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Tuesday, October 21, 2008

Composite Index 20/10/2008 综合指数 2008年 10月 20日

Composite Index Daily Technical Analysis 20/10/2008 By Zhuge Liang

As mentioned in last week's analysis, the KLCI is still volatile (as indicated by A, soon after opening, the KLCI started falling, and broke below the 900 mark by margin. However, the KLCI managed to rebound and close above the 900 mark, and the support for the KLCI is at 888.28 Fibonacci Retracement and the 900 psychological level, while the resistance is at 953.5 Fibonacci Retracement.

As shown on the chart, the Bollinger Bands Width contracted 7%, suggesting that the KLCI is likely to consolidate from now in the Bollinger Bands Width should continue to contract. But still, if the KLCI should regain its strength, it must first take out the Bollinger Middle Band dynamic resistance.

As indicated by B, total market volume increased 1.3%, suggesting that the overall market participation is still strong. Generally,if volume should continue to stay above the 40-day VMA level, there is a chance for the KLCI to regain some position as the the higher volume means some sufficient buying to absorb the T+3 selling. However, the major factor that affect the KLCI performance is still the global markets performance.

As circled at C, the Stochastic rebounded after breaking below 10% (over-sold region), and therefore, this suggests a chance for a technical rebound. If the Stochastic should break above 30% level, it would be the signal suggesting a beginning of a technical rebound. However, this does not means a short term strength for the KLCI yet, for if the KLCI short term movement was bullish, the Stochastic should remain above the 70% level.

综合指数 2008年 10月 20日

如图所示,布林频带(Bollinger Band)收窄7%,所以综指有从之前的跌势站稳下来的迹象。若布林频带接下来继续收窄的话,那综指将有望暂时停止下跌的趋势。惟若综指要真正的止跌的话,那综指就得先上扬突破布林中频带(Bollinger Middle Band),因为这是综指当前的动态阻力线。

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