What a difference a day made! A spring shower has turned into a thunderstorm! The FBM-KLCI broke through the 10 and 20-day SMA line like knife cutting through butter. More importantly, the FBM-KLCI has again broken below its long-term uptrend line support at 1540. With this bearish technical breakdown, we are again staring at the prospect of a market which may have peaked & the scenario of choppy trading or worse still, more downside ahead.
The immediate support for the index would be the 50 & 100-day SMA line at 1518-1520. Thereafter, the index may find support at the psychological 1500 level & finally the strong horizontal support at 1475. In my book, a break below 1475 would be the start of a bear market.
Chart 1: FBM-KLCI's daily chart as at April 11, 2011 (Source: Tradesignum)
I have appended the weekly chart for FBM-KLCI to show the similarities & differences between the current market & the market top in 2008. Is the market tracing out a top?
Chart: FBM-KLCI's weekly chart as at April 12, 2011_3.00pm (Source: Quickcharts)
In view of the bearish breakdown noted above, we should stay sideline for now.
1 comment:
More downside might come.
Sideaway and cut lost might be the best trading strategy now. What you say?
Support ROCKET ! BN -pls get lost from swak ^_^
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