Last week high volatility in the local bourse were accompanied by increasing volume traded. Before the sharp fall of FBMKLCI volume traded has been decreasing despite the index has moved from a low of 1474 in late February to July 11’s high of 1597.
I could inferred that the uptrend since February was not collective i.e. selective. The hard drop since mid July was precipitated in early August by high volume indicated support buying by government fund.
Most analysts expected next week will be a volatile but I see it differently as on Friday with strong support FBMKLCI registered a gap up and forming a small gravestone doji. The index has been on “no touch” of 5d MA for the quite a few days and only on Friday it almost reversed the situation. The coming week I foresee the index to tag the 5d MA moving within a much narrow range than previously.
If the high volatility did happen again due to US and Europe economic factors, the index will test the recent low of 1472.
