KLCI Daily 29 May 2014 - Spot the weakness

KLCI Daily                                                                                                  Hafiz Rusli

Share analysis

Positive closing for the past few days followed by low volume signify bearish divergence that will lead to further downtrend. DMI indicator send distress signal as D- and ADX lines pointing down. I reckon that, correction is imminent.  So, in today write up I will focus more on the support level of KLCI based on the daily chart. Minor support will be at 1,863 level. Penetration of minor support will give us an early signal that the correction may persist. First support zone is plotted approximately between Fibonacci retracement of

Dow Jones Daily 26 May 2014

Dow Jones Daily Chart                                                                          Hafiz Rusli

Share analysis

On the daily chart, strong uptrend can be seen on the latest closing as the index rebound perfectly around support level. On the DMI indicator, strength of the uptrend momentum seems promising as D+ and ADX lines pointing up while D- pointing down. Failure to penetrate previous high will lead to sideways movement. First support level is crucial in determining the strength of the movement. The market expect to be quite towards mid-year as no significant news will be issue.

Trading strategy

Buy on weakness is the best strategy for long term investor. For swing trader, buy on breakout is recommended. New long can be initiate on the breakout. Use volume, candle stick and other indicator to confirm the breakout. Conservative investor may stay sideline as the market expected be quit throughout the month.

Price projection

Resistance – 16,730 (previous high)       17,000 (psychological level)

Support -  16,360 (significant support level)     16,000 (major support level)

KLCI Daily 23 MAY 2014

KLCI INDEX                                                                                                   HAFIZ RUSLI

Share analysis

Based on the daily chart, uptrend still intact as the index made higher high higher low. However for the past three days, market correction or profit taking activities can be seen at market top as the index climb to all time high, 1,880 level. DMI indicator shows flat reading indicates that the uptrend is losing momentum and the market will be flat for the next few days. So, I reckon that short term correction is imminent. We used Fibonacci retracement to determine the support level on the index. Failure to stay above 1,836 level (61.8% fibs retracement), will lead to further downtrend and the next psychological support will be at 1,800 level.  

Trading strategy

Since the market is flat and lack of volume, it is better to stay sideline. Buy on weakness is the best strategy for long term investor. New long can be initiate at market bottom with the confirmation of market rebound. Day trader may bet on mid cap and small cap stock that usually will surge next after big cap. Buy on breakout is the best trading solution for day trader. Use volume and candle stick as confirmation.

Price projection

Resistance – 1,880 (previous high),   1,900 (psychological resistance)

Support –      1,870 (immediate support),   1,852 (38.2% fibs),    1,845 (50% fibs)