Market Outlook as at August 29th

The KLCI rebounded strongly on Friday to close at 1100.50. Gainers out-numbered losers 384 to 223, on volume traded of 520 million units. The rebound coincided with the announcement of the 2009 Budget; month-end closing; and, Merdeka Day's long weekend.

The KLCI may do a follow-through rally this morning but the medium-term downtrend line will pose resistance to any upside move at the 1108-1110 level. Friday's 30-point rally had prompted both MACD & Williams' %R indicators to hook up-- giving a potentially positive short-term outlook to the market. Nevertheless, with the Dow dropping 172 points overnight & nothing very substantive in the announced Budget, I believe that Friday's rally could be a one-day affair.


Chart: KLCI's daily chart as at August 29th (source: Quickcharts)