Tech Talk Bursa Malaysia WW40

Technical indicators are lagging indicators and therefore I always look back at the previous week for recent market direction into the coming week. In this case I am using WW40 for this week's WW41. I hope this clears the air. For those who find it hard to follow I suggest reading through my previous posting on how I am using technical indicators as a trend seeker.

1. First Attempt on Tech Analysis Part 1
2. First Attempt on Tech Analysis Part 2 

Relative Strength Indicator (RSI)

Chart Setting: SMA 1, RSI (14, 20), Mar'10 to Sep'10

The mini correction did not materialised last week. Instead the index was crawling slowly back to the previous high. I read The Edge just today it seems that the foreign funds are back in Malaysia to ride the strength of the ringgit and to bet on the region's growth prospects. Foreign holdings are still at 21% so local institutional funds should be helping the index to go higher. Only now they start to buy? Funny why people sometimes place so high hopes on mutual funds. Here's my take on mutual funds.

Moving Average Convergence Divergence (MACD)

Chart Setting: EMA 12, EMA 26, MACD (26, 12, 9), Mar'10 to Sep'10

MACD losing its momentum continues on. It is still not near the centerline thus nothing interesting to take note.

Resistance and Support Level

Chart Setting: Mar'10 to Sep'10 (6 months)

New resistance now set at 1485-1505 points while support level is now at 1445-1425 points (previous lower high still unbroken).

In a Nutshell

MSCI Regional Valuation report states that Malaysia stands at the third highest valuation at 2.1 times in SEA losing to Indonesia (3.7 times) and Philippines (2.5 times). If foreign funds are buying into Malaysia it does seem correct that the index crawls slowly considering their small size of only 21%. What are the locals & retail players waiting for? I think is the ETP and Budget 2011 details in October. Again no shopping for me, only Parkson.

One Month Trend Chart *Tech indicators are lagging charts