The KLSE saw some active buying yesterday with the CI surged up 12.34 points to 1154.09 and volume rose to 785 million shares. This volume coupled with many active 3rd liners counters rising indicated that the retail players jump in actively after a 2 months down trend since 20th May from the 1302 level. However, one need to exercise caution when trading under the present scenarios. I would say that the market is at present only experiencing a technical rebound after an almost continuous fall for 2 months under all kind of negative factors, be it economically or politically.Technically one can see from the chart that the CI was deeply oversold and fall beyond the lower LR channel, a pull back or rebound is expected. As mentioned previously, CI has to go above the 1160 level in order to stay within the long term uptrend channel. At the moment, the overhead resistance is at 1157 which was the low registered on 10 Mac 08. The downtrend line and the 30 days MA are also pointing at the same level which make the 1160 level difficult to cross at the moment. The CI may pull back a little before it gathers enough strength to break the resistance at 1160. A small inverted head and shoulder was formed, and the CI break through the neckline yesterday, this indicates that if CI is able to break through the 1160 level, it may have a chance to test the 1200 level indicated by the brown dotted line. This is a deciding moment in which if CI can't hold well and head south again (with more surprises surfacing), then we may even see it going to the 1080 level.
Hopefully the coming budget 2009 can inject some life into the market which it badly needed. Do keep track on this blog for trading opportunities.
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