The FBM KLCI carved out a significant bearish reversal signal on Wednesday. On that day, the key index gapped up at the opening bell due to the spillover effect of the DJIA’s more than 200-pt gain on Tuesday Subsequently, the index continued to add more points and actually raced up as much as 13.73 pts at the peak of the session. Nevertheless, the market failed to hold up most of the gains and closed near the opening level. As a result, a classic “Gravestone Doji” candlestick pattern was created.
Interestingly, the FBM KLCI has now created the first bearish reversal signal since rebounding from the 1,243.86 pt-level, where the “Bullish Engulfing” was created. It will now be a battle between the “Gravestone Doji” and the “Bullish Engulfing”. Confirmation of the bearish reversal signal can be easily detected by a breakdown from the short-term uptrend line. On the contrary, we would know if market can continue to push forward should the index surpass Wednesday’s intra-day high of 1,312 pts.
In the meantime, our view remains the same, i.e. the near-term technical outlook of the FBM KLCI is still firmly bearish. We saw the key index fail to crack above the 1,350 pt-level in three separate attempts over the last three months, and the market eventually dipping below the significant support near the 1,300 pt-level. Such market action is usually viewed as a strong reversal signal.
Immediate resistance is now situated at the 1,307/1,308 pt-level while Wednesday’s intra-day high would be the next overhead hurdle. To the downside, the 1,298-1,303 pts area is the immediate support while the 1,276-1,285 pt-gap area would be the next support.
Interestingly, the FBM KLCI has now created the first bearish reversal signal since rebounding from the 1,243.86 pt-level, where the “Bullish Engulfing” was created. It will now be a battle between the “Gravestone Doji” and the “Bullish Engulfing”. Confirmation of the bearish reversal signal can be easily detected by a breakdown from the short-term uptrend line. On the contrary, we would know if market can continue to push forward should the index surpass Wednesday’s intra-day high of 1,312 pts.
In the meantime, our view remains the same, i.e. the near-term technical outlook of the FBM KLCI is still firmly bearish. We saw the key index fail to crack above the 1,350 pt-level in three separate attempts over the last three months, and the market eventually dipping below the significant support near the 1,300 pt-level. Such market action is usually viewed as a strong reversal signal.
Immediate resistance is now situated at the 1,307/1,308 pt-level while Wednesday’s intra-day high would be the next overhead hurdle. To the downside, the 1,298-1,303 pts area is the immediate support while the 1,276-1,285 pt-gap area would be the next support.
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