KLCI Chart Analysis Week 4

The benchmark KLCI index gained 59.5 points (3.4%) this week to 1803 compared to 1743.5 last Friday.  This was due mainly to global sentiment improvement due to ECB’s move to purchase €60 Billion in assets each month starting in March, which was better than market’s expectation of €50 Billion.

Lets take a look at Weekly chart first:

Weekly FBMKLCI

Weekly FBMKLCI

The Candle bar has touched the 100 weeks simple moving average which is a sign market trying to reverse to bullish momentum. MACD cross over has about to happen (almost “kissing” the signal line) indicating yet another uptrend momentum. When looking at the Candle sticks, a resume of bullish trend will only be confirmed once the index resume back into the uptrend channel (the two parallel blue lines zone in chart above). I will expect the back of bullish trend only after the index climbs to 1835 which is also the 50 Week moving average.

Next, on daily chart below, it was a “W” shape chart (a double bottoms), and about to clinch towards the high of the left side of the W. MACD has gone back up to positive line which indicate the start of bull engine. For uptrend to be safely continue, it needs to break the side of left W which is 1822, follow by 1847 which is the next resistance level.

Daily KLCI chart

Daily KLCI chart

Baring any unforeseen circumstances, I would expect a spill over of the buying interest from Friday to bring the index to test 1835, then 1847 most probably within next week. It is the feel good factor everywhere, and one last thing to expect is the oil price to go up or Ringgit to stablize against USD that could fuel the momentum even further.

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