KLCI: The Biggest Rise In The History of Malaysia

Today is a remarkable day with the index closing 57.25 points higher from last Friday’s closing, creating the biggest one-day gain in Malaysia’s history, no thanks to BN’s victory in the latest general election. The index touched the high of 1824.44 in the morning before falling sharply to the 1740+ level and had been trading sideway since, within a 12-points range for the rest of the trading session. The extreme movement of the index had caught a lot of investors by surprise and most are unsure of what to expect next and what to do with their current position.

klci (1) (1)

Looking solely at the chart, the huge black candlestick with long upper tail indicates that distribution activities are going on. The daily volume is higher than average but certainly not enough to sustain today’s price level. For today’s price spread and price action, volume SHOULD be at around 5billion at least to indicate strong demand. This bearish view is, however, contradictory to the fact that the spot month futures closed at a hefty 11.5 points premium to the cash market. Given the mixed indications, we have no choice but to rely on the price movement of the index in the next few days to tell us how will the market fare in the near term. If the index manages to stay within today’s lowest price (1743) and opening price (1771) in the next few trading days, then the index is expected to move sideway with an upward bias. Alternatively, if it falls below today’s low, chances are it will continue its downward movment and is expected to rebound at its previous all-time high of 1718. Regardless of the immediate term’s price movement, the medium term outlook is very bullish, with the effective trading range shifting from the 1600-1720 level to the 1680-1820 level.

Leave a Reply

Connect with:

WordPress Social Login is not configured yet!
Please visit the Settings\ WP Social Login administration page to configure this plugin.
For more information please refer to the plugin online user guide or contact us at hybridauth.sourceforge.net

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>