Short rebound expected, but down trend may resume

The Kuala Lumpur stock market was very uncertain the whole of last week as the KLCI was trading in a very tight range. Since mid of May, the KLCI was in a down trend mode. The trend is still strong downwards, with the moving average indicators (short to long term) is declining and the KLCI is about 8% below the averages.

The momentum of the down trend is strong, with indicators like RSI and Momentum are making lower lows. However, the indicators also show that the KLCI is oversold and therefore a technical rebound is expected but because the down trend is strong, the KLCI is like a dead cat falling. The rebound may be short and the down trend may resume. The rebound may face resistance at 1,180 points and support level is at 1,000 points. By Benny Lee