2009
KLCI set new direction - downwards
Filed Under (Finance Help) by Admin on 10-03-2009
The KLCI has broken the support level of a wedge chart pattern at 880 points. The three months old wedge pattern indicates correction. This simply means that the correction in the major down trend in the past three months has ended and the outcome is that the bears have beaten the bulls. The momentum of the trend has also turned bearish, but not strong. The short term 30-day moving average has started to turn bearish since late February and is now in the same trend as the long term 90 day average. The Relative Strength Index (RSI) indicator has started to create new lows and the weekly MACD has been down for three consecutive weeks.
Market volatility has also changed with stronger bear strength. The Bollinger Bands, which monitors market volatility, has just expanded on the downside. When market volatility expands, price is expected to move into a direction and in this case, downwards. Market volume has started to increase marginally higher in the last two weeks as compared to the previous weeks. This means that there is some selling pressure.
