The trend of the KLCI remains intact, firm and bullish. It closed at 1378.47 up 7.89 points. Barring any unforeseen circumstances, it could move higher on some strong positive market news. Stocks 1 - 12 are overbought.
Stock Close Support Resistance
1. JADI 0.30 0.295 0.305
2. TMCLIFE 0.56 0.525 0.565
3. AIRASIA 1.71 1.65 1.72
4. AMMB 5.43 5.25 5.52
5. GENTING 8.93 8.72 9.01
6. ASIAPAC 0.10 0.09 0.10
7. PLUS 3.79 3.77 3.80
8. STEMLFE 0.445 0.435 0.45
9. TM 3.46 3.42 3.49
10. DIALOG 1.09 1.09 1.10
11. YTLPOWR 2.27 2.26 2.28
12. COMPUGT 0.07 0.065 0.07
13. GENM 2.99 2.82 3.11
14. IJM 5.00 4.99 5.01
15. UEMLAND 1.66 1.65 1.68
16. UNISEM 2.14 2.13 2.17
NOTE: In a Bullish market situation, an overbought stock could remain overbought for a longer period of time in a technical situation called "extended overbought situation". Similarly in a Bearish market situation an oversold stock could remain oversold for a longer period of time in a technical situation called "extended oversold situation".
This situation remain so untill the market operators feel either the stock is overpriced or too expensive and decide not to buy or the stock has fallen to a level that is attractive enough to buy and decides to buy. When this happens a reversal in the stock price trend takes place.
I hope this clears the confusion why an overbought or oversold stock does not have an immediate reversal in its price trend.
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Philips Futures office: B-2-6 Megan Avenue 11,
12, Jalan Yap Kwan Seng,
50450 Kuala Lumpur.
Date: Saturday 21 August 2010
Time: 9 -12.00 noon
Those interested in Understanding How Technical Analysis can enhance your trading should attend. It is FREE.
TAN
