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.

KLCI Downtrend To Continue

The fall in Dow Jones Industrial Average shows a change in market trend and economic conditions.  Big money from hedge funds, institution and fund managers withdrew in droves, causing great volatility in the market.

Looking at the charts of KLCI, it looks very similar to the drop in 2008 when the Lehman Brothers collapse brought about a big drop in stock market worldwide. 

The index is trying to find a bottom and it looks like a rebound may materialize.  However, it will face resistance at around 1500 level.  Judging from the magnitude of the decline, the bears are still in control and the strategy should be sell on strength as the market is poised to move lower.