It is obvious that the FBM KLCI has been trying to sustain a posture at above the recent low of 1,488 pts after creating three candlesticks with long lower shadow lines. These shadow lines portray the market’s intention to construct a new support at the 1,488 pt-level.
As we mentioned last week, as long as the FBM KLCI is able to hold above the 1,488 pt-level, this level will prevent the index from retracing towards uptrend line 1. However, the market is still very vulnerable to selling pressure at this level after violating the uptrend line 2, and there is still a possibility that it might eventually retrace towards uptrend line 1.
Meanwhile, the breakdown from uptrend line 2 still needs to be confirmed as it was a breakdown from a short-term uptrend line. We have seen many times in the last few months how the index experienced a very short retracement period after violating a short-term uptrend line. A break below the 1,488 pt-level would be the confirmation signal.
No matter which of the scenarios mentioned above turns out to be true, our view towards the nearterm market has been the same, that is the index will continue to rise until uptrend line 1 is taken out.
From the current level, there is immediate support at the 1,500 pt-psychological support while next support is seen at the 1,488 pt-level, followed by the 1,479 pt-level. To the upside, an overhead hurdle now lies at the 1,512-1,514 pts area, and the record high of 1,532 pts.
As we mentioned last week, as long as the FBM KLCI is able to hold above the 1,488 pt-level, this level will prevent the index from retracing towards uptrend line 1. However, the market is still very vulnerable to selling pressure at this level after violating the uptrend line 2, and there is still a possibility that it might eventually retrace towards uptrend line 1.
Meanwhile, the breakdown from uptrend line 2 still needs to be confirmed as it was a breakdown from a short-term uptrend line. We have seen many times in the last few months how the index experienced a very short retracement period after violating a short-term uptrend line. A break below the 1,488 pt-level would be the confirmation signal.
No matter which of the scenarios mentioned above turns out to be true, our view towards the nearterm market has been the same, that is the index will continue to rise until uptrend line 1 is taken out.
From the current level, there is immediate support at the 1,500 pt-psychological support while next support is seen at the 1,488 pt-level, followed by the 1,479 pt-level. To the upside, an overhead hurdle now lies at the 1,512-1,514 pts area, and the record high of 1,532 pts.
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