LAST close (Jan 24): 666.6 points, down 10.8 points from a week ago. Week’s high: 685.6 points; Week’s low: 666.5 points.
The Malaysia Derivatives Exchange (Mdex) KLCI futures prices dropped on long-liquidation pressure as bullish traders exited the market following a lack of bullish news and fizzled sentiment linked to the Valuecap funds.
Long weekend holidays for the Chinese Lunar New year and concerns of fresh bearish development from the Iraq crisis encouraged many who were long to take their profits.
The January 2003 futures fell from a week's high of 685.6 points to 666.5 points and finished the week moderately lower at 666.6 points, down 10.8 points from a week ago.
Total volume for the week declined to 4,642 contracts from 5,390 contracts previously. Open-interests as at Thursday’s close improved to 3,328 contracts from 2,385 contracts a week ago.
Chart-wise, the January 2003 index futures prices ended the week bearish and are expected to stay in sideways-to-lower trading this week.
Technically, the daily charts are indicating an immediate support at the 660.0-665.0 level. Breaching of these support levels in the week could pressure the January futures to decline and test its minor chart-support and 50% retracement level at the 655.0-650.0 point.
Chart-resistance for this week stands at the 670.0-675.0 level. The current bearish chart-outlook would turn positive if the market could penetrate and stay above these resistance levels in the coming week.
The daily and weekly technical indicators ended the week slightly bearish and suggest that the technical downward adjustment would extend into this week’s trading.
The daily Money Flow Index (MFI): The daily MFI dropped from its weekly-high of 78.53 points on Jan 22 and closed the week lower at 64.57 points. Analysis of the daily MFI indicates that the market is in a distribution phase. The weekly MFI closed slightly lower at 68.62 points and signalled that the near-term market could come under further liquidation selling.
The 3-day and 7-day exponentially smoothed moving-average price-line (ESA) ended its two-week old buy-signal and settled the week bearish. The 3-day and 7-day ESA-lines closed the week lower at 671.22 and 671.60 points respectively. Analysis of ESA-lines indicates that a bearish cycle has started and the downward momentum could be sustain this week.
Daily stochastics: The daily stochastics remained bearish for the immediate term market. The daily oscillator per cent K and D closed the week sharply lower at 17.53% and 43.85% respectively. Analysis of the daily stochastics shows that the market immediate direction is bearish. The weekly stochastics ended the week positive and with the per cent K and D at 98.99% and 75.87% respectively. This weekly indicator shows that the market’s main trend is still positive.
Daily moving-average convergence/divergence (MACD): The daily MACD (not shown in the chart) indicated a strong bearish convergence during Friday’s close. The daily MACD and trigger-line closed the week lower at 9.40 and minus 9.26 points respectively.
Analysis of the daily MACD indicates that the market may continue with its downward adjustments this week. The weekly MACD remained positive for the near-term market and finished the week constructive.
The weekly MACD and trigger-line lower at minus 12.90 and minus 17.07 points respectively.
Daily relative strength index (RSI): The daily RSI plunged from a weekly-high of 67.30 points on Jan 22 and settled the week sharply lower in the positive territory at 56.84 points. Analysis of the daily RSI shows that the index futures prices immediate underlying strength is bearish.
The weekly RSI ended Friday sharply lower in the negative territory at 49.86 points and indicated that the near-term market has turned bearish.
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