KL Composite Index: Still expected to be range bound

The KLCI was in a slight bullish mode last month but still remains in the sideway range of between 1,150 and 1,300 points. The KLCI closed at 1271.48 points on the 2nd of May after testing the resistance level with a high of 1,305.09 points last month. The KLCI actually pulled-back from the resistance level to the support level of the short term up trend on Friday.

The short term trend is up, but the underlying trend is still down and for the KLCI to change its underlying trend, it has to break and stay above the 1,300 points resistance level. The momentum is still currently holding up, with the RSI indicator showing a bullish convergence on the daily chart. However, the resistance may be strong as there are no catalysts in the local scene to boost the market further. Therefore, the KLCI is expected to continue to be range bound between the support and resistance levels of 1,150 and 1,300 points respectively. If the KLCI breaks and stay above the resistance level, the next resistance level is at 1,340 points. By Benny Lee