The KLCI continued to stay below the short term 30 day MA despite the rebound in the past two days, indicating that market sentiment is still bearish. The immediate support is at 1862 pints while the next support level is at 1840 points which is where the long term 200 day MA currently (06 Aug 2014) is.
Momentum indicators like the RSI and Momentum Oscillator rebounded towards the mid level, indicating a weak bearish trend. The index broke below the bottom band of the Bollinger Bands indicator last week and remained below the middle band. This indicated that the momentum was still bearish in the short term. All these are indications that the market is currently (early Aug 2014) at a trend reversal.
The KLCI is not out of the short term bearish trend. The market may continue to be bearish this week if the rebound fails to break above the immediate resistance level of 1880 points. The short term 30 day MA is at 1882 points.
However low and mid cap stocks may continue to be in play but a bearish sentiment could limit gains.
The KLCI is expected to trade at between 1860 points and 1880 points coming week.