The moment this acticle wrote, KLCI index is at 1437.42 drop 27.93 points! Recap on previous market analyst, they have noted that the medium-term downtrend line for FBMKLCI would be tested soon and it's actually happen which the index managed to easily brushed aside the strong horizontal resistance at 1445-1450 yesterday 17 October 2011 as my previous articles. A break above that downtrend line would be positive for the market as it would signal a pause in the downtrend. But, how far would this rally go?
If the market action in 2008 can be a guide, the current rally's next stiff resistance would be at the 20 & 40-week SMA lines at 1471-1483. On weakness, it may drop back to the breakout level of the previous downtrend line at 1435. I expect the market to trade within this band- between 1435 & 1483- for the next few weeks. A breakout of the band (which has yet to be formed) would then point the way forward for the market either the BEAR continue or BULL.
In conclusion, those who hold a bearish view of the market should look to sell but you can afford to pace your selling. If possible, you should sell into strength at 1471-1483 (and possibly buying on dips to 1435). However, those who think otherwise, you can choose to hold & add to their position on market weakness (by buying on dips to 1435).
No comments:
Post a Comment