Update: KLCI, CI Futures & Plantation Index

1) The KLCI daily appears to be losing momentum & is consolidating. Volume has been receding for the last 3 weeks while the MACD & RSI are getting flat. It has tried on several occassions to break the 940 resistance but has failed. What is more interesting is the weekly chart (see attached). There appears to be a spinning top formation this week which may show an impending correction. It still needs confirmation. If Monday opens & closes below Friday's close, then we may have the confirmation. Then the correction will be confirmed & the next support levels are 931 & 925 (the IHS neckline). A correction to the neckline will be good for the market. But a break below this will be bad with next support at 906 & 900. Lets hope it stays above 925.
Interestingly everyone I know is calling for a correction especially the Technical Analysts but so far the market is not complying. However, I think its just a matter of time.


2) CI Futures is still bullish with a bullish engulfing pattern on Friday. There is still a 17 point discount to the KLCI but the margin is narrowing. However 921 is a fairly strong resistance, so it will need some volume to break it. Vol has been rising, so it may happen. I think we have to wait for Monday's action to find the next trend. RSI & MACD are both flat.


3) Plantation index rose again Friday after a week of falling. However this was not accompanied by rising volume. It looks like 3443 will lend it some strong support, so if it bounces off this level then expect to see the bullish trend resume again which will bode well for plantation stocks. However, the weekly chart is showing a spinning top formation. This indicates a possible correction, so if prices open below Friday & stay below that on Monday, we may see the correction which should hopefully be a mild one. The weekly MACD & RSI are rising, so it is still very positive. A bigger correction will take it to the neckline of IHS at 3352 & it should bounce off this & then rise to the target of 3639.