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Thursday, May 31, 2012

FBM KLCI - higher despite regional weakness


Stocks on Bursa Malaysia ended higher yesterday despite the weaker regional markets, helped by gains in banking and plantation stocks. The regional sentiment was affected by concern over Spain’s struggling banks and the country’s rising borrowing costs, with charts pointing to more gloom ahead, and indications that China might adopt a cautious approach in stimulating its economy also prompted investors to sell equities. The FBM KLCI closed 9.85 points or 0.63% higher at 1,575.17 after opening 2.89 points higher at 1,568.21. Gainers led losers by 378 to 331 while 318 counters were unchanged. Turnover rose to 920.86 million shares worth RM1.25 billion from 756.53 million shares worth RM984.41 million on Tuesday.

Taking cue from the strong performance of the Dow overnight, the FBM KLCI opened with an up gap of 2.89 points at 1,568.21 and slipped to the intra-day low of 1,564.60 on profit-taking activity, and moved sideways. The key index broke out from its sideways range in the afternoon and rallied to the intra-day high of 1,578.28 before pulling back to close off high. Chart-wise, the FBM KLCI formed a bullish white candlestick which continued its previous uptrend. With the up move yesterday, the key index managed to close the gap area at 1,571 to 1,575 but was not able to get through the resistance at 1,579 posted by the 50 and 60-day SMA. If the FBM KLCI is able to clear the resistance at 1,579, it might run up to the next target level of 1,591, otherwise, it may pull back to consolidate after five consecutive days of gains.

MACD was higher and so is the histogram, indicating a continued increase in the upward momentum. Nevertheless, as the MACD is still below the zero-line, the current up move may just be a technical rebound in a bigger downtrend. MACD will only turn bullish if the FBM KLCI is able to close above 1,580-point level. RSI (14) was higher at 55.1 from 50.4 previously, indicating the short term relative strength of the FBM KLCI had turned mildly bullish. Stochastic was higher at 60.5, indicating a continued improvement of the market strength and continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI has gradually turned mildly bullish, and there are still rooms for improvement.

With the strong upward move yesterday, the FBM KLCI has broken out of the downtrend channel as well as closing above the 30-day SMA, indicating the short term trend has reversed up. Nonetheless, the key index is still below the medium term 50 and 60-day SMAs, if only the FBM KLCI is able to close above this two medium term moving averages, the benchmark index would again turn bullish, and the long term trend still remained up. Immediate overhead resistance zone is at 1,578 to 1,591 while the downside support zone is at 1,565 to 1,550.

Overnight, the Dow fell -160.83 points or -1.28% to close at 12,419.86. Today, the FBM KLCI is likely to trade within a range of 1,553 to 1,592.

This week's expected range: 1517 – 1573
Today’s expected range: 1553 – 1592

Resistance: 1581, 1587, 1592
Support: 1553, 1559, 1567

Wednesday, May 30, 2012

FBM KLCI - higher on follow through buying


Stocks on Bursa Malaysia ended higher yesterday in line with the gains in most regional markets despite the Spanish bank worries, as hopes for new measures to boost China’s economy outweighed worries about the health of Spanish banks and their potentials to worsen Europe’s debt crisis, and there were increasing expectations that China would relax its monetary policy and also announce fiscal stimulus measures. The FBM KLCI closed 10.38 points, or 0.67%, higher at 1,565.32, after hovering between 1,552.34 and 1,566.13 throughout the day. Gainers led losers by 416 to 284 while 300 counters were unchanged. Turnover rose to 756.53 million shares, worth RM984.41 million from 735.85 million shares valued at RM897.64 million on Monday.

The FBM KLCI opened 0.94 point lower at 1,554.00 and slipped to the intra-day low of 1,552.34 within the first fifteen minutes of trading, and the key index rebounded to move higher for the rest of the day to touch the intra-day high of 1,566.13 before pulling back to close off high. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates buyers overwhelmed sellers for the day, and the buying momentum may send the FBM KLCI to a higher level today. Immediate overhead resistance zone is at 1,566 to 1,591 with the gap area at 1,571 to 1,575 acting as a strong barrier to any up move.

MACD continued to climb higher and has just made a golden cross over the signal-line, flashing a buy signal. Nevertheless as the golden-cross occurred below the zero-line it could be just part of a technical rebound. RSI (14) was higher at 50.4, indicating the short term relative strength of the FBM KLCI has just turned neutral from mildly bearish previously. Stochastic was higher at 47.6, indicating an improvement in the market strength and a continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI is gradually turning bullish in the short term, and the upward momentum may carry the index higher.

The short term trend of the FBM KLCI has turned up as the key index is now closing above the 5, 10 and 20-day SMA but is still below the 30, 50 and 60-day SMA. The medium term trend is still down while the long term trend remained up. Currently the FBM KLCI is still trapped within the downtrend channel, and strong resistance is expected at 1,571 to 1,579 zone post by the 30, 50 and 60-day SMAs. If only the FBM KLCI is able to close above this resistance zone and above the 1,591-point level, then only the FBM KLCI is considered to have re-gained its bullish uptrend.

Overnight, the Dow gained +138.12 points or +1.11% to close at 12,592.95. Today, the FBM KLCI is likely to trade within a range of 1,536 to 1,580

This week's expected range: 1517 – 1573
Today’s expected range: 1536 – 1580

Resistance: 1565, 1572, 1580
Support: 1536, 1544, 1550

Stocks to watch: BIMB, MKH, GTRONIC

Tuesday, May 29, 2012

FBM KLCI - higher in line with regional market


Share prices on Bursa Malaysia ended higher yesterday in tandem with the positive sentiment in Asian stock markets, as opinion polls in Greece showed the pro-bailout conservative party held the lead in next month’s national elections, and was largely viewed as critical to keeping Greece in the Eurozone. The FBM KLCI closed 3.82 points or 0.25% higher at 1,554.94 after opening 5.7 points lower at 1,545.42. Gainers led losers by 412 to 276 while 322 counters were unchanged. Turnover decreased to 735.85 million shares, worth RM897.64 million, from 875.54 million shares, valued at RM1.18 million, transacted on Friday.

Taking cue from the weak performance of Wall Street last Friday, the FBM KLCI opened with a down gap of 5.7 points lower at 1,545.42 and slipped to the intra-day low of 1,544.63 and stabilized, it then rebounded and moved higher for the rest of the day to hit the intra-day high of 1,556.69 before pulling back to close off high. Chart-wise, the FBM KLCI formed a bullish engulfing candlestick which showed the bears were initially in controlled but later the bulls took over and pushed the key index to close near the high of the day. With such strong price action yesterday, the FBM KLCI is likely to continue its upward momentum to climb higher today. Immediate overhead resistance is at 1,556 to 1,566 while the immediate downside support zone is at 1,544 to 1,540.

MACD continued to climb higher and its histogram was shorter upward, indicating continued improvement in the key index’s momentum. Nonetheless, as the MACD is still below the zero-line and the signal-line, current up move is still being viewed as a technical rebound in a bear trend. RSI (14) was higher at 44.8 from 42.6 previously, indicating a continued improvement in the short term relative strength. Stochastic oscillator also continued to climb higher to 38.5, indicating a continuation in the short term up cycle and improvement of market strength. Readings from the indicators showed that the FBM KLCI is gradually gaining its upward momentum. However, the overall picture is still bearish bias for the time being.

The short term trend of the FBM KLCI has turned up as the key index is now closing above the 5 and 10-day SMA, and it might continues its current momentum to challenge the higher resistance level at 1,566, and a close above the 1,566-point level would see the FBM KLCI moving into the bullish zone. The medium term trend is still down while the long term trend remained up, as the key index continued to close above the long term 120-day SMA for the last three days. As the school holiday starts, the overall market is expected to remain quiet for the coming two weeks, and this is reflected by the very low turnover for the last few sessions.

US market was closed for the Memorial Day holiday yesterday. Today, the FBM KLCI is likely to trade within a range of 1,535 to 1,569.

This week's expected range: 1517 – 1573
Today’s expected range: 1535 – 1569

Resistance: 1560, 1565, 1569
Support: 1535, 1540, 1547

Stocks to watch: HIBISCS, MUDAJYA, SUNWAY,  WCT, MBSB

Monday, May 28, 2012

FBM KLCI - likely to be range-bound with a downward bias



Stocks on Bursa Malaysia ended higher last Friday despite weaker sentiments in the Asian stock markets, as local investors may be reacting to the generally positive quarter financial reports of companies recently as well as announcements of contracts secured. The FBM KLCI closed 2.87 points, or 0.2% higher, at 1,551.12, lifted up by gains in most heavyweight counters, and week-on-week, it gained 18.66 points from previous Friday’s close of 1,532.46. Gainers led losers by 432 to 266, while 307 counters were unchanged. Turnover was higher at 875.54 million shares valued at RM1.182 billion compared with 817.48 million shares worth RM1.311 billion on Thursday. Weekly turnover stood at 4.346 billion shares worth RM6.142bil versus 5.768 billion shares valued at RM8.262 billion a week ago.

The FBM KLCI bucked the regional trend last week as the benchmark index rebounded over the week. The FBM KLCI opened 0.71 of a point higher at 1,533.17 but slipped to the intra-week low of 1,531.95 before rebounding to close 6.45 points higher at 1,538.91 on last Monday. Sentiment was cautiously optimistic on Tuesday with the FBM KLCI closing 7.93 points higher at 1,546.44. The local market staged a pulled back on Wednesday after rising for two days with the FBM KLCI retreating 7.13 points to 1,539.71. The benchmark index rebounded on Thursday to closed at its intra-day high of 1,548.25 with a gain of 8.54 points, and the upward move continued into Friday to hit the intra-week high of 1,552.48 before closing the week slightly off high at 1,551.12.

On the weekly chart, the FBM KLCI formed a bullish white candlestick in Harami position which reflected the rebound over the week and indicates a possible bottom reversal. However, as the key index could not close above the mid range of the previous week’s candlestick of 1,555.61, the rebound is considered a weak technical rebound. Hence, the FBM KLCI may continue to remain sideways range-bound this coming week. On the daily chart, the FBM KLCI formed a small white candlestick which continued its rebound on Thursday. As the body of the candlestick is relatively small, it showed a lack of enthusiasm and the market may consolidate itself. Immediate overhead resistance zone is at 1,552 to 1566 while the immediate downside support zone is at 1,547 to 1,526.

Weekly MACD and its histogram continued to slip lower, indicating a continued loss in the weekly momentum. On the contrary, daily MACD and its histogram continued to rise, indicating an improvement in the daily momentum to the upside. Nonetheless, as the daily MACD line is still below the daily signal-line, the current rise in the daily MACD is viewed as just part of a technical rebound. Weekly RSI (14) hooked upward to 50.2 from 46.1 previously, indicating the weekly relative strength is neutral. Daily RSI (14) continued to rise to 42.6 from 40.9, indicating an improvement in the daily short term relative strength of the FBM KLCI, nevertheless, it is still mildly bearish. Weekly Stochastic continued to plunge lower to 31.1 from 51.9, indicating a rapid loss in the weekly strength and continuation of the weekly down cycle. On the flip side, the daily Stochastic showed a continued improvement in the stochastic value to 30.7 from 28.4. Readings from the weekly indicators shows a bearish outlook while the daily indicators showed signs of positive improvement, nevertheless, the daily improvement in the market momentum may just be a technical rebound in a bear market, and the FBM KLCI may continue to consolidate.

The overall trend of the FBM KLCI remained down as the key index is still below most of the short and medium term moving averages and remained within the downtrend channel. In order to reverse the current downtrend, the FBM KLCI must break above the upper channel line and the 50 and 60-day SMA which is currently at 1,580-poinr level, a confirm trend change requires the FBM KLCI to at least close above the 1,590-point level. On the flip side, the critical lower support zone lies at 1,526 to 1,510, if the key index closes below the 1,510-point level, then expect to see a downside target of 1,495 follow by 1,460.

Last Friday, the Dow fell -74.92 points or -0.60% to close at 12,454.83. This week, the FBM KLCI is likely to trade within a range of 1,517 to 1,573, and for today, it is likely to trade within a range of 1,543 to 1,558.

This week's expected range: 1517 – 1573
Today’s expected range: 1543 – 1558

Resistance: 1554, 1556, 1558
Support: 1543, 1545, 1548

Friday, May 25, 2012

FBM KLCI - rebounded to close higher


Stocks on Bursa Malaysia ended higher yesterday, driven by gains in most heavyweight counters. However, growing concerns about Greece exiting the Eurozone capped gains, and equities remained vulnerable to more sell-offs. The FBM KLCI closed at its intra-day high of 1,548.25, 8.54 points or 0.55% higher after hitting the intra-day low of 1,540.49. Gainers led losers by 386 to 274 while 344 counters were unchanged. Turnover decreased to 817.46 million shares worth RM1.31 billion from the 960.848 million shares valued at RM1.288 billion on Wednesday.

The FBM KLCI opened 0.87 of a point higher at 1,540.58 and slipped marginally lower to the intra-day low of 1,540.49, it then rebounded and moved higher for the rest of the day with intermittent mild profit-taking before ending at the highest point of the day. Chart-wise, the FBM KLCI formed a bullish white Marubozu candlestick which indicates buyers were in control for the day, and the bullish momentum may send the key index higher today. Immediate overhead resistance zone is envisaged at 1,552 to 1,559, while the immediate downside support zone is at 1,540 to 1,535.

MACD has hooked up for the first time after two weeks of continuous fall, and its histogram also turned shorter upward for the fourth consecutive bars, indicating a possible changed in the momentum from down to up. RSI (14) was higher at 40.9, indicating the short term relative strength of the FBM KLCI has improved from bearish to moderately bearish. Stochastic was higher at 28.4, indicating a continued improvement of the market strength and also a continuation of the up cycle. Readings from the indicators showed that the FBM KLCI is currently undergoing a rebound and the technical outlook has improved from bearish to moderately bearish. Nevertheless, this could be just a technical rebound from a bigger picture.

The overall trend of the FBM KLCI remained down. However, it has now closed above the very short term 5-day SMA and the long term 120-day SMA, and it may continues its rebound to move higher. An important resistance level that the key index must break now is the 1,550-point psychological resistance level, which coincides with the 10-day SMA, and a break above this psychological level would also mean the key index would cross above the middle trend line of the downtrend channel, and is likely to see the key index moving higher to test the upper boundary of the downtrend channel. Unless and until the FBM KLCI close above the upper downtrend line which is currently at 1,575, the trend is still considered down.

Overnight, the Dow gained +33.60 points or +0.27% to close at 12,529.75. Today, the FBM KLCI is likely to trade within a range of 1,535 to 1,556.

This week's expected range: 1489 – 1606
Today’s expected range: 1535 – 1556

Resistance: 1551, 1554, 1556
Support: 1535, 1537, 1543

Stocks to watch: MPHB, CSL, MBL, STEMLFE

Thursday, May 24, 2012

FBM KLCI - pullback on profit-taking


Stocks on Bursa Malaysia ended softer yesterday after a two-day rally, tracking the easier overnight performance on Wall Street and other regional markets. The FBM KLCI closed 7.13 points or 0.46% lower at 1,539.71, weighed down by losses in blue chips and heavyweights, after hovering between 1,535.11 and 1,548.11 throughout the day. Losers led gainers by 437 to 243 while 315 counters were unchanged. Turnover appreciated to 960.848 million shares worth RM1.288 billion from the 911.80 million shares valued at RM1.280 billion transacted on Tuesday.

The FBM KLCI opened 0.28 of a point higher at 1,547.12 and surged to the intra-day high of 1,548.65 within the first five minutes of trading, and heavy profit-taking that appeared pressed the benchmark index to the intra-day low of 1,535.11. The FBM KLCI then rebounded and moved sideways till closing. Chart-wise, the FBM KLCI formed a bearish engulfing candlestick pattern which indicates heavy selling pressure due to profit-taking after two days of rally. The key index is hence likely to continue its correction and consolidation today with an immediate support zone at 1,531 to 1,526, while the overhead resistance zone is at 1,548 to 1,558.

MACD slip lower, but its histogram did not follow suit, indicating a slow down in the bearish downward momentum or consolidation. RSI (14) hooked downward to 35.8 from 38.4 a day ago, reflecting the pullback, and the short term relative strength is still in the bearish zone. Stochastic oscillator was higher at 23.6 from 19.9 previously, indicating an improvement in the market strength and a continuation in the short term up cycle. Readings from the indicators showed that the FBM KLCI is currently still in a bearish and weak condition and the consolidation process may continue with a downward bias.

The trend of the FBM KLCI remained down as the key index continue to stay below the short, medium and long term moving averages, and also within the lower part of the downtrend channel. Judging from the overall technical picture, the FBM KLCI is likely to stay sideways range-bound with a downward bias. The total volume which continues to stay below the one billion shares mark indicates a lack of interest, and the consolidation may prolong.

Overnight, the Dow fell a marginal -6.66 points or -0.05% to close at 12,496.15. Today, the FBM KLCI is likely to trade within a range of 1,520 to 1,563.

This week's expected range: 1489 – 1606
Today’s expected range: 1520 – 1563

Resistance: 1548, 1555, 1563
Support: 1520, 1527, 1533

Wednesday, May 23, 2012

FBM KLCI - higher on follow through buying


Stocks on Bursa Malaysia ended firmer yesterday in tandem with the overnight technical rebound on Wall Street. The local market was also benefiting from bargain-hunting activities but sentiments remained cautiously optimistic. The FBM KLCI closed 7.93 points or 0.515% higher at 1,546.44 after hovering between 1,539.74 and 1,546.84 throughout the day. Gainers led losers by 479 to 245 while 310 counters were unchanged. Turnover appreciated to 911.80 million shares worth RM1.280 billion from 780.02 million shares valued at RM1.07 billion transacted on Monday.

Taking cue from the rebound on Wall Street overnight, the FBM KLCI opened 0.83 point higher at 1,539.74 and surged to the morning session high of 1,546.37 before going into an intra-day consolidation. Bargain-hunting activities in the last hour helped pushed the key index to close at the highest point of the day. Chart-wise, the FBM KLCI formed a bullish white Marubozu candlestick which served to confirm the bottom reversal signal issued by the bullish Harami candlestick pattern formed on Monday. Continuing from the steady upward momentum yesterday, the FBM KLCI is likely to climb higher today but is likely to face heavy resistance or profit-taking at the 1,552 to 1,559 zone.

MACD was marginally lower but is tapering off, while its histogram was shorter upward, indicating a reduction in the bearish downward momentum. RSI (14) was higher at 38.4 from 33.4 previously, indicating an improvement of the short term relative strength. Nevertheless, it is still bearish but is approaching the mildly bearish zone. Stochastic continued to climb higher to 19.9 after crossing over the slow stochastic line on Monday, indicating an improvement in the market strength and a possible short term up cycle is beginning. Readings from the indicators showed that the FBM KLCI is undergoing a technical rebound after a round of sell down, and overall the key index is still bearish at the moment.

The FBM KLCI has just made a crossover above the very short term 5-day SMA and was also back above the long term 120-day SMA. Nonetheless, the overall trend of the FBM KLCI still remained down as it is still below the middle trend line of the downtrend channel. In order for the FBM KLCI to reverse the current downtrend, it must at least move above the 1,590-point level. With the overall volume staying below the one billion shares mark, the broad market is likely to remain quiet with some rotational play on the second and third liners.

Overnight, the Dow fell a marginal -1.67 points or -0.01% to close at 12,502.81. Today, the FBM KLCI is likely to trade within a range of 1,535 to 1,554.

This week's expected range: 1489 – 1606
Today’s expected range: 1535 – 1554

Resistance: 1550, 1552, 1554
Support: 1535, 1537, 1542

Stocks to watch: SKPETRO, WINGTM, PERMAJU, MBL

Tuesday, May 22, 2012

FBM KLCI - higher in tandem with regional rebound


Stocks on Bursa Malaysia ended firmer yesterday tracking the steadier trend on regional markets. The market, however, remained cautious due to uncertainties over the Eurozone situation. The FBM KLCI closed 6.45 points or 0.42% higher at 1,538.91, after hovering between 1,531.95 and 1,540.29 throughout the day. Gainers led losers by 385 to 306 while 301 counters were flat. Turnover fell to 780.02 million shares, valued at RM1.07 billion, from 1.06 billion shares, worth RM1.5 billion, recorded last Friday.

The FBM KLCI opened 0.71 of a point higher at 1,533.17 but slipped to the intra-day low of 1,531.95 within the first five minutes of trading. The key index then rebounded and moved into the positive territory and gradually moved higher for the rest of the day. It touched the intra-day high of 1,540.29 before pulling back on mild profit-taking. Chart-wise, the FBM KLCI formed a bullish white candlestick in Harami position, which is a bottom reversal pattern, and a confirmation is required to confirm the reversal. Based on the price action yesterday, the FBM KLCI is likely to rebound further today. Immediate overhead resistance zone is at 1,544 to 1,552, while the downside support zone is at 1,531 to 1,526.

MACD continued to slide lower, however, its histogram was shorter upward, indicating a slow down in the bearish downward momentum. RSI (14) hooked upward to 33.4 from 29.1 previously, indicating the short term relative strength is still in the bearish state. Stochastic oscillator has turned upward to 14.8 and has crossed above the slow stochastic line, giving out an initial buy signal. Anyway, the buy signal required further confirmation. Readings from the indicators show that the FBM KLCI is staging a mild rebound after falling into the short term oversold zone. Nevertheless, this could just well be just a dead-cat-bounce in a bearish downtrend and more data is required to confirm a trend change.

The trend of the FBM KLCI remained down, as the FBM KLCI continued to stay below the short, medium and long term moving averages. Nonetheless, it is still considered up from a much longer term perspective as it is above the cluster of a much longer term SMA which forms the critical support zone. The up move yesterday is viewed as a technical rebound as the key index hit the lower support line of the downtrend channel. In order for the FBM KLCI to reverse its current downtrend it must move above the 1,591-point level.

Overnight, the Dow rose +135.10 points or +1.09% to close at 12,504.48. Today, the FBM KLCI is likely to trade within a range of 1,525 to 1,549.

This week's expected range: 1489 – 1606
Today’s expected range: 1525 – 1549

Resistance: 1543, 1546, 1549
Support: 1525, 1528, 1533

Stocks to watch: CRESBLD, PERMAJU, MBL, MKH, SKPETRO

Monday, May 21, 2012

FBM KLCI - bearish outlook



Stocks on Bursa Malaysia ended lower last Friday on renewed selling pressure in heavyweights and big capitalised stocks. The downtrend was due to the overnight slide on Wall Street and on European markets as US data disappointed. The cut in credit ratings of Spanish banks also spooked investors. The FBM KLCI closed 11.75 points or 0.76% lower at 1,532.46, after hovering between 1,526.6 and 1,539.24 throughout the day. Week-on-week, the key index loss 51.86 points or 3.27% from previous Friday’s close of 1,584.32. Market breadth was negative with 702 losers and 130 gainers while 256 counters were unchanged. Turnover declined to 1.06 billion shares valued at RM1.5 billion from 1.27 billion shares worth RM1.93 billion recorded on Thursday, and total weekly volume fell to 5.768 billion shares valued at RM8.262 billion from 6.033 billion shares worth RM6.45 billion.

The local bourse was basically in a bearish mood the whole of last week. The FBM KLCI opened the week 2.26 points lower at 1,582.06 and slipped lower to close 9.24 points at 1,575.08. The key index was 14.01 points lower at 1,561.07 on Tuesday in line with weaker performances in key regional markets. The FBM KLCI opened on Wednesday with a down gap of 2.82 points at 1,558.25 and slipped 25.03 points or 1.6% lower to 1,536.04. Thursday saw a technical rebound with the FBM KLCI gaining 8.17 points higher at 1,544.21. However, the FBM KLCI continued to slide lower on Friday, hitting the intra-week low of 1,526.6 before rebounding to close the week at 1,532.46.

On the weekly chart, the FBM KLCI formed a bearish long black candlestick which indicates sellers were dominant throughout the week, and the key index is likely to fall further in the coming week. On the daily chart, the FBM KLCI formed a black hammer-like candlestick which indicates sellers were dominant with mild bargain-hunting. With the bearish outlook on both the weekly and daily candlestick chart, the FBM KLCI is likely to slip further southward with a possible down side target of 1,495 to 1,491, and the immediate critical downside support zone is envisaged at 1, 520 to 1,510 provided by the cluster of long term moving averages.

Weekly MACD continued to slide lower after making the dead-cross, and the daily MACD also slipped lower, indicating an acceleration of the bearish momentum. Weekly RSI (14) plunged lower to 46.1 from 58.7, indicating the weekly relative strength has turned bearish. Daily RSI (14) pulled back to 29.1 after rebounding to 32.7, indicating the daily relative strength is back to the very bearish or short term oversold zone. As this is a re-visit of the oversold zone, the key index might fall even further as the bearish momentum pickup. Weekly stochastic continued to slide lower to 51.9 from 68.2, indicating a continuation of the weekly down cycle, and the daily stochastic has hooked up slightly reflecting the rebound after hitting the intra-week low on the FBM KLCI chart. In short, the FBM KLCI is looking very bearish from both the weekly and daily indicators. Nonetheless, as the oscillators have entered the short term oversold zone, a rebound might be expected ahead.

The trend of the FBM KLCI has turned bearish as the key index is now staying below the short, medium and the long term 120-day SMA. However, the benchmark index is still above the longer term 200, 240 and 360-day SMA, which formed a support zone at the 1,510 to 1,520 level. Some strong support is expected when the FBM KLCI approaches this support zone. However, a close below this critical support zone would spell the end of the bull trend which started in April 2009. The best strategy now is to sell on rebound until a clear trend reversal is observed.

Last Friday, the Dow fell -73.11 points or -0.59% to close at 12,369.38. This week, the FBM KLCI is likely to trade within a range of 1,489 to 1,606, and for today, it is likely to trade within a range of 1,513 to 1,552

This week's expected range: 1489 – 1606
Today’s expected range: 1513 – 1552

Resistance: 1539, 1545, 1552
Support: 1513, 1520, 1526

Friday, May 18, 2012

FBM KLCI - higher on technical rebound


Stocks on Bursa Malaysia posted modest gains at close yesterday, ending a four-day losing streak amid lingering worries over Greece. Positive sentiment overshadowed the concern over Europe’s debt crisis including better-than-expected housing starts data in US and news that Japan’s economy rebounded in the first quarter. The FBM KLCI finished 8.17 points or 0.53% higher at 1,544.21 after moving between 1,536.24 and 1,552.25 throughout the day. Market breadth was positive with 472 gainers and 279 losers while 327 counters were unchanged. Turnover declined to 1.27 billion shares worth RM1.93 billion from 1.33 billion shares valued at RM2.06 billion on Wednesday.

The FBM KLCI opened 0.2 point higher at 1,536.24, the low of the day, and moved higher to hit the intra-day high of 1,552.25 right after market opened in the afternoon session, making a gain of 16.21 points at its best. However, profit-taking activity which emerged pressed the key index to give back half of its gains to close off high. Chart-wise, the FBM KLCI formed a white inverted hammer-like candlestick which indicates the bulls have decided to fight back after four consecutive days of losses. However, the bears were still around as can be seen from the pullback. The FBM KLCI may try to consolidate around this level for the time being. Nevertheless, if the selling pressures continue and the key index breaks below the 1,536-point level, it is likely to slide lower to the 1,520 to 1,510 critical support zone.

MACD continued to slide lower and so is the histogram, indicating a continuation in the bearish southward momentum. RSI (14) hooked upward to 32.7 from 26.8, reflecting the rebound in the key index, and is still in the bearish state. Stochastic was lower at 8.5, indicating a continuation of the down cycle and the key index is very weak. Readings from the indicators showed that the FBM KLCI is currently in a very weak and bearish state, the rebound seen yesterday could merely be just a temporary relief as the overall technical picture is still bearish.

The short and medium term trend of the FBM KLCI remained down, while the longer term trend is at test now as the key index has pierced through the 120-day SMA and rebounded, and is sitting right on it now. If the selling pressures persist, then there is a high likelihood that the FBM KLCI may plunge lower to the critical support zone provided by the long term moving average clusters at 1,520 to 1,510. And a break below this support zone would spell the beginning of a bear phase, and the FBM KLCI could be looking at downside targets of 1,495, 1,460 and 1,424.

Overnight, the Dow fell -156.06 points or -1.24% to close at 12,442.49. Today, the FBM KLCI is likely to trade within a range of 1,520 to 1,569
 
This week's expected range: 1556 – 1610
Today’s expected range: 1520 – 1569

Resistance: 1553, 1561, 1569
Support: 1520, 1528, 1536

Thursday, May 17, 2012

FBM KLCI - the bears continue to rule


Stocks on Bursa Malaysia ended lower yesterday, for the fourth consecutive day, due to weak sentiment amid persistent worries over the global economy. Worries over the European debt crisis particularly that of Greece continued to weigh on market sentiment. The prolonged political crisis had pushed the country to the verge of bankruptcy and Greece could exit from the Euro-zone. The FBM KLCI ended 25.03 points or 1.6% lower at 1,536.04 – the lowest since end-February. Losers outpaced gainers by 822 to 97 while 215 counters were unchanged. Turnover rose to 1.33 billion shares, valued at RM2.06 billion, from 1.12 billion shares, worth RM1.64 billion, recorded on Tuesday.

The FBM KLCI opened with a down gap of 2.82 points at 1,558.25, the intra-day high, and slipped lower under heavy selling pressure with weak intermittent rebound to touch the intra-day low of 1,535.05 before settling the day at 1,536.04. Chart-wise, the FBM KLCI formed a bearish long black candlestick which indicates the sellers were selling out in great fear, and the key index might continue to fall further today with an immediate downside support at 1,530 follow by 1,520.

MACD continued to slip lower and so is the histogram, indicating acceleration in the bearish downward momentum. RSI (14) plunged lower to 26.8 from 35.6 previously, indicating the benchmark index is currently in a very bearish state, and has just entered the short term oversold zone. Stochastic continued sliding lower to 10.3, indicating very weak short term market strength and has entered the oversold zone. Readings from the indicators showed that the FBM KLCI is currently bearish and weak. However, as the indicators already showed a short term oversold condition, some technical rebound might be expected ahead.

The short and medium term trend of the FBM KLCI remained down and bearish, and the long term trend has also just turned bearish as the benchmark index has just pierced through and closed below the 120-day SMA, with this, the FBM KLCI has entered a bear phase. However, the last defense of the long term trend is at the 1,510 to 1,520 zone represented by the cluster of long term moving averages, and a close below the 1,510-point level would officially mean the FBM KLCI become long term bearish.

Overnight, the Dow fell -33.45 points or -0.26% to close at 12,598.55. Today, the FBM KLCI is likely to trade within a range of 1,504 to 1,582.
 
This week's expected range: 1556 – 1610
Today’s expected range: 1504 – 1582

Resistance: 1552, 1567, 1582
Support: 1504, 1519, 1527

Wednesday, May 16, 2012

FBM KLCI - downtrend continued


Stocks on Bursa Malaysia extended their downtrend for the third consecutive day yesterday in line with weaker performances in key regional markets, and the better local and regional sentiments were eroded by the overnight fall on Wall Street on Monday. The FBM KLCI was 14.01 points or 0.9% lower at 1,561.07, after opening 4.33 points lower at 1,570.75. Losers led gainers by 658 to 176 while 250 counters were unchanged. Turnover rose to 1.12 billion shares worth RM1.64 billion from 977.743 million shares valued at RM1.12 billion on Monday.

Taking cue from the weak performance of Wall Street overnight, the FBM KLCI opened with a down gap of 4.33 points at 1,570.75 and slid lower to the intra-day low of 1,559.01 within the first hour of trading. The key index then staged a weak rebound and hovers in a narrow range near the low. Chart-wise, the FBM KLCI formed a bearish black candlestick which indicates sellers were in control for the day, and the key index is likely to continue its downtrend until a bottom reversal signal is seen. Immediate downside target is the 1,550-point psychological support level with a possible lower target of 1,538-point, the 23.6% Fibonacci retracement level.

MACD continued to slide lower and so is the histogram, indicating an increase in the bearish momentum. RSI (14) slid lower to 35.6 from 42.9 previously, indicating the short term relative strength of the FBM KLCI has turned bearish. Stochastic was lower at 34.4 from 59.2, indicating an acceleration of the bearish momentum and a continuation of the down cycle. Readings from the indicators showed that the FBM KLCI is currently in a bearish state, and the bearishness is likely to remain until there is strong reversal seen.

The short term trend of the FBM KLCI remained down as the key index is now closing below the lower supporting trend line of the downtrend channel, as well as below the short and medium term moving averages. With bearishness looming in the global market, the FBM KLCI is likely to follow suit, and a critical support level is the 1,538-point level where the 120-day SMA is located now and a close of the key index below this level will also mean the beginning of the long term bear trend. The best strategy to adopt now is to sell on rebound.

Overnight, the Dow fell -63.35 points or -0.50% to close at 12,632.00. Today, the FBM KLCI is likely to trade within a range of 1,544 to 1,584
 
This week's expected range: 1556 – 1610
Today’s expected range: 1544 – 1584

Resistance: 1569, 1576, 1584
Support: 1544, 1551, 1556

Tuesday, May 15, 2012

FBM KLCI - bearish outlook


Stocks on Bursa Malaysia closed lower yesterday in a broad-based sell-off amid uncertainty in the short-term market outlook. The local market saw renewed selling pressure after a weekend of political uncertainty in Europe as an unresolved political stalemate in forming a government in Greece weighs on investor sentiment. The FBM KLCI was 9.24 points or 0.6% lower at 1,575.08. Decliners led advancers by 694 to 158 while 223 counters were unchanged. Turnover declined to 977.909 million shares valued at RM1.12 billion from the 1.114 billion shares worth RM1.21 billion last Friday.

The FBM KLCI opened 2.26 points lower at 1,582.06 and rebounded to hit the intra-day high of 1,584.63 within the first five minutes of trading, and the key index slid lower on profit-taking activity and moved range-bound before late afternoon selling pressure which pushed the key index to the intra-day low of 1,574.67. The FBM KLCI finally settled slightly off low. Chart-wise, the FBM KLCI formed a bearish long black candlestick which indicates the bears were in control for the day, and the downward momentum is likely to send the key index lower today. Immediate downside support is at 1,566-point level, if the FBM KLCI breached this support level, then it is likely to fall further downward to the 1,538-point level, the 23.6% Fibonacci retracement level measuring from the September 26th 2011 pivot low to the 1,609.33 pivot high.

MACD has hooked southward together with its histogram, indicating an acceleration in the bearish momentum. RSI (14) slid lower to 42.9 from 49.1 previously, indicating an increase in the bearish relative strength. Stochastic slid downward to 59.2 and has crossed below its slow stochastic line, indicating an end to the recent short term up cycle and the beginning of another bearish down cycle. Readings from the indicators showed that the bearish momentum of the FBM KLCI is picking up and the key index is likely to fall further.

The short term trend of the FBM KLCI remained down as it continued to stay within the downtrend channel and below the short term moving averages. The key index has also closed below the medium term 50 and 60-day SMA, indicating the medium term outlook is also bearish. However, the long term trend is still up, but is likely to be challenged soon. With the total volume falling below the one billion shares mark, the market is likely to stay quiet amid a bearish outlook.

Overnight, the Dow fell -125.25 points or -0.98% to close at 12,695.35. Today, the FBM KLCI is likely to trade within a range of 1,561 to 1,595.
 
This week's expected range: 1556 – 1610
Today’s expected range: 1561 – 1595

Resistance: 1582, 1588, 1595
Support: 1561, 1568, 1571

Monday, May 14, 2012

FBM KLCI - likely to remain range-bound with a bearish bias



Stocks on Bursa Malaysia ended broadly lower last Friday in line with bearish regional markets as investors shied away from riskier markets due to external woes as global markets remained volatile amid ongoing uncertainties in Europe and a mild recovery in the US. Bursa Malaysia is likely to experience more range-bound consolidation within 1,550-1,610 in the short term, ahead of the run-up to the 13th general election. The FBM KLCI was 3.74 points or 0.24% lower at 1,584.32, pressured mainly by losses in selected key heavyweights. On a Friday-to-Friday basis, the benchmark declined 6.72 points from previous Friday’s 1,591.04. Losers led gainers by 476 to 234, while 332 counters were unchanged. Turnover was lower at 1.114 billion shares valued at RM1.206 billion compared with 1.4 billion shares worth RM1.399 on Thursday. Total weekly volume rose to 6.033 billion shares worth RM6.45 billion from 4.904 billion shares worth RM5.62 billion.

The FBM KLCI was basically in a range-bound consolidation mode the whole of last week where it opened with a down gap of 5.87 points on Monday and slipped to the intra-day low of 1,579.74 before rebounding to close at 1,584.87. Tuesday saw a continuation in rebound with the FBM KLCI closing 5.73 points higher at 1,590.60. On Wednesday, the key index staged a pulled back to close 5.7 points lower at 1,584.90 while on Thursday, it rebounded 3.16 points to 1,588.06. The benchmark index came under mild selling pressure on Friday where it fell to the intra-week low of 1,572.95, losing 15.11 points at its worst due to a possible mistake done in KLK, but the FBM KLCI recovered quickly to close just 3.74 points lower.

On the weekly chart, the FBM KLCI formed a Doji candlestick in Harami position which indicates indecision of market direction and uncertainties ahead. The FBM KLCI has also closed below the 5 and 10-week SMA, and hence, the key index is likely to remain range-bound with a downward bias in the coming week. Immediate critical support is pegged at the 1,566-point level, the pivot low formed two weeks ago, and a breach of this support level is likely to see the FBM KLCI sliding lower to the 1,550-point psychological support level. On the daily chart, the FBM KLCI formed a bearish black hammer candlestick which indicates selling pressure on the key index but with buying support, and it is likely to stay range-bound today.

Weekly MACD continued to slide lower and had just made a dead-cross over the weekly signal-line, flashing a bearish sell signal on the FBM KLCI weekly chart. Daily MACD was marginally lower and continued to stay below the daily signal-line as well as the zero-line, indicating a bearish condition for the FBM KLCI. Weekly RSI (14) hooked downward to 58.7 from 60.8 previously, indicating the weekly relative strength of the FBM KLCI has turned mildly bullish from bullish. Daily RSI (14) was lower at 49.1 from 51.8 the previous day, indicating the daily relative strength has turned mildly bearish. Weekly Stochastic continued to slide lower to 68.2, indicating a continuation of the weekly down cycle and continued loss in the index’s momentum, and the daily stochastic also hooked slightly downward but is still above its slow stochastic line, reflecting the mild pullback. Generally bearish readings from both the weekly and daily indicators showed that the FBM KLCI is likely to continue to consolidate in the coming week.

The short term trend of the FBM KLCI has turned sideways with a downward bias and the medium term trend is also sideways. Hence, a choppy market is expected ahead. The longer term trend, even though is still up at the moment maybe challenge if the key index continue to come under selling pressure. Immediate overhead resistance zone is envisaged at 1,591 to 1,600 while the immediate downside support zone is at 1,579 to 1,566.

Last Friday, the Dow fell -34.44 points or -0.27% to close at 12,820.60. This week, the FBM KLCI is likely to trade within a range of 1,556 to 1,610, and for today, it is likely to trade within a range of 1,558 to 1,606.

This week's expected range: 1556 – 1610
Today’s expected range: 1558 – 1606

Resistance: 1592, 1599, 1606
Support: 1558, 1565, 1575

Friday, May 11, 2012

FBM KLCI - higher on technical rebound


Stocks on Bursa Malaysia rebounded yesterday on renewed buying interest in blue-chip counters despite the negative sentiment on most regional markets, and Wall Street overnight, lost further ground with key stock indices, slipping between 0.4% and 0.8%. Most eyes were now on Europe as the recent election results in Greece and Spain had added political ambiguity to its debt crisis and economic malady. The FBM KLCI was 3.16 points or 0.20% better at 1,588.06. It had opened slightly lower by 0.93 of a point at 1,583.97. Gainers led losers by 376 to 358 while 325 counters were unchanged. Turnover improved to 1.4 billion shares valued at RM1.399 billion from the 1.281 billion shares valued at RM1.414 billion on Wednesday.

The FBM KLCI opened 0.93 point lower at 1,583.97 and slipped to the intra-day low of 1,583.52 within the first five minutes of trading. The key index then rebounded and moved higher into the positive territory to hit the intra-day high of 1,590.20 before pulling back to close off high. Chart-wise, the FBM KLCI formed a bullish white piercing-line candlestick, a bottom reversal candle pattern, which indicates the bulls were fighting back after being beaten down a day earlier. The FBM KLCI might continue yesterday upward momentum to move higher today. However, strong resistance was seen at the 1,590-point level posted by the 30-day SMA, if the FBM KLCI is able to breakthrough this tough resistance level with conviction, the key index might move higher to re-test the 1,600-point psychological level.

MACD has turned upward marginally, and is just slightly below the signal-line and the zero-line, and a slight up move today will generate a golden-cross in the MACD which signals the consolidation is over and a buy call. RSI (14) hooked up to 51.8, indicating the short term relative strength of the FBM KLCI is back to the mildly bullish neutral zone. Stochastic reversed up to 62.8 from 56.7 a day earlier, indicating an improvement in the index’s strength as well as a continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI is still in a consolidation mode but with an upward bias.

The short term trend of the FBM KLCI has turned sideways range-bound as the index is now bound between the 10 and 30-day SMA, and a breakout above the 30-day SMA is likely to see the key index resuming its uptrend and move towards the 1,600-point level. The medium term trend is sideways while the long term uptrend still remained intact. With interest in blue-chips seen picking up, the FBM KLCI is likely to have a bullish bias.

Overnight, the Dow rebounded +19.98 points or +0.16% to close at 12,855.04. Today, the FBM KLCI is likely to trade within a range of 1,577 to 1,597.

This week's expected range: 1553 – 1614
Today’s expected range: 1577 – 1597

Resistance: 1591, 1594, 1597
Support: 1577, 1580, 1584

Stocks to watch: AIRASIA, MUDAJYA, MKH

Thursday, May 10, 2012

FBM KLCI - likely to fall further


Stocks on Bursa Malaysia ended lower yesterday with brisk selling in most blue-chip counters due to lack of fresh catalysts. The local market came under pressure in line with the generally negative sentiment in most regional markets, as investors were still worried over the political upheaval in Greece and France which would hurt the Eurozone debt progress. The FBM KLCI fell 5.7 points or 0.36% lower to close at 1,584.90 after opening 0.43 point higher at 1,591.03. Losers led gainers by 450 to 273 while 313 counters were unchanged. Turnover rose to 1.281 billion shares valued at RM1.414 billion compared with 1.274 billion shares worth RM1.235 on Tuesday.

The FBM KLCI opened 0.43 points higher at 1,591.03 and slipped lower for the rest of the day with weak intermittent rebound, and settled at the lowest point of the day. Chart-wise, the formed a bearish black Marubozu candlestick with a dark-cloud-cover pattern, which indicates sellers were dominant for the day and is a key top reversal candle pattern. Hence, the FBM KLCI is likely to fall further today with immediate downside support zone at 1,579 to 1,566.

MACD has turned flat and is still below the zero-line and the signal-line, indicating a pause in the rebound and is still bearish bias. RSI (14) has hooked downward to 49.6, indicating the short term relative strength has again turned mild bearish. Stochastic also hooked downward to 56.7 but still above the slow stochastic line, reflecting the pullback in the key index. Readings from the indicators showed that the FBM KLCI is in a correction mode with a bearish bias.

With the bearish pullback yesterday, the FBM KLCI has again fallen below the 5, 20 and 30-day SMA but is still above the 10-day SMA which is currently at 1,581-point. If the FBM KLCI continues to fall below the 10-day SMA, then the short term downtrend is likely to continue and spell an end to the recent rebound. The medium term trend represented by the 50 and 60-day SMA has turned sideways with the 60-day SMA currently at 1,580-point, and a break below the 60-day SMA would likely see the key index re-visiting the recent support of 1,566. The long term trend, nevertheless, is still up at the moment. In short, the FBM KLCI is likely to remain in a consolidation mode with a downward bias.

Overnight, the Dow fell another -97.03 points or -0.75% to close at 12,835.06. Today, the FBM KLCI is likely to trade within a range of 1,576 to 1,597.

This week's expected range: 1553 – 1614
Today’s expected range: 1576 – 1597

Resistance: 1589, 1593, 1597
Support: 1576, 1580, 1582

Wednesday, May 9, 2012

FBM KLCI - rebounded in tandem with regional recovery


Stocks on Bursa Malaysia finished better yesterday on a technical rebound in tandem with the recovery in regional riskier assets from Monday’s losses. The FBM KLCI was 5.73 points higher at 1,590.60. It had opened slightly lower by 0.4 point at 1,584.47. Gainers led gainers by 404 to 307 while 357 counters were unchanged. Turnover rose to 1.274 billion shares valued at RM1.235 billion from Monday’s 963.02 million shares valued at RM1.194 billion.

The FBM KLCI opened 0.40 of a point lower at 1,584.47 and slipped lower to the intra-day low of 1,583.72 rights after opening, but recovered quickly to move higher for the rest of the day. Some last minute buying of selected blue-chips pushed the key index to close at the highest point of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates buyers were dominant, and this also confirmed the possible reversal signal generated by the Doji candlestick a day earlier. With the bullish up move yesterday, the FBM KLCI is likely to continue climbing higher today and the immediate overhead resistance zone is at 1,594 to 1,600.

MACD continued to climb higher and the histogram also turned shorter upward, indicating continued easing of the bearish momentum, as the MACD line is still below the zero-line as well as below the signal line. Nonetheless, the gap is closing up, and a golden cross above the signal line is expected soon. RSI (14) hooked upward to 53.8, indicating the short term relative strength is back to the mildly bullish state. Stochastic was higher at 62.2, indicating a continued improvement of the index’s strength and continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI is slowly shrugging off its short term bearishness to try to regain its upward momentum.

The short term trend of the FBM KLCI has turned up as the index is now closing above the short term 5, 10 and 20-day SMA and is sitting right on the 30-day SMA. A continue up move above the 30-day SMA would mean the key index is turning bullish for the short term. However, the lower support trend line of the longer term uptrend channel which is currently at 1,600-point will serve as strong overhead resistance. If only the FBM KLCI can climb back into the uptrend channel, then the threat of a downtrend is reduced.

Overnight, the Dow fell -76.44 points or -0.59% to close at 12,932.09. Today, the FBM KLCI is likely to trade within a range of 1,579 to 1,598.

This week's expected range: 1553 – 1614
Today’s expected range: 1579 – 1598

Resistance: 1593, 1596, 1598
Support: 1579, 1581, 1586

Stocks to watch: MBL, MAYBULK, MPHB, PRESBHD, KPSCB

Tuesday, May 8, 2012

FBM KLCI - lower in line with weak regional performance


Stocks on Bursa Malaysia ended lower yesterday in line with regional trend where shares were down, reacting negatively to developments in the global front. Wall Street’s equity bellwethers slumped between 1.3% and 2.2% last Friday, following the release of a much weaker-than-expected job data. A blurry progress on the Eurozone debt saga further dented investors’ sentiments after the results of elections in France and Greece showed public discontent with the austerity measures taken to tackle the crisis. The FBM KLCI fell 6.17 points or 0.39% to 1,584.87, after having opened 5.87 points lower at 1,585.17. Losers led gainers by 540 to 208 while 305 counters were unchanged. Turnover fell to 963.02 million shares valued at RM1.194 billion from 1.33 billion shares valued at RM1.59 billion on last Friday.

Taking cue from the weak performance of Wall Street last Friday, the FBM KLCI opened with a down gap of 5.87 points and slipped lower to the intra-day low of 1,579.74. It rebounded at late morning and moved sideways, and a last minute buying of selected blue-chips pushed the key index to close near the high of the day. Chart-wise, the FBM KLCI formed a dragon-fly Doji candlestick which indicated the bears were initially dominant but later the bulls fight back to lift the key index off low. The appearance of a dragon-fly Doji after a gap down indicated the market was reluctant to go lower, and hence might rebound to move higher. Immediate overhead resistance is at 1,591 while the downside support is at 1,579.

MACD continued to climb higher even though is still below the zero-line, and the histogram also turned shorter upward, indicating a continued reduction of the bearish momentum. RSI (14) hooked downward to 49.8, indicating the short term relative strength is currently neutral with a mild bearishness. Stochastic continued to move higher to 54.1 from 50.8, indicating the short term up cycle is still intact. Mixed readings from the indicators showed that the FBM KLCI is in a consolidation mode with an upward bias.

With the pullback yesterday, the short term trend of the FBM KLCI remained down, and this has made last week’s four consecutive days of rebound a possible technical rebound in a larger downtrend. Putting it in the Elliott Wave term, it could be the ‘B’ wave of an A-B-C, and if the key index continues to move lower below the critical support of 1,566, it might have a possible downside target of 1,548 to 1,521. On the other hand, in order for the FBM KLCI to reverse the bearish scenario, it has to close above 1,591 or higher. Nevertheless, the longer term trend is still up. With the total volume dwindled to below one billion shares, the market is likely to continue to consolidate.

Overnight, the Dow fell a marginal -29.74 points or -0.23% to close at 13,008.53. Today, the FBM KLCI is likely to trade within a range of 1,575 to 1,592.

This week's expected range: 1553 – 1614
Today’s expected range: 1575 – 1592

Resistance: 1587, 1590, 1592
Support: 1575, 1577, 1581

Monday, May 7, 2012

FBM KLCI - likely to be range-bound with an upward bias



Stocks on Bursa Malaysia ended higher last Friday, with active buying interest across the board despite weak regional markets and Wall Street. Major US stock indices lost between 0.5% and 1.2% at the closing bell overnight on Wall Street following disappointing economic data. However, the local market remained buoyant and was not distracted by external market sentiment. The benchmark FBM KLCI was 7.87 points higher at 1,591.04 after moving between 1,585.06 and 1,591.04, it had opened 2.05 points higher at 1,585.22. On a Friday-to-Friday basis, the FBM KLCI jumped 23.24 points from previous Friday’s close of 1,567.80. Gainers led losers by 456 to 274 while 352 counters were unchanged. Turnover rose to 1.33 billion shares valued at RM1.59 billion from Thursday’s 1.295 billion shares worth RM1.214 billion. Total weekly volume decreased to 4.904 billion shares worth RM5.62 billion from previous week’s 7.309 billion shares valued at RM7.520 billion.

The FBM KLCI opened last Monday 2.66 points higher at 1,570.46 and moved higher gradually to hit the intra-day high of 1,574.49 before closing the last trading day of April at 1,570.61. Bursa Malaysia was closed for the Labour Day holiday on Tuesday. Trading resumed on Wednesday with the FBM KLCI opened with an up gap of 1.87 points at 1,572.47 and moved higher for the rest of the day to close at an intra-day high of 1,582.39 with a gain of 11.78 points. Thursday saw a mixed market due to the lack of direction, which kept the market quiet throughout the trading day, and the FBM KLCI was 0.78 of a point better at 1,583.17. The local bourse saw active buying interest on Friday which propels the FBM KLCI to close at the highest point of the week at 1,591.04.

On the weekly chart, the FBM KLCI formed a bullish white candlestick in Harami position which indicates the fight back of the bulls after being beaten down for two consecutive weeks, and the key index is likely to move higher in the coming week with a possibility of re-testing the historical high of 1,609.33. On the daily chart, the FBM KLCI formed a bullish white Marubozu candlestick which indicates the bulls were in full control for the day, and the key index was up for four consecutive days. With the bullish up move last Friday, the FBM KLCI has broken out of the downtrend channel and is likely to continue its upward momentum to move higher. Immediate overhead resistance zone is at 1,594 to 1,600.

Weekly MACD was marginally lower and is tapering off, and its histogram also turned shorter marginally, indicating a waning of the weekly downward momentum. Daily MACD continued to climb higher, while its histogram was shorter upward, indicating a reduction in the daily bearish momentum. However, as the MACD is still below the zero-line, this improvement may turn out to be just a technical rebound. Weekly RSI (14) hooked up strongly to 60.8 from 55.9 previously, indicating the weekly relative strength has moved back to the bullish zone. Daily RSI (14) climbed higher to 54.5 from 48.8, indicating the daily relative strength of the FBM KLCI had turned mildly bullish from mildly bearish previously. Weekly Stochastic, however, continued to slide lower to 74.2 from 78.3 previously, indicating the weekly down cycle is still intact. Daily Stochastic, on the contrary, climbed higher to 50.8, indicating an improvement in the short term strength of the key index and continuation of the daily up cycle. Readings from the indicators showed that from the weekly perspective the FBM KLCI is still in a consolidation mode, while from the daily perspective, the short term correction of the FBM KLCI is probably nearing over; however, more data is required to confirm this.

The short term trend of the FBM KLCI has reversed up as the key index has moved above the upper resistance trend line of the downtrend channel. However, it is still below the lower support trend line of the longer term uptrend channel, the key index will have to close at least above the 1,595-point level in order to get back into the uptrend channel. The medium term trend is sideways while the longer term uptrend is still intact. For the coming week, the FBM KLCI is likely to move range-bound but with an upward bias. Overhead resistance zone is at 1,594 to 1,609 with 1,600 being the strong psychological resistance level. While the downside support zone is pegged at 1,585 to 1,566.

Last Friday, the Dow fell -168.32 points or -1.27% to close at 13,038.27. This week, the FBM KLCI is likely to trade within a range of 1,553 to 1,614, and for today, it is likely to trade within a range of 1,581 to 1,597.

This week's expected range: 1553 – 1614
Today’s expected range: 1581 – 1597

Resistance: 1593, 1595, 1597
Support: 1581, 1583, 1587

Stocks to watch: MAYBULK, MUDAJYA, BENALEC, COASTAL, MULPHA