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It has been a great May for the KLCI. Instead of the sell in May and go away, the KLCI has been able to defy this maxim and continue to move higher.
A triangle breakout help to bring about a continuation pattern in the KLCI. In my opinion, the KLCI might continue to move up and meet the 200 MA.
It may have some resistance there but if it can overcome the 200 MA, then I think it can move higher in the future.
A picture is worth a thousand words they say.
The above chart does paint a picture of bullishness for the KLCI.
In the past we saw how the KLCI formed a triangle in the daily chart. Once the KLCI broke out of the triangle, this told us that it will be a continuation move up.
The triangle coincides with a 20 MA / 50 MA bullish cross and this also help to give traders a bullish bias.
I think the KLCI has more than meet its target for the daily triangle pattern.
We acquire the target by taking the height of the pattern from the apex of the triangle.
If you check the 60 min chart yourself, as long as the KLCI stays above the rising 20 MA and 50 MA then I think it is possible for the KLCI to continue to move higher until it hits the 200 day moving average.
That will be the yellow line on the chart above.
If it meets the 200 MA then it might encounter resistance. We will see if it can overcome the 200 MA from there.
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