We think yesterday’s 10.4 pt-push to the upside is sufficient to confirm the “Morning Star” bullish reversal pattern. Moreover, yesterday’s gains were recorded after three constructive sessions in a row without any signs of panic selling at above the previous peak of 1,497.6 pts. It was also the fourth trading day whereby the FBM KLCI closed above the previous high.
Technically speaking, the market was fortunate to be able to construct the “Morning Star” right after the steeper uptrend line was violated. If not, such a breakdown from the steeper trend line after the market has put on more than 100 pts would normally lead to more downside. Moreover, the more than 100 pts of gains were recorded when the market was stretching gains above the daily RSI’s 70 pt-level.
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. As the daily RSI closed at around the 74 ptlevel yesterday, the room is still open for additional gains before the FBM KLCI reaches its overbought territory. The FBM KLCI normally gets overbought beyond the 80 pt-level.
The next resistance still lies at the psychological 1,500 mark, followed by the 1,524.69 pt-level. To the downside, the 1,497.6 pt-level is now the initial support, followed by the 1,439 pt-level and the 1,428 pt-level.
Technically speaking, the market was fortunate to be able to construct the “Morning Star” right after the steeper uptrend line was violated. If not, such a breakdown from the steeper trend line after the market has put on more than 100 pts would normally lead to more downside. Moreover, the more than 100 pts of gains were recorded when the market was stretching gains above the daily RSI’s 70 pt-level.
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. As the daily RSI closed at around the 74 ptlevel yesterday, the room is still open for additional gains before the FBM KLCI reaches its overbought territory. The FBM KLCI normally gets overbought beyond the 80 pt-level.
The next resistance still lies at the psychological 1,500 mark, followed by the 1,524.69 pt-level. To the downside, the 1,497.6 pt-level is now the initial support, followed by the 1,439 pt-level and the 1,428 pt-level.
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