Hello,
When we talk about the market, generally, we refer to the KLCI... however, do we really know what is KLCI, how is it calculated, what determine its movements and how the movements affect other counters? well, this may be very basic to most people, but i do think it is important to know the basics first so that we can understand the complicated.... :)
1) KLCI is calculated with this formula:
Current aggregate Market Capitalisation x 100 base Aggregate Market Capitalisation
2) wat are the counters tat is used to calculate? the answer is in
http://
www.bursamalaysia.co
m/website/bm/
market_information/
index_components.htm
lso, this also means tat, the KLCI does not represent the whole market, because not all counters are used to calculate it... some would prefer to use market breath... but then again, for TA readers, so far, i have not seen a chart tat uses market breadth.... wat to say use the beloved indicators on it? hehe.... tat is why, the closest you can get might still be the CI when you want to use TA... hehe... :P
and the CI is determined by the price and not the other way around... (questionable) that statement is theorically correct, but practical wise, it is different... i will explain more on this in the next article.... or else this one will be very long... hehe... :P
Regards
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