The FBM KLCI fell by about 12 pts at its intra-day low yesterday but the desire to hold up the bottom of the “Bullish Harami” was obvious and the index eventually ended the session with only a 1.87-pt loss. In fact, the market once surpassed the closing level of Tuesday’s session.
Remember we talked about the improving market sentiment over the last three trading days prior to yesterday’s market action? The index shed some 10 pts last Friday and another 9.16 pts on Monday.
However, it gapped up slightly more than 3 pts on Tuesday and ended the day with a 7.95-pt gain. The resulting action was that a “Bullish Harami” was created on Tuesday. And, the way the index rebounded slightly by more than 10 pts off the low and closed marginally lower yesterday suggested that the market sentiment is still at its best level since last Friday.
Although the market is still trading at below the short-term uptrend line, the bulls can remain hopeful of the confirmation of the “Bullish Harami”. The bullish reversal pattern will be confirmed once the market cracks above the 5-day downtrend line and surpasses the psychological 1,500-mark.
As mentioned previously, the accuracy of the breakdown signal for the short-term trend violation would normally not be very high. Still, there is a risk that the index might retrace further, possibly towards the new uptrend line. Anyhow, we will continue to stick to our bullish bias view on the near-term stock market as long as it maintains a posture at above the new uptrend line.
The next resistance still lies at the psychological 1,500 pt-mark, followed by the 1,524.69 pt-level. To the downside, the 1,479 pt-level is the immediate support, followed by the 1,439 pt-level.
Remember we talked about the improving market sentiment over the last three trading days prior to yesterday’s market action? The index shed some 10 pts last Friday and another 9.16 pts on Monday.
However, it gapped up slightly more than 3 pts on Tuesday and ended the day with a 7.95-pt gain. The resulting action was that a “Bullish Harami” was created on Tuesday. And, the way the index rebounded slightly by more than 10 pts off the low and closed marginally lower yesterday suggested that the market sentiment is still at its best level since last Friday.
Although the market is still trading at below the short-term uptrend line, the bulls can remain hopeful of the confirmation of the “Bullish Harami”. The bullish reversal pattern will be confirmed once the market cracks above the 5-day downtrend line and surpasses the psychological 1,500-mark.
As mentioned previously, the accuracy of the breakdown signal for the short-term trend violation would normally not be very high. Still, there is a risk that the index might retrace further, possibly towards the new uptrend line. Anyhow, we will continue to stick to our bullish bias view on the near-term stock market as long as it maintains a posture at above the new uptrend line.
The next resistance still lies at the psychological 1,500 pt-mark, followed by the 1,524.69 pt-level. To the downside, the 1,479 pt-level is the immediate support, followed by the 1,439 pt-level.
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