Technical Commentary 07/01/10

KLCI went as high as 1299.70 in the intraday but closed negative at 1291.17 (-1.75, -0.1%). It was resisted by 1300 resistance, which we forecast earlier. The trading volume was reduced by –11% at 1.47 bil shares however it is still above 40 days VMA. This means that there are still many buyers willing to collect the shares from the sellers to keep the market active. Technically KLCI is bearish biased in the short term after it had risen for 3 days. The candlestick formed a shooting star at the closing; this signal a further correction or consolidation will follow up. By switching the chart over to weekly, the mid-term view on KLCI is still bullish.

There are 324 up counters and 449 down counters. The RSI is slightly below 70 level thresholds closed at 69.1, STC retracted with %K at 80.16 and %D at 89.75. The Bollinger band is 0%, this signal a consolidation or correction will happen. The MACD had slowing down and it might form a rounding top if it further correct tomorrow. In short, all indicators shown that KLCI short-term direction is bearish biased. KLCI nearest resistance level is at 1300. The support level is at 1288, which it broke out yesterday and the next support level is at the Bollinger mid-band around 1276.

By scanning through the active counters, there are many counters open higher than yesterday but closed below yesterday high. Many candlesticks formed a doji star, shooting star, evening star, hanging man or dark cloud cover. This signal a further consolidation or correction on those stocks after they had been run up for 3 days. However there are certain stocks, which did not run on the last 3 days, seem to take over the show. Those stocks I saw are Notion, Coastal and HSPlant. Please refer to the KLCI daily chart below.