VK TECHNALYSIS SERVICES (VK 技术分析服务): Technical Commentary on KLCI 05/02/10

Friday, February 5, 2010

Technical Commentary on KLCI 05/02/10

The world markets were dropping seriously today. Our market cannot escape from this major correction. FBMKLCI open with gap down and stay below 1250 for most of the trading session and closed at 1247.90 (-17.13, -1.35%). FBMKLCI had fallen below 1250, this means the bear trend had started. Another confirmation of bear trend is, FBMKLCI had formed a lower high at 1267, which is lower than previous high 1308. Right now FBMKLCI nearest resistance level is 1250 and the next resistance level is 1255. The immediate support level is 1236. The market’s volume had increased by 47.9% today, traded with 918 MIL shares today. The increase of market volume also means that the selling pressure is high however there are buyers willing to buy at lower price and hope to make some profit if the market rebound. There are 162 up counters and 589 down counters.

FBMKLCI Indicators
Bollinger band had expanded 1% with the candlestick still stay below BBMB, indicates FBMKLCI bear trend will continue.

RSI stay below the threshold 30 at 24.36, indicates FBMKLCI is bearish and oversold.

STC %K and %D stay at 0.79 and 16.7 respectively, indicates FBMKLCI quite bearish and oversold.

The MACD line dipped below ZERO and the rounding bottom of the histogram had been cancelled after FBMKLCI big drop today. This indicates the bear trend will continue.

All the indicators above remain bearish for FBMKLCI. Please refer to the picture of FBMKLCI daily chart for your reference.

The mid-term view of KLCI’s bullish trend had been broken today after FBMKLCI dipped below 1250. All the indicators like MACD, STC and RSI are bearish. The mid-term resistance is 1250 and the support is 1236. Please refer to the picture of FBMKLCI weekly chart for your reference.

If bear trend is started, how far it will go?

I did an analysis on the FBMKLCI weekly chart, we assume FBMKLCI is in wave A now. The support of wave A is about 1200. We ignore the smaller waves in the wave A. This should happen from Jan 22nd to the end of Feb time frame. Likely it will found a support at 1200 and rebound from there to form a wave B. The time frame for wave B likely between Mar to APR. The wave B likely resisted by 1250-1255 or 1267. From these points, a wave C will be started and this is the most serious correction of the 3 waves. The time frame should be from Apr to June. Possible support for wave C is 1100. If 1100 is broken, then the next support is 1036. If 1036 is broken, then 920 should be a solid support for FBMKLCI. If wave C break down 1100, the time frame should drag longer probably until Aug 2010. Please refer to the picture below.

Stock Market Language 股市语言

In the stock market everyone hope to "Buy Low Sell High". In practical, it is very difficult to achieve. There are 5% of the investors are able to achieve that however they are not buying at the lowest or selling at the highest. In other word they buy at the RIGHT timing and sell at the RIGHT timing.
每个人都希望在股市“低买高卖”。但实际上是非常困难的。只有5％的投资者能够实现，但是他们不是在最低买进或在最高卖出。换句话说，他们是在适当的时机买进和卖出。

Human nature is full of Greed and Fear. The emotion of human was reflected on the movement of the stocks' prices.
股票的价格变动中反映出人性的贪婪和恐惧。

What should we do while waiting for the market to correct?

No stock to buy very boring right? While you are waiting for the market to correct, you can actually sharpen yourself and get more funds ready for the next run.

1. You can subscript Winchart to sharpen your skill. VK Technalysis Services provides training twice a month in North Malaysia. Other regions please refer to http://www.straitsindex.com/.

2. EPF contributors have an option to withdraw EPF funds to invest on stocks from account No. 1 to standby and get ready for the next run.

For details, please contact VK Technalysis Services
Penang: 012-4168868 (Vincent Liew)
Kedah and Perlis: 012-4259118 (JK)
B'worth, Kulim and BM : 012-4212533 (Wong)

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