The KLCI has been “battered” by exit of foreign investor. The KLCI was at 1846 on 8 May 2018. It has dropped to 1665 by 28 June 2018. This is about 10% or 181 points drop. The question is where the next support line?
In technical analysis charting, support and resistance levels
are two important parameters to determine entry and exit points, coupled with
volume information. This method however, requires some users’ discretion
to “draw” the lines on the chart. This
could lead to ambiguity. One method to overcome this uncertainty is by using
histogram (Read more here).
Chart below shows the volume weighted histogram of weekly
closing price of KLCI from June 2009 till Jun 2018. Clearly from the
chart, 1630 is a strong support line. At the time this article was
written, the KLCI was trading around 1680.
The immediate strong support based on the histogram is 1670. There are several strong support lines
between 1630 to 1670, thus, the KLCI might be able to build its base around
this region.
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