Again, not much has changed since the last report two weeks back. In the short term, price is still trading within the 1480 – 1525 range, the 2-day dip aside, while the longer term trend has not turned down yet as the important 1470 support still holds.
It is all too clear now that support is at current level, around 1470 – 1480, as price has bounced off this level for more than 5 times in the past 6 weeks. In fact, daily RSI is forming a series of higher lows, despite the lower lows in price (chart 2), which can be taken as positive. But on the other hand, RSI rebound since early Feb is rather weak, it stayed at bottom half for most part (chart 2), which indicate weak momentum. The 30-mins chart is indicating the same, with a top divergence (chart 1), in spite of strong rebound in global equities last week. Therefore, there is a risk of price falling unless price can gain some momentum. But again, falling price can only be confirmed with a sustained close below 1470.
Also, do watch out for the 28 day cycle, that may be making a comeback. It pointed to a Mar 15 bottom and a good upleg should see price going higher for at least 14 day, around mid next week.
Again, look for price to trend in the direction of break of either 1470 or 1525, which is also 09 high. The break direction likely answer the question on current consolidation, is it a longer term consolidation since Nov or short term one since early. The former should be positive and latter negative.
Meanwhile, the mid and small caps are rebounding better, probably taking cue from stronger global equities. This too should be positive for FBMKLCI. Should price fails to break above 1525, it could either signal weakness in equities that yet to manifest in global markets or a country specific, perhaps Sarawak election?
