08 May8-May KLCI Index, Don’t be too Optimistic

8-May KLCI Index, Don’t be too Optimistic

Date: 8-May-2012

Malaysia KLCI Index: 1590 point

 

Malaysia KLCI Index Overview

Malaysia KLCI index close at 1590 points, rise 0.4%.  The KLCI index start with 1584 points and moving side way, after 4pm, the index pull up reaching 1590 points.  During last article, we talked about KLCI index is having a rebound from 60D-MA however still experiencing the resistance from 20D-MA.  During these 2 days, the index move exactly as the moving average trend line.

Now 20D-MA and very close to 60D-MA.  Currently 60D-MA is reaching the height at 1581 points whereby 20D-MA is moving down to 1588 points.  These 2 moving average trend line is deciding the coming trend.

 

Below trend chart is Malaysia KLCI index trend chart on 8/May.

 

 

Moving Average

From our previous article, we already stated the resistance for KLCI index is within 1591-1594 points.  The index has tested twice to break-though this resistance but yet to success.

KLCI index still move relatively conscious.  The index is moving sideway within 20D-MA and 60D-MA trend line.  From moving average knowledge, we could conclude the 60D-MA is at moving upward and 20D-MA is moving downward.  Moving average trend line, we are not able to see a clear direction now.

 

Volume Analysis

As compare to price action, volume action is clear cut.  From the volume action, the 20D-VMA is at moving downward, this reveals that the KLCI index has no good support to move upward from here.

Under volume shrinkage, the index is facing more difficulty to break though 20D-MA, even break through the 20D-MA, it will retract back.

 

Stochastic & MACD Indicator

MACD indicator is seeing an crossover, this indicate the KLCI index is at the good position to form a stronger rebound, however the entire trend still at moving downward.

 

Malaysia KLCI Index Summary

KLCI index still facing strong resistance to move upward, we could see this clearly from volume analysis, this is because lacking in transaction volume is unable to push the index higher.

Even the MACD reveals currently may be the good movement to start another rebound but the height cannot be too optimistic.  In other words, the KLCI index may break through the 20D-MA but will retract back.  Under this circumstance, investors should not be too optimistic for catching a rebound.  The rebound height is very hard to determine.

Malaysia KLCI Index Trading Strategy

If investor have not already carry out profit taking, this is the good moment to do so.