KL Composite Index: Down trend reversal

The political scene seems to be more interesting than the financial markets, now with stronger opposition voice in parliament and new state governments trying to settle down. In the stock market, the KLCI went into a trading range last month. It did not even try to test the 1,340 points resistance level. The KLCI only managed to went to as high as 1,305.09 points since last month before settling at 1,261.82.



On the daily chart, the KLCI has formed a double top chart formation which indicates that the KLCI is now at a toppish position. The double top formation was confirmed when it broke its neckline at 1,270 points just a few days ago. The RSI indicator indicates a strong resistance and is now below 50, where bears are currently in-charge. The KLCI is now in a down trend reversal and is expected to test its immediate support level at 1,215 points, while stronger support level is at 1,150 points. Resistance is lowered to 1,300 points from 1,340 points because of stronger pressure downwards. By Benny Lee