Temporary bottom

The market has been bearish for the last few days as a spill over effect of the Dow's poor performance, however, our KLCI has been showing good resilience. As usual, the market started off the day with a slight positive sentiment with the CI registering the days high of 1385.89 within the first half an hour, thereafter, it went into the red territory hitting the low of 1370.33 and made a "u" turn upward after 3 pm, and as usual the magic hand brings the CI to close at 1383.43 (+1.08, +0.078%) forming a bottom reversal candlestick known as Hammer. From the chart, one can see that our CI is finding good support around the 1380 level, the market breadth of 420 gainers to 388 losers shows that the KLSE is not at all that bearish, in fact many counters such as KBES, MPHB, CBSTECH are showing signs that they can't wait to go up. Well, as the saying, "what goes up must come down, and what came down will go up too", that is how the market works. The broad trend of the KLCI is still up, the present is only a minor correction within a major uptrend. The market may go "yo-yo" between 1380 and 1413 to build a base before it climb further up, however, I believe that with the good effort of the whole nation our KLCI will continue to move up, slowly but steadily because Malaysia boleh.

On the regional side, Hang Seng Index (HSI) also showed the formation of a Hammer-like bottom reversal candlestick. From the chart one can see the immediate support of the HSI on the 50 day MA. The next major support for the HSI is around 26500, if this level can't hold, then the HSI will really turn bear. HSI's volatility is really different from that of KLCI, one must learn to get used to it. It is just like going to Indonesia, one must get used to the juta (million) of Rupiah that one carries, don't be nervours.

As for the DJI, it is showing a bullish Engulfing bottom reversal candlestick, the bulls are fighting back. As mentioned in the previous post, the 12950 level must be defended for the uptrend to be maintained, it did. With this, I believe a temporary bottom is formed, and DJI may go into a choppy sideway market while waiting for their problems to be solved.

Back to our KLSE, some of the counters that shows strong upward move amid the bearish time are MPHBWB, KIANJOO, CBSTECH, HARNLEN, KBES, and IE.

Disclaimer: The above is not a recommendation to buy or sell, all suggestions mentioned are purely for academic study purposes for our trend trader club members only, and the author may have personal interest and position in some of the examples mentioned. Any losses incurred if you were to trade base on the study examples above is sole your own responsibility. Do consult your dealer before taking any action.