

KLCI Updates

KLCI index closed at 1184 points on Friday, the highest since June 30, 2008. The question now is whether this uptrend will continue or will we see a down swing that will take out the lows made in March 2009.

The index is now above its 50, 100 and 200 day moving average. And all three moving averages are increasing. This shows the strength of the current up move.

The MACD indicator is moving down and looks set to cut its signal line. If the crossover occurs, it will mean weakness in the short term. However, given the fact that the index is still above its up trend support line, “Bullish” investors are still in safe territory.

Market Update

Dow Industrial Average reached a high of 8839 in the opening minutes before succumbing to selling pressure. It lost all its gain and went into negative territory before buyers came in to bring up the index. Market closed at 8768, up 12 points for the whole session.

The non-farm payroll showed a decline of 345000, a better than expected number of job losses. However un-employment rates reached a high of 9.4%. This mixed picture also explains why the market closed near the unchanged mark.

Looking at KLCI, it has recovered more than 50% of its downswing from May 08 till Oct 08. Immediate resistance is at 1090, 1111 and 1141 respectively. Support is at 1055, 1036 and 1000.

KLCI

KLCI broke through its 200 day moving average, made a test before resuming its current bullish trend. This is a good sign for the market. It shows that investors are willing to buy on pullbacks.

RSI is showing a slight divergence with the indicator making a lower high on 7 May 09.

Immediate resistance level is at 1040 and 1060. Pull back should find support at 1000 level.

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.

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.

KLCI Update

US market managed to stage a rally on Friday. The Dow Industrial Average closed at 8280, up 217 points on Friday. Market look past the bad job numbers and are hoping that the Obama Administration is able to come up with a stimulus package that will save the financial sector which in turn will support the stock market.


Our own KLCI index is also making a comeback. The index closed above its 20 day moving average on Friday. The MACD indicator is looking to cross above its signal line, another positive scenario.

Note that the 13 day force index has just turned positive. If the index is able to hold above 867 points, there is a potential for the index to test its upper Bollinger Band limit.

Stochastic indicator is also turning up, indicating short term strength.

KLCI Update

KLCI closed at the high of 920.66. The next resistance is at 926.65 and 970 respectively.

The technical charts continue to show a bullish bias. The MACD line is currently above its signal line indicating a bullish market.

+DI is still above –DI. However ADX will need to go above 30 soon in order to have a sustainable rally.

RSI is approaching overbought levels. Unless there is a sustainable rally, market will not stay in overbought level for long. In this market, it is best to be nimble and take profit when a danger sign appears. For example the appearance of a graveyard doji, hanging man etc.

All eyes will be on US market tonight to see whether last week’s breakout is a false dawn.

KLCI Update

KLCI should see some strength today. The question is whether we will see a more sustain move or just a one day wonder.

MACD is still showing a bullish sign with the indicator above its 9 day signal line.

RSI is ticking up but is still below the 50 level. If it is able to get above 50 level, it will be bullish. The RSI indicator has not been above to clear the 50 level in all previous attempts and the last time the indicator was above 50 was in July 08.

The –DI is still above +DI which indicates a weak market. However, the ADX has come down as well. This means that we are not likely to experience the severe down move that we saw in the past 2 months.

The index was able to hold on to the 61.8% Fibonacci retracement level last week. If this support holds, there will be chance for the index to test 926.

KLCI Update

The market turmoil continues.

KLCI is now at 859 levels. It looks likely for the index to test the next support at 817.


The technical charts for KCLI are not looking good. The MACD line is still below its 9 day signal line showing a bearish bias. There is no divergence in the MACD with respect to price movement, so it is not logical to expect a sustainable a rebound at this point.

ADX is at value of 55 and with –DI above +DI, it indicates a continuation of the down trend.

RSI is oversold at this level but in a downward trending market, oversold market tends to become more oversold.

KLCI Update

US market tried to overcome from market weakness on Friday. However at the close, it succumbed to market forces and Dow was down 127 points.

At one point, the Dow index managed to put on a gain of nearly 300 points. The optimism could not hold and the index gave back all the gains plus some extra losses to end at 8852.

The KLCI index dropped 14 points on Friday in anticipation of further weakness in the US market. The index gave up all the gains made on the first 2 days of the week.

The index has broken through the 62% re-tracement level and is now heading towards the low of 615 set in March 2003.

The support level is at 860 and 817.

KLCI Fibonacci Analysis

The KLCI is still in a down trend. Based on Fibonacci analysis, the index is set to drop below 1000 points.

Lets do a Fibonacci analysis on the recent down move. From Point A to Point B, the index dropped from 1436 to 1157. The rebound to Point C (1305) retraces 50% of the move from A to B. Since the index did not clear Point A, the down trend was still in place and the projected objective point rests at 1026 which is calculated from the following:

Objective Point = 1305 – (1436-1157)
= 1026

This objective point was near Point D of 1089.

The current up move from Point D to E did not clear the 38.2% retracement level. The objective point for this move will be:

Objective Point = 1164 – (1305-1089)
= 948

Hence based on Fibonacci analysis, the index is likely to go below 1000 points.

KLCI Sep Performance

Historical results from 1994 to 2008 have shown that September is not a very good month to have a long position.

Entry Date	Entry Price	Exit Date	Exit Price	% Change
1-Sep-94	1,135.20	30-Sep-94	1,131.08	-0.36
1-Sep-95	1,014.96	29-Sep-95	992.16	-2.25
2-Sep-96	1,117.21	30-Sep-96	1,130.76	1.21
2-Sep-97	811.15	30-Sep-97	806.79	-0.54
1-Sep-98	294.76	30-Sep-98	376.61	27.77
1-Sep-99	766.01	30-Sep-99	683.18	-10.81
1-Sep-00	795.26	29-Sep-00	721.85	-9.23
3-Sep-01	686.35	28-Sep-01	614.57	-10.46
2-Sep-02	710.75	30-Sep-02	644.61	-9.31
2-Sep-03	743.17	30-Sep-03	736.37	-0.92
1-Sep-04	828.96	30-Sep-04	846.76	2.15
1-Sep-05	913.08	30-Sep-05	925.03	1.31
1-Sep-06	959.04	29-Sep-06	967.74	0.91
3-Sep-07	1,283.93	28-Sep-07	1,339.43	4.32
2-Sep-08	1,097.08	Open	Open	-0.92

In total there were 6 winning September months, about 42% that your position will be higher compared to the beginning of September. Let’s cross our fingers and hope that there will not be a double digit percentage losses this month. Do trade with care.

KLCI Update

KLCI index closed at 1159 on Friday, up 18 points for the week. The technical indicators are looking better for the index.

The index has broken the upper channel line of the down trend line and there was a positive divergence between price and its 14 day RSI indicator.

The index has to stay above a low of 1089 in order to make a higher low. And if the index moved above 1163, then we will have a case of higher high and higher low which according to Dow’s theory is a bullish sign.

The ADX is also decreasing showing that the Bearish trend is weakening. The +DI is now slightly above the –DI another bullish sign.

KLCI Update

KLCI index is painting a “Bearish” picture.

The ADX is increasing and is above 20 level which shows a strong trend is developing. The –DI is greater than the +DI by a great margin, indicating a Bearish trend.

The MACD is below its signal line, another evidence of a Bearish market.

RSI is less than 30 indicating that the market is oversold. However an oversold market doesn’t mean that market will rebound strongly.

It is not advisable to trade the market from the long side given the bearish picture.