It was a very impressive turnaround for the FBM KLCI since last Thursday. The index first rebounded more than 50% from last Thursday’s intra-day low and then recorded a more than 20 pt-gain over the last two sessions. Its rebound over the last two trading days not only confirmed last Thursday’s reversal but the market now looks like it is going to construct a new uptrend, as is being portrayed in the above daily chart.
There are still other technical developments supporting the fact that the index is going to extend its uptrend. Yesterday, the market’s 10.43-pt gain violated the short-term downtrend line. Besides, the FBM KLCI also surpassed the previous peak of 1,370.52 pts in a price action that basically disconfirmed the two indecisive candlesticks patterns, namely the “Long Upper Shadow Line” and
“Doji Star”. Remember that previously, the market had started to weaken since creating these two candlesticks.
The immediate technical outlook of the FBM KLCI remains bullish. Going forward, we can now use this new uptrend as our guidance. Meanwhile, the market is still not overbought just yet as the daily RSI closed at the 68.5 pt-level.
We continue to eye a tough resistance at the 1,395 pt-level while the 1,400 pt-level would be the psychological hurdle for the market. Initial support is now seen at the 1,360 pt-level, followed by the 1,351 pt-level.