The bearish momentum was strengthening last week but the strong rebound last Friday caused the bearish momentum to ease.
However, the market was still bearish as the FBM KLCI was not able to climb above the broken support level at 1,750 points.
Chart-wise, the FBM KLCI remained bearish below the short term 30-day moving average.
However, the index rebounded to the long-term 200-day moving average.
The Relative Strength Index and momentum oscillator indicators continued rebounding from their oversold levels and this indicated that the market was in a bargain-hunting mode. However, the moving average convergence divergence indicator was still below its moving average.
The bearish trend reversal from the double-top chart pattern formation was still valid as the index was below the broken neckline of the pattern at 1,750 points.
Henceforth, expect the FBM KLCI to test this level in the immediate term of a week. If the FBM KLCI fails to overcome this level, then expect it to trend lower towards 1,710 points. However, we may see a possible change in trend as the index can climb above 1,750 points and stay above this level.
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