Market Outlook as at February 29, 2008

The KLCI ended the morning session with a drop of 24.17 points to close at 1333.23. As such, the KLCI has just broken below its strong horizontal support of 1340. A quick recovery is needed, failing which the KLCI could slide further to test the psychological 1300 level, the horizontal support of 1285 level and the uptrend line support of 1265.


Chart: KLCI's weekly chart as at February 29, 2008 (courtesy of Quickcharts)

Looking at the price chart as well as the MACD indicator and the moving averages, I think the market is probably heading for further slides, possibly culminating with a selling climax sometime this week. However, with the election scheduled for March 8, I do expect some buying support, as some investors might be positioning themselves for a post-election rally.