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[KLCI] KLCI outlook - 1st December 2010

I'll continue to chart the market and discuss what I see for the market going forward in this new thread.

As I've been saying for a while, the key level of 1477 remains important.
We've touched 1477 area 3 times during this market correction and every time we have bounced and closed higher above this level, case in point:
1) Nov 24 we hit 1477 intraday low and bounced higher to close 1489.
2) Nov 29 we hit 1474 intraday low and bounced much higher to close 1496.
3) And more recently we once again touch 1478 yesterday just to finish strongly to recovered all losses by day's end.

This confirms my believe that we have significant support at 1477 area. We simply fail to go below that level despite some pretty serious geopolitical shock waves(Ireland/Europe and Korea situation).

I really like the recent action and I believe the consolidation is almost done. We should start to resume our uptrend VERY soon. Maybe as soon as today. This would be a good spot to enter the market or add to position as we have a well define stop out level, namely a solid close below 1477.

For those that follow this discussion, I'll add to this thread periodically with fresh updates if I see any significant developments.
We got our big bounce on Thursday away from the technical 'danger zone'. Friday was a consolidation day with just a small loss. We are now back above 50 sma line and the key psychological level of 1500.

Things seems to be following the year end - pre CNY script. So far so good I would say... I've nothing more to add :)
[21st December 2010 Update]
Just a quick update: Assuming that the low on 20th December of 1493 holds, we have just put in a higher low compared to 1474 few weeks ago. We seems to be putting in a symmetrical triangle formation over the past few weeks. It is very likely that the market will gather strength and break out of this formation to fresh new highs. The down sloping breakout line crosses around 1517 area. So, I am expecting some sort of attempt to breakout with good volume in the coming days.
[3rd January 2011 Update]
Well it took a while but I guess it is worth the wait. Market successfully broke above the Nov 10 highs. The breakout was accompanied by pretty good volume too. There is no clear upside target as we are now in uncharted territory(fresh new historical high). The MACD seems to have some room to move higher as historically it is not overbought until +20 for the KLCI. Things are looking very good for the near future. Any pullback will be a good opportunity to add on to your (hopefully) winning positions.
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