Malaysia KLCI:Testing resistances

Markets around the world and rebounded in the middle of March following a rally in the US in March. Investors went bargain hunting as there was slight improvement in volume. The Malaysian market has always been defensive. The KLCI rebounded about 8% from the month low while most other major markets rose more than 20% from the low. The KLCI is now at the resistance level which is a one-month’s high. The benchmark index closed at 907.01, 38.27 points or 4% higher on-month. Malaysian PM Abdullah has just handed-over his premiership to his Deputy PM Najib and the stock market seems to be accepting it well.


Weekly KLCI chart as at 3 April 2009 using NextVIEW Advisor. Click on chart for larger view.

The KLCI is currently above the short to long term 30 to 90-day moving averages, which are currently converging. The KLCI has been below this moving average since February last year. The KLCI failed to stay above this average when it broke above these averages last month, so this is the second time this year. This is a technical indication that the market may have bottomed. The momentum has started bullish as well. RSI and Momentum indicators are favouring the bulls. Despite the bullish movement, expect resistance when the KLCI goes to about 920 points with a stronger and significant resistance at 940 points.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.