KLCI & Futures: Breakdown from Rising Wedge

KLCI- Yesterday (Wed) prices broke down from the Rising Wedge (RW) in a big way confirming the top reversal pattern. However, despite the big falls Vol has not been very high. But note that for bearish moves, volumes do not have to be very high, as prices can breakdown very fast because there are basically no buyers. The first initial support is 953. We may see a technical rebound at this point but because the market is weak the rebound will most likely be small & only a temporary delay of the inevitable further fall towards 940 & 921. Whether it falls further to 900 or 883 remains to be seen. Regardless the trend in the CI is weak with further downside likely.


FKLI - Futures had a big drop on Tuesday & some stability today. The discount to the CI is only 8 points now. Daily MACD has made a bearish cross & RSI has fallen, indicating a weakening market. If the CI stabilises temporarily today, so might the Futures. At this moment there is a bearish slant to the market & we definitely cannot state that this is the end of the correction. The likelyhood is that bigger corrections are in store & this is just a temporary respite. Strong support at 940 & 921.