The KLCI made a new high of 1375 today. Unfortunately, the index lost all its gain to close at 1360. In Japanese candlestick charting method, today's market action would be represented by a gravestone doji. Generally, a doji conveys a sense of indecision between buyers & sellers, but a gravestone doji (like its opposite counterpart, the dragonfly doji) normally appears at market turning points. Assuming that this is a potentially toppish signal, this candlestick still requires a bearish confirmation, such as a gap down or a long black candlestick & high accompanying volume.
The appearance of the gravestone doji is certainly a disappointment to me. The way the KLCI has been moving in the past few trading days, I was getting a feeling that the correction is nearly over. The next upside was just around the corner. Well, we will have to wait and see for the next few days for clearer signs of the market ahead.
Chart: KLCI's daily chart as at June 4 (courtesy of Tradesignum.com)
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