Wednesday, July 6, 2011

OSK Research: Near-term technical outlook firmly bullish

KUALA LUMPUR: OSK Research said the near-term technical outlook of the market remains firmly bullish.

It said on Wednesday, July 5 that two days ago, immediately after the market crossed the 1,577 historic high last Friday, the FBM KLCI created a 'Spinning Top' candlestick pattern - an indecisive signal - right above the previous historic peak.

'On the day it created this 'Spinning Top', the index had fluctuated within a 12-point trading range but eventually ended the session with a 0.6-point loss. Here we could see the bulls and bears battle it out in new historic territory,' it said.

OSK Research said this indecisive candlestick pattern may eventually turn out to be a bearish reversal pattern if the bears exerted greater selling pressure and may even end up having the upper hand.

'As preliminary analysis, we would say a break below the short-term uptrend line would confirm that the 'Spinning Top' is turning bearish.'' Anyhow, quite often we may observe such market action once an index or a stock creates a historic high,' it said.

The research house said that most importantly, the FBM KLCI had successfully defended the critical 1,474 pt-level and is currently trending higher along a new short-term uptrend line.

It said the near-term technical outlook of the market remains firmly bullish. Moreover, the index is still far from reaching overbought territory, as indicated by the daily RSI.

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