FBMKLCI chart analysis (week 53)
While we are approaching the end of the year, lets take a look at the likely trend of the KLCI index at closing of 2014 and beyond.
Overall trend is still Downtrend with immediate support being 20-MA, immediate resistance 1766. Today (30-Dec), a candlestick pattern of Doji was formed signifying indecision between bulls and bears. Oene obvious observation is that index has been trading with diminishing volume indicating weaknesses in the short term reversal.
MACD is still below 0 centreline which means it is still bearish. There was no confirmation of bull yet after the Bullish MACD crossover on 22-Dec-14. Stochastic shows overbought region around 94%. There is early sign of possible bearish crossover by looking at its blue line.
Market is in high volatility as evidence in the wide distance between upper & lower band of the Bollinger. For any possible continuation of the upside, 1766 immediate resistance need to be broken, and subsequently an interim high needs to be formed near 1790-1805.
On the contrary, if resistance 1766 holds, watch for any Bearish reversal signal such as possible candlestick pattern, or Stochastic crossover. Other indicator like MACD Bearish crossover might take a little longer to materialize.
The current window dressing that contributes to the upside seems to be weaken and not sustainable. If history were to repeat itself, we might see another trend reversal and bearish momentum continues just like what happened back in mid October. If this is indeed the case, KLCI is running the risk of inching lower and testing 1600 level in 1st quarter of 2015.