Analysis: KLCI, FKLI (CI Futures) & Dow Jones

KLCI - seems to be holding out reasonably well. Technically positives are:
1) I especially like it that the mid-Bollinger Band is giving it solid support. BB is still in rising mode & it has not turned downwards. If it can stay within the upper BB channel then index has the potential to rise again from here.
2) The support line of 953 is holding up well so far.
3) A bullish Hammer has formed & when this happens at a support line it is positive. This has formed at the mid BB line so technically it is a good sign showing that buyers are coming in at the support line
4) It is also comfortably above the 30-day MAV another good support line for the index
5) Weekly MACD & RSI are still positive.
6) Finally Vol is rising, even though it is 40% Mesdaq volumes, but that was also the case earlier in the year & in June/July. If this Vol is maintained it is a good sign that maybe Buyers are returning to the market.

Technical negatives:
1) Daily MACD & RSI still turning down. But this may lag the market a bit & if in next 2 days market moves up, then they should reverse upwards.
2) Hmmm hard to find other negatives altho the last minute push to keep the CI up over the last few days does not give a true picture of the market. But this has happened before & in the end the support was enough to keep it steady until selling pressure dissipates leading buyers to come in & the market to rise.

Fundamentally:
1) Oil price falls are a good sign not just for the CI but for global economies. It eases inflationary pressures & may mean the Federal Reserve will hold rates steady, good for us & the world economy.
2) Commodity prices have also been falling & this eases raw material pricing pressures & eases inflation concerns.
3) Tun Mahathir's tirades against the Govt will still be there but it will be of less concern to everyone incl foreign investors. Reuters carried a report on Monday entitled: "UMNO Humbles ex-Premier Mahathir". Foreigners will take such headlines to mean they can worry less about Tun & that the PM's hand is stronger. Unless Tun can come up with some really dirty laundry on Pak Lah, otherwise this is less of a concern for now.

Overall, the CI is looking positive again. The one signal we must watch is the mid BB. If index falls below this then be prepared to get out, if not then the bear is losing & the bull may just be on the verge of returning.


FKLI (CI Futures) - the same comments hold for Futures. It is following the same trend as the CI & also has support at the 10 & 30-day MAV. As long as it holds above the mid-BB it should move up. Going long is indicated here with a sell order in place if it falls below the Mid-BB.


Dow Jones is bullish. BB is rising & index is in the upper BB channel & rising. Weekly MACD made a golden cross early Sept & weekly RSI is +ve. Daily MACD is about to make a +ve cross. Volumes are rising. With falling oil prices & rising corporate profits prices are being well supported. Falling commodity prices ease inflation worries & the bet is that Feds will hold interest steady. Only worry is a falling housing industry but economists seem to think it will be a soft landing, I am not too sure about that. Regardless, TA is positive on the Dow. A rising Dow will lend support to world markets & that will also support the CI.