The FBM KLCI fell by slightly more than 20 pts at one point during yesterday’s session. Nevertheless, the index recouped more than 50% of the day’s losses and ended with only a 6.43-pt loss. As a result, a “non-classical Hammer”, which is a bullish reversal pattern, was printed on the daily chart. This is a non-classical reversal formation because the real body of the yesterday’s candlestick was represented by the 6.43-pt loss and not a positive closing. For this type of candlestick pattern, further confirmation is very important. Moreover, it looks like the “non-classical Hammer” was constructed at slightly below uptrend line 1.
At this level, it is hard to tell if the market has violated the important uptrend line which has been supporting the FBM KLCI’s rising trend since May last year. Firstly, there was an obvious attempt at a rebound yesterday and the index successfully recouped more than 50% of its losses. On the other hand, yesterday’s market action also looks like a failed rebound attempt to go above the uptrend line 1.
We will need to see the market action for the next few trading days to determine the index’s nearterm direction. It looks like the minor breakout that occurred at above uptrend 1 could potentially lead to major damage ahead. Also, we would not know if the projected uptrend line as it is portrayed in the above daily chart has been correctly drawn as this line will not be confirmed in the near future in view of the FBM KLCI’s current technical landscape.
As it looks like the index is struggling at around uptrend line 1, we are beginning to become cautious on our near-term bullish bias. But based on the facts mentioned above, it is still too early
to change our view.
Next support is detected at the 1,500 pt-psychological mark. Below it, look for the November low of 1,493 pt-level and the October low of 1,474 pt-level as the next supports. To the upside, there is immediate resistance at the 1,532 pt-level, followed by the 1,558 to 1,567-pt downside gap created last Friday.
At this level, it is hard to tell if the market has violated the important uptrend line which has been supporting the FBM KLCI’s rising trend since May last year. Firstly, there was an obvious attempt at a rebound yesterday and the index successfully recouped more than 50% of its losses. On the other hand, yesterday’s market action also looks like a failed rebound attempt to go above the uptrend line 1.
We will need to see the market action for the next few trading days to determine the index’s nearterm direction. It looks like the minor breakout that occurred at above uptrend 1 could potentially lead to major damage ahead. Also, we would not know if the projected uptrend line as it is portrayed in the above daily chart has been correctly drawn as this line will not be confirmed in the near future in view of the FBM KLCI’s current technical landscape.
As it looks like the index is struggling at around uptrend line 1, we are beginning to become cautious on our near-term bullish bias. But based on the facts mentioned above, it is still too early
to change our view.
Next support is detected at the 1,500 pt-psychological mark. Below it, look for the November low of 1,493 pt-level and the October low of 1,474 pt-level as the next supports. To the upside, there is immediate resistance at the 1,532 pt-level, followed by the 1,558 to 1,567-pt downside gap created last Friday.
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