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Technical Analysis - KLSE CI
your feedbackUpdated on Friday March 10, 2000
see also statistics on klse ci's past ralliesTrendline studies
There is no sign yet that KLSE's bull market from 1/9/98 at about 260 has ended. Longterm upward trendline is still not broken to the downside yet. For information, STI (Singapore's Straits Times Index) has
broken its longterm upward trendline to the downside. STI is much bearish in longterm view, but in medium and short term view it could still be attractive enough for long position players. In view of the fact that KLSE market had in these few years always lagged behind leading Asian markets like Singapore, Hong Kong and Japan markets, it is worrying that KLSE may one day follow STI. This is warranted by fundamentals as the momentum of interest rates now is upward.Internet stocks may be not join this possible bearishness because firstly, internet stocks rely on capital market to raise fund more than bank loans or anything else, secondly world's number of internet users could be increasing at an accelerating rate and so are the level of innovativeness. More and
more companies see e-commerce as a neccessity rather than a choice and they just can't wait to jump into it.While major index had been a good reference for general market's movement, recently there had been a
great divergence of movement direction between technology/internet stocks and conventional stocks, e.g. Dow Jones had been showing weaknesses for more than a month but Nasdaq kept on recording new high.
Writer's own customised indicators
No rally is confirmed yet thus it is risky to speculate short-term through buy-on-strength strategy. Cut loss point is 922. Uptrend reconfirmation point is 1,013, i.e all bearish forecast will be negated/cancelled if this level is broken to the upside. If 922 is broken to the downside, with the exception of a handful of red-hot internet/technology/telecommunications stocks, the broad market may move along with KLSE CI towards below 900 level.
While major index had been a good reference for general market's movement, recently there had been
a great divergence of movement direction between technology/internet stocks and conventional stocks, e.g. Dow Jones had been showing weaknesses for more than a month but Nasdaq kept on hitting new historical high.Download auto-calculation spreadsheet programme incorporated with these indicators (about 1MB)
Theoretical discussion on these indicators
Chart pattern: head and shoulders (short-medium term)
Have most stale bulls at 1,000 significantly absorbed by recent buying? If not the selling pressure on KLSE will be on again. This will be confirmed if the head and shoulders' neckline of 922 is broken to the downside and target could be 831-865, unless KLSE CI rises back above 922 again then the pattern will be negated/cancelled.
