04/09/13: Trapped in rectangle within 1700 to 1730

Date     : 4th Sept 2013 (Wed)
KLCI   : 1,717 (-8)

 

The KLCI was thrown down in the early morning. However, it was still able to fend above the support 1700 as it recoiled there gradually and consistently, leaving a relatively long lower tail candle. It's believed to be trapped in rectangle from 1700 to 1730. This projection is supported by these indications:

1. The little volume expansion (day to day) shows the buying at support is quite strong as well.
2. The alternate colour of the candles since it was resisted by Gap Resistance, 1730.

Critical Levels: Remained the same with previous view.
Resistance : 1730 - 1740 (Gap resistance)
Support     : 1700 (psychological level and long tail), 1655 (Long term up trendline)

Technical Indicators:
1. Stochastic : Extremely Critical (But bearish biased)

• Any turning down (as highlighted by red arrow in the chart) will indicate a very convincing sell signal that we have been waiting patiently since the technical rebound. 
• It's believed that the sell signal is going to happen on tomorrow or by friday!

2. Bollinger Band: No signal.

Conclusion:
1. No signal is triggered today yet. Continue to stay out is the only option.
2. Be prepared for a short term SHORT, target will be around 1655.
3. Basically, the view is still remaining the same since the technical rebound from 1660.
4. The situation becomes more critical as it progresses nearer to trading signal soon.
Confidence level: 95%