KLCI ... Remain Sideways With Bullish Bias

The KLCI was traded sideways within the support and resistance levels of 1860 points and 1880 points. Technically the index had turned into an uptrend as it broke and stayed above the short term 30 day MA. However, the short term 30 day MA has been whipsawed for the past one month and this can continue to happen when the market lacks direction.

Momentum was flat in the past few weeks but generally do not see any selling strength after past one week’s performance. Momentum indicators like the RSI and Momentum Oscillator continued to whipsaw as the mid level and did not show any clear direction.

Furthermore, the Bollinger Bands remained firm while the MACD indicator was below its MA or trigger line. These momentum indicators show that the market is probably going to stay sideways.

With interest rates remaining low in Europe, we may see some hot money coming into Asia. However the Malaysian market has always been defensive and we may only see some benefit from the strong regional market performance.

Going forward, the KLCI to remain in a sideways correction with a bullish bias. The index may test the historical high at 1887 points if it can break above the immediate resistance level at 1880 points. Support level remains at the 1860 points.