Technical analysis and outlook for the Malaysian stock market index.
Continue to stay bearish or cautious on the KLCI.
It is still below the 60 min 20 MA, 50 MA and 200 MA. This is not a picture of strength in the 60 min chart. One should not be bullish on the KLCI unless it goes back above the 60 min downtrend line.
As you can see from the chart below, the KLCI forms a 60 min consolidation box. If KLCI drops below this box there is a possibility that it might continue to go lower. If it can go back above this box then it could go higher.
In the previous analysis I anticipated a reversal, however there was no follow through. So no action should be taken on the part of traders.
Anticipation is one thing, taking action is another.
First the KLCI did not stay above the 60 min 200 MA.
Secondly it never broke above the 60 min downtrend line. Stay bearish or cautious as long as KLCI is below the downtrend line.
The KLCI had a correction recently but things are becoming a bit clearer now.
There is a possibility that KLCI might break a 60 min downtrend line. If it is able to break above this downtrend line, then it might go higher.
I would like to see stay above the 60 min 200 MA as well as this moving average can be a support. I can see that the KLCI is forming a higher low. Just an early guess but if it breaks above the 60 min downtrend line then we have a more concrete answer to that.
As long as KLCI stays above the 60 min 200 MA and breaks above the downtrend line then it is very likely it will reverse the 60 min downtrend and move higher.
Today the KLCI has a nasty drop. We saw how a possible 60 min ascending triangle was forming in the KLCI. Ascending triangles works both ways.
If it breaks above the top of the pattern, it is likely to go higher. On the other hand if it drops below the lower trend line then the index / stock is likely to go lower, which is what happened to the KLCI today.
There could be a support from the 60 min 200 MA but one should continue to be cautious about the KLCI unless it breaks back above the trend line.
Might be a 60 min ascending triangle or 60 min cup with handle might be forming. The trick is to wait for the breakout above the consolidation.
Well, it seems that the KLCI is able to stay above the box that I drew.
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