There are still no signs of where the FBM KLCI will be heading after creating the “Morning Star” at below the steeper downtrend line. Anyhow, the bullish reversal pattern has at least reversed the index to three days of sideways trading.
After creating the “Morning Star”, we would need the index to crack above the recent high of 1,479.6 pts to confirm the bullish reversal signal. If not, a dip below the recent low of 1,445.33 would increase the odds of the index falling further after it violated the steeper uptrend last Thursday. Hence, we would need the market to breach either one of these two levels in order to determine its immediate direction.
Market sentiment has obviously improved, if not stabilized, after last Thursday’s nearly 18-pt drop. To re-cap, last Thursday the FBM KLCI closed lower by nearly 18 pts in an obviously bearish session. The next trading day, the index gapped down by 6.5 pts at the opening bell, but ended only 0.39 pts down for the day. From the candlestick theory perspective, it was an indecisive day. On Monday, the market gapped up and closed higher by 13.52 pts. Since then, the index has been trending sideways over the last three sessions.
Meanwhile, our view remains the same, i.e. the FBM KLCI’s near-term technical outlook will stay firmly bullish as long as it stays above the new uptrend line, as is marked in the above chart. Hence, even another 40 pt-drop or so would not dent the rising trend.
The market’s immediate resistance is now seen at the recent high of 1,479.6 pts while the next resistance lies at the psychological 1,500 pt-barrier, followed by the 1,524.69 pt-level. To the downside, the 1,439 pt-level is now the initial support, followed by the 1,428 pt-level.
After creating the “Morning Star”, we would need the index to crack above the recent high of 1,479.6 pts to confirm the bullish reversal signal. If not, a dip below the recent low of 1,445.33 would increase the odds of the index falling further after it violated the steeper uptrend last Thursday. Hence, we would need the market to breach either one of these two levels in order to determine its immediate direction.
Market sentiment has obviously improved, if not stabilized, after last Thursday’s nearly 18-pt drop. To re-cap, last Thursday the FBM KLCI closed lower by nearly 18 pts in an obviously bearish session. The next trading day, the index gapped down by 6.5 pts at the opening bell, but ended only 0.39 pts down for the day. From the candlestick theory perspective, it was an indecisive day. On Monday, the market gapped up and closed higher by 13.52 pts. Since then, the index has been trending sideways over the last three sessions.
Meanwhile, our view remains the same, i.e. the FBM KLCI’s near-term technical outlook will stay firmly bullish as long as it stays above the new uptrend line, as is marked in the above chart. Hence, even another 40 pt-drop or so would not dent the rising trend.
The market’s immediate resistance is now seen at the recent high of 1,479.6 pts while the next resistance lies at the psychological 1,500 pt-barrier, followed by the 1,524.69 pt-level. To the downside, the 1,439 pt-level is now the initial support, followed by the 1,428 pt-level.
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