The support trend channel already breached by KLCI on 16 June 2009. On Friday the 19th, it closed at 1,059.50 pt still close to 1,060, the earlier immediate (st) support turned resistance. Now, since the index is still at the border of 1,060 pt, can KLCI look forward to previous target/resistance of 1,110 pt ?
Less chance of that, last Friday was not strong enough to provide the momentum to follow through. We are more into heading south fast now.
So, the focus is a correction or consolidation. What can we expect now? With the beginning of current correction wave (4), wave 3 that we enjoyed for a while has ended. Now we can start looking for 1,030 pt as the first likely rebound level. I will say it will go down beyond that, 995 pt is more likely at this time. Both are Fibonacci retracement level. See the KLSE Composite Index Daily chart at the bottom.
Many counters especially speculative counters display a candlestick reversal signal (hammer) on last Friday. Look interesting, but, considering the overall market, let's ignore them for a while.
Should it be great if we can go short with KLCI and the counters now. Well, you can short the index with KLCI Future but we still don't have official short mechanism with individual counters. Some tried to short (intra day) last two weeks and get caught when the counters suspended. Big trouble when you get caught, not just of burned money but SC will come to you.
