KLCI to test its short-term uptrend

The KLCI looks set to test its short-term uptrend line support at 870-73. A break below the uptrend line could lead to a pick-up in the present downside correction, with immediate support at 850. Thereafter, we can expect support at 835 (the December low) or possibly at 801 (the low recorded on October 28). The ongoing correction reflects continuous negative news flow on the economic front as well as current domestic political development. Under these circumstances, it is advisable to stay on the sideline until a clearer picture has emerged.


Chart: KLCI's daily chart as at Jan 30, 2009 (source: Quickcharts)