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Friday, June 29, 2012

FBM KLCI - lower on profit-taking


Stocks on Bursa Malaysia closed lower yesterday on across-the-board selling pressure in key blue-chip counters with the FBM KLCI losing 7.65 points or 0.48% to close at 1,594.24. Persistent selling has been evident in the market since the day before and even the listing of Felda Global Ventures Holdings Bhd (FGVH), the world’s second largest initial public offering (IPO), could not help prop it up. Losers led gainers by 476 to 248 while 306 counters were unchanged. Turnover rose to 1.563 billion shares valued at RM2.741 billion from the 1.179 billion valued at RM1.631 billion on Wednesday.

The FBM KLCI opened 0.52 point higher at 1,602.41 and surged to the intra-day high of 1,602.98 within the first minute after opening, and heavy profit-taking activity sent the key index down to the intra-day low of 1,591.85 at mid morning before rebounding to move sideways. Chart-wise, the FBM KLCI formed a bearish engulfing candlestick which indicates heavy selling pressure on profit-taking, and the key index is likely to fall further or consolidate itself today. Immediate downside support zone is at 1,591 to 1,581 while the resistance zone is at 1,602 to 1,611.

MACD has hooked downward slightly while its histogram has turned shorter, indicating a continued loss in the key index’s momentum. Nevertheless, as the MACD is still above the signal-line, the current weakness is viewed as a correction is a bull market. RSI (14) slipped lower to 56.4 from 61.7 previously, indicating the short term relative strength has turned mildly bullish from bullish. Stochastic was lower at 64.8, indicating further loss in market strength and a continuation of the short term down cycle. Readings from the indicators showed that the FBM KLCI is undergoing a short term correction, and is likely to further consolidate itself.

The short term trend of the FBM KLCI has again turned weak as the index is currently closing below the short term 5 and 10-day SMA, and is likely to slip lower to the next support level provided by the 20-day SMA at 1,583. Nevertheless, the medium and longer term uptrend still remained intact. As the market is coming to a mid-year closing today, some window dressing activity is expected which might give some support to the key index.

Overnight, the Dow fell -24.75 points or -0.20% to close at 12,602.26. Today, the FBM KLCI is likely to trade within a range of 1,578 to 1,614.

This week's expected range: 1559 – 1636
Today’s expected range: 1578 – 1614

Resistance: 1601, 1608, 1614
Support: 1578, 1585, 1589

Stocks to watch: MISC, TAMBUN, HOHUP, IJACOBS, PENERGY

Thursday, June 28, 2012

FBM KLCI - higher on technical rebound


Stocks on Bursa Malaysia ended on a mixed note with The FBM KLCI finished above the 1,600-level yesterday, taking cue from gains on regional markets. The benchmark index settled at 1,601.89, inching up 7.79 points or 0.49% after shuffling between 1,593.56 and 1,601.89 throughout the day. It had opened 0.37 of a point better at 1,594.47. Losers outnumbered gainers by 366 to 364, while 309 counters were unchanged. Total volume rose to 1.179 billion valued at RM1.631 billion from the 1.047 billion shares worth RM1.479 billion transacted on Tuesday.

The FBM KLCI opened 0.37 point lower and slipped to the intra-day low of 1,593.56 within the first five minutes after opening, and it rebounded strongly to move higher for the rest of the day to end at the day’s high. Chart-wise, the FBM KLCI formed a bullish Harami candlestick which indicates fight back by the bulls or technical rebound after a day of hammering by the bears, and the key index is likely to move higher today on follow through buying. Immediate overhead resistance zone is at 1,603 to 1,611 while the immediate downside support zone is at 1,593 to 1,590.

MACD has hooked upward but its histogram was shorter, indicating a mixed condition or consolidation. RSI (14) hooked upward to 61.7 fro 58 previously, indicating the short term relative strength of the FBM KLCI has again turned bullish. Stochastic, however, continued to slip lower to 73.4, indicating the short term down cycle is not over yet. Mixed signals from the indicators showed that the FBM KLCI is still in a consolidation mode but with an upward bias.

With the rebound yesterday, the FBM KLCI has again closed above the short term 5-day SMA and other medium to long term moving averages, indicating the uptrend of the FBM KLCI is still intact. With the listing of Felda Global Ventures Holdings Bhd today, the sentiment of the market is likely to be bullish.

Overnight, the Dow rose +92.34 points or +0.74% to close at 12,627.01. Today, the FBM KLCI is likely to trade within a range of 1,588 to 1,611.

This week's expected range: 1559 – 1636
Today’s expected range: 1588 – 1611

Resistance: 1605, 1608, 1611
Support: 1588, 1590, 1596

Stocks to watch: PERMAJU, INGRESS, WELLCAL,  BIMB, DIGISTA

Wednesday, June 27, 2012

FBM KLCI - lower on profit-taking


Stocks on Bursa Malaysia ended broadly lower yesterday in line with the weaker regional sentiment, weighed down by the Eurozone debt crisis that has struck global risk appetite, leaving most equity markets weaker. The benchmark FBM KLCI stood at 1,594.1, down 9.02 points or 0.56% after opening 0.74 of a point lower at 1,602.38. Losers outnumbered gainers by 472 to 274 while 327 counters closed unchanged. Turnover dwindled to 1.047 billion shares worth RM1.479 billion from 1.072 billion shares worth RM1.250 billion on Monday.

Taking cue from the weak performance of Wall Street overnight, the FBM KLCI opened 0.74 point lower at 1,602.38 and rebounded to the intra-day high of 1,603.67 in early morning trade before profit-taking pressure sent it lower for the rest of the day hitting an intra-day low of 1,593.80 before rebounding slightly to close off low. Chart-wise, the FBM KLCI formed a bearish black candlestick which confirmed the top reversal candle signal formed on Monday, and the benchmark index is likely to further consolidate itself today. Immediate downside support zone is at 1,591 to 1,581 provided by the 10 and 20-day SMA while the overhead resistance zone is at 1,603 to 1,611.

MACD has hooked downward but is still above its signal-line, and its histogram has turned shorter indicating a reduction and possibly an initial change in the momentum direction. RSI (14) has slipped lower to 58, indicating a change in the short term relative strength from bullish to mildly bullish. Stochastic was lower at 78.3 from 87.2, indicating the market strength is turning weaker and the short term down cycle has started. Readings from the indicators showed that the FBM KLCI has entered a short term consolidation mode but the underlying tone is still bullish.

With the FBM KLCI closing below the 5-day SMA, the short term correction has started, but the overall trend still remained up. The downtrend yesterday is viewed as just a normal correction in a longer term uptrend, and when the correction is over, the FBM KLCI is likely to stage a re-test of the historical peak. Overall volume has again shrink to one billion shares level, reflecting the correction mode but it is likely to pickup again in conjunction with the listing of Felda Global Ventures Holdings Bhd, scheduled for tomorrow, June 28.

Overnight, the Dow rebounded +32.01 points or +0.26% to close at 12,534.67. Today, the FBM KLCI is likely to trade within a range of 1,580 to 1,614.

This week's expected range: 1559 – 1636
Today’s expected range: 1580 – 1614

Resistance: 1601, 1607, 1614
Support: 1580, 1587, 1590

Tuesday, June 26, 2012

FBM KLCI - sign of toppishness


Stocks on Bursa Malaysia ended mixed yesterday with the FBM KLCI touching a record intra-day high of 1,611.50 after opening 0.36 of a point easier at 1,602.71, but ended only 0.05 of a point higher at 1,603.12 on heavy profit-taking activity. The benchmark index performed quite well in contrast to regional market performances as it held up firmly, not giving up all gains on window dressing. Gainers led losers 371 to 360 while 337 counters were unchanged. Turnover eased to 1.072 billion shares worth RM1.250 billion from last Friday’s 1.478 billion shares worth RM1.703 billion.

The FBM KLCI opened 0.36 point lower at 1,602.71 and slipped to the intra-day low of 1,601.10 within the first ten minutes after opening, it then rebounded strongly and rallied to a new record intra-day high of 1,611.50 but gave back much of its gains on heavy profit-taking activity to close almost unchanged. Chart-wise, the FBM KLCI formed a white spinning-top candlestick with a long upper shadow which indicates a bullish euphoria initially in pushing the key index higher, but was later hammered by the bears. It also indicated heavy resistances at the historical high region of 1,609. With the price action yesterday, the key index is likely to consolidate itself first before staging another attempt to re-test the historical high level.

MACD was higher but its histogram turned slightly shorter, indicating a reduction in the upward momentum, and an inherent weakness is building up. RSI (14) was flat at 64.7, indicating an unchanged condition of the short term relative strength. Stochastic slipped lower to 87.2 from 92.7, and has crossed below the slow stochastic line, indicating a possible beginning of a short term correction. Readings from the indicators showed that the FBM KLCI is taking a breather after the recent up move and is likely to consolidate itself for the immediate short term.

The uptrend of the FBM KLCI remained intact as the key index is still closing above all the moving averages. However, the immediate short term 5-day SMA is just 1.76 points lower at 1,601.39, giving the key index an immediate support. If the key index slipped below this immediate 5-day SMA support, it is likely that it will slide lower to the immediate support zone of 1,594 to 1,589. Judging from the dwindling volume, the overall market is likely to further consolidate itself.

Overnight, the Dow tumbled -138.12 points or -1.09% to close at 12,502.66. Today, the FBM KLCI is likely to trade within a range of 1,588 to 1,622.

This week's expected range: 1559 – 1636
Today’s expected range: 1588 – 1622

Resistance: 1610, 1616, 1622
Support: 1588, 1594, 1599

Stocks to watch: CANONE, PADINI, HSL, YTLPOWR

Monday, June 25, 2012

FBM KLCI - bullish momentum likely to persist



Stocks on Bursa Malaysia closed firmer last Friday, bolstered by funds buying in heavyweights despite the slide in regional markets on renewed concern over weak global market sentiment. The FBM KLCI edged up 1.64 points or 0.1% to close at 1,603.07 after opening in the red at 1,599.7 and fluctuated between 1,594.44 and 1,608.65. On a Friday-to-Friday basis, the benchmark index gained 22.1 points from previous Friday's closing of 1,579.23. Losers led gainers by 410 to 312 while 331 counters were unchanged. Turnover was at 1.478 billion shares worth RM1.703 billion compared with Thursday’s 1.572 billion shares worth RM1.577 billion. Weekly volume rose to 4.848 billion shares worth RM6.437 billion from previous week's 3.768 billion shares valued at RM7.207 billion.

Taking cue from the favourable result of the Greece’s election, the FBM KLCI opened last Monday with an up gap of 4.12 points at 1,583.35 and climbed to the intra-day high of 1,588.54 but settled with a gain of 3.5 points to close at 1,582.73. Bucking the regional downtrend, the FBM KLCI closed 12.25 points higher at 1,594.98 on Tuesday after opening 1.46 points lower at 1,581.27. On Wednesday, the FBM KLCI closed higher for the third consecutive days with a gain of 9.41 points at 1,604.39 due to active local funds buying of index-linked blue chips. Profit-taking activity set in on Thursday with the FBM KLCI closing lower by 2.96 points at 1,601.43 after opening 1.55 points higher at 1,605.94. Taking cue from a 250 points drop of the Dow overnight, the FBM KLCI opened last Friday 1.73 points lower and fell to the intra-day low of 1,594.44, losing 6.99 points at its worst but rebounded strongly to hit the intra-day high of 1,608.65 before settling with a 1.64 points gain to end the week at 1,603.07.

On the weekly chart, the FBM KLCI formed a bullish white candlestick which gaps away from the previous week’s candlestick, and this indicated a bullish sentiment of the benchmark index. At the same time, the weekly candlestick has gone above all the moving averages which indicated a bullish state. On the daily chart, the FBM KLCI formed a high wave white spinning-top which indicated a very volatile trading day on last Friday, and the market was a bit of uncertain of its direction but with an upward bias. The benchmark index came close to the historical high level of 1,609.33 but was short of 0.68 of a point to break it, and it is likely to stage a re-test of the historical high level this week. A break of the historical high level is likely to see the FBM KLCI moving higher to an uncharted territory with a possible target of 1,632 and 1,661.

Weekly MACD has hooked up, and its histogram also turned shorter for the fourth consecutive bars, indicating a change in the weekly momentum from down to up. Nevertheless, the weekly MACD is still below the weekly signal-line but above the zero-line. Daily MACD was higher but its histogram was slightly shorter, reflecting the correction that took place. Anyway, the underlying tone is still bullish. Weekly RSI (14) was higher at 60.4, indicating the weekly relative strength of the FBM KLCI has just turned bullish. Daily RSI (14) has hooked upward to 64.7, is also in a bullish state. Weekly Stochastic was higher at 69.7, indicating a continuation of the weekly up cycle and improvement of the weekly market strength. However, the daily Stochastic was lower at 92.7, reflecting the pullback in the key index. Readings from both the weekly and daily indicators showed that the FBM KLCI has turned bullish and the upward momentum is likely to send the index to a higher level.

The FBM KLCI has resumed its uptrend as it is now staying above all the short, medium and long term moving averages, and is bullish. It is likely that the benchmark index will re-test and possibly break the historical high level before the listing of Felda Global Ventures Holdings Bhd, scheduled for June 28 as the bullish momentum builds up. With volume in the 1.5 billion shares region, the overall market is likely to see more rotational play coming in.

Last Friday, the Dow rose +67.21 points or +0.53% to close at 12,640.78. This week, the FBM KLCI is likely to trade within a range of 1,559 to 1,636, and for today, it is likely to trade within a range of 1,581 to 1,623.

This week's expected range: 1559 – 1636
Today’s expected range: 1581 – 1623

Resistance: 1610, 1617, 1623
Support: 1581, 1587, 1595

Stocks to watch: PERDANA, IJACOBS, L&G, SEAL, RAMUNIA, CANONE

Friday, June 22, 2012

FBM KLCI - lower on profit-taking


Stocks on Bursa Malaysia closed on easier note yesterday following weak global market sentiment and profit-taking. Concerns over the poor external economic environment continued to rise after US Federal Reserve signaled weaker economic outlook and a slower drop in unemployment rate. The FBM KLCI fell by 2.96 points or 0.18% to close at 1,601.43 after opening 1.55 points higher at 1,605.94. Losers led gainers by 424 to 354 while 316 counters were unchanged. Turnover rose to 1.572 billion shares worth RM1.577 billion from 1.401 million shares worth RM1.763 billion yesterday.

The FBM KLCI opened 1.55 points higher at 1,605.94 and surged to the intra-day high of 1,607.31 within the first five minutes after opening, and profit-taking pressure which emerged pressed the key index lower for the rest of the day to hit the intra-day low of 1,599.75 before rebounding slightly to close off low. Chart-wise, the FBM KLCI formed a dark-cloud-cover candlestick pattern which did not penetrate below the mid point of the previous day’s candle, and this indicated mild profit-taking activity. It is likely that the FBM KLCI may continue to slip lower today to consolidate itself. Immediate downside support zone is at 1,599 to 1,594 while the overhead resistance zone is at 1,607 to 1,609.

MACD and its histogram continued to rise, indicating the upward momentum is still intact. RSI (14) has hooked downward to 64 from 66.1 previously, reflecting the mild profit-taking activity, and the short term relative strength is still in the bullish state. Stochastic was marginally higher at 95.9 and is tapering off, indicating a reduction in the market strength, but the short term up cycle is still intact. Readings from the indicators showed that the FBM KCLI is undergoing a mild profit-taking process and the overall upward momentum is still intact.

Despite the pullback yesterday, the overall trend of the FBM KLCI remained up as the key index is still above all the moving averages. The FBM KLCI is likely to stage a re-test of the historical high of 1,609.33 after the correction is over. With the overall volume improving, the market is likely to see more rotational play.

Overnight, the Dow fell -250.82 points or -1.96% to close at 12,573.57. Today, the FBM KLCI is likely to trade within a range of 1,590 to 1,615
 
This week's expected range: 1561 – 1614
Today’s expected range: 1590 – 1615

Resistance: 1606, 1611, 1615
Support: 1590, 1595, 1598

Thursday, June 21, 2012

FBM KLCI - likely to re-test historical high


Stocks on Bursa Malaysia closed higher for the third consecutive day yesterday, surpassing the 1,600-point level, bolstered by gains in selected consumer and blue-chip stocks due to active local funds buying of index-linked blue chips. Tracking the positive movement of its regional peers, the FBM KLCI closed 9.41 points higher at 1,604.39 after opening 0.96 point higher at 1,595.94. Gainers thumped losers by 621 to 196 while 291 counters were unchanged. Turnover was higher at 1.401 billion shares worth RM1.763 billion from the 932.560 million units valued at RM1.459 billion posted on Tuesday.

Taking cue from the strong performance of the Dow overnight, the FBM KLCI opened 0.96 of a point higher at 1,595.94 and slipped to the intra-day low of 1,594.88 rights after the opening. The key index rebounded and continued to move higher with intermittent mild pullback to finish at the highest point of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates buyers were in a state of bullish euphoria, and the key index might continue its upward momentum to move higher today. However, over-bullishness near the top often attracts heavy profit-taking. Immediate overhead resistance is at the historical high of 1,609.33, and a break above this level will send the FBM KLCI into an uncharted territory with a possible target of 1,632 and 1,661.

MACD continued to surge higher and so is the histogram, indicating a strong increase in the upward momentum. RSI (14) was higher at 66.1 from previous reading of 62.5, indicating a continued improvement of the short term relative strength and the FBM KLCI is getting more bullish. Stochastic was higher at 95.3, indicating a very strong market strength and continuation of the up cycle, nevertheless, it also indicated a short term overbought situation, and some pullback on profit taking is expected ahead. Readings from the indicators showed that the FBM KLCI is in a bullish state now, and the upward momentum is likely to carry the key index to a higher level with some shallow pullback expected ahead.

As mentioned in the previous analysis, the FBM KLCI will turn bullish after it crosses the 1,591-point level, and it did. The trend of the FBM KLCI is currently up and bullish as it is now staying above all the moving averages. With the total volume picking up again and reached 1.4 billion shares yesterday after staying below the 1.0 billion shares mark for about four weeks, it is likely to see more rotational play on the second and third liners.

Overnight, the Dow fell -12.94 points or -0.10% to close at 12,824.39. Today, the FBM KLCI is likely to trade within a range of 1,588 to 1,614
 
This week's expected range: 1561 – 1614
Today’s expected range: 1588 – 1614

Resistance: 1608, 1611, 1614
Support: 1588, 1591, 1598

Stocks to watch: TGOFFS, SCOMIMR, CRESBLD, KINSTEL, IJACOBS

Wednesday, June 20, 2012

FBM KLCI - regained its bullishness


Stocks on Bursa Malaysia closed firmer yesterday, bolstered by buying interest in blue-chip stocks despite the retreat on most regional markets. Although most regional markets were lower on recurring concern that the Eurozone crisis is far from over, European and US equities trended higher on positive sentiment over the Spanish debt auction, and a meeting of the US Federal Reserve later yesterday. The FBM KLCI closed 12.25 points or 0.77% higher at 1,594.98 after opening 1.46 points lower at 1,581.27. Gainers thumped losers by 467 to 264 while 300 counters were unchanged. Turnover softened slightly to 932.560 million shares worth RM1.459 billion from the 941.093 million units valued at RM1.637 billion posted on Monday.

The FBM KLCI opened 1.46 points lower at 1,581.27 but rebounded to move higher for the rest of the day and ended the day at the highest point to form a bullish white Marubozu candlestick in an engulfing pattern. This represents a very bullish tone of the market and hence the benchmark index is likely to climb higher to test the psychological resistance level of 1,600-point today. If the FBM KLCI is able to breakthrough the 1,600-point successfully, the historical high level of 1,609.33 will be the next higher target.

MACD and its histogram continued to climb higher, indicating an increased in the upward momentum. RSI (14) was higher at 62.5, entering the bullish zone for the first time since breaking below it on April 16, indicating the short term relative strength has regained its bullishness. Stochastic has turned upward to 91.5 and has also crossed above the slow stochastic line, indicating a regained of the market strength and continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI has regained its bullishness and is likely to move higher.

As mentioned in previous analysis that the FBM KLCI would only turn bullish if it is able to close above the 1,591-point level, and it did. The trend of the FBM KLCI is now up and bullish as it is closing above all the short, medium and long term moving averages. Immediate overhead resistance zone is at 1,597 to 1,609, where 1,597 was a pivot high formed on July 11 2011, and the downside support zone is at 1,581 to 1,570.

Overnight, the Dow gained +95.51 points or +0.75% to close at 12,837.33. Today, the FBM KLCI is likely to trade within a range of 1,572 to 1,609
 
This week's expected range: 1561 – 1609
Today’s expected range: 1572 – 1609

Resistance: 1600, 1605, 1609
Support: 1572, 1576, 1585

Stocks to watch: MHB, WELLCAL, JCY, CYPARK, YTL

Tuesday, June 19, 2012

FBM KLCI - higher but with signs of possible reversal


Stocks on Bursa Malaysia closed firmer yesterday as investors took cue from the uptrend on regional bourses. The favourable outcome of the general election in Greece, which saw pro-bailout political parties winning an adequate number of parliamentary seats to form a new government, served as a positive impetus for regional equity markets. The FBM KLCI gained 3.5 points or 0.22% to close at 1,582.73 after hitting an intra-day high of 1,588.54. Gainers thumped losers by 500 to 236 while 281 counters were unchanged. Turnover softened to 941.093 million shares worth RM1.637 billion from the 979.94 million units, valued at RM2.418 billion posted on Friday.

Taking cue from the favourable result of the Greece election, the FBM KLCI opened with an up gap of 4.12 points at 1,583.35 and climbed to the intra-day high of 1,588.54 within the first ten minutes of trading. This was followed by heavy profit-taking which pressed the key index lower and traded in a narrow range; it hit the intra-day low of 1,582.25 before rebounding slightly to close off low. Chart-wise, the FBM KLCI formed a black inverted hammer candlestick or commonly known as a shooting star candlestick formation, which is a top reversal candle pattern. It indicated heavy profit-taking activity after an initial up move, and hence the FBM KLCI is likely to fall further to close the up gap and consolidate itself today. Immediate support zone is at 1,582 to 1,579 while the overhead resistance zone is at 1,588 to 1,591.

MACD climbed higher, and so is the histogram, indicating an increased in the upward momentum. RSI (14) was higher at 57.1, indicating a continued improvement in the short term relative strength in the mildly bullish zone. Stochastic was however marginally lower at 80.1 from 80.5 previously, indicating an inherent weakness is possibly developing and a correction might be expected ahead. Readings from the indicators showed that the FBM KLCI is gradually gaining its upward momentum but signs are there that it may undergo a correction.

The trend of the FBM KLCI has turned up as it is now closing above all the short, medium and long term moving averages. However, the key index must close above the 1,591-point level in order for it to gain further strength to rally higher. Otherwise, it may continue to move sideways range-bound. With the overall volume improving, the market is likely to see some rotational play on the second and third liners.

Overnight, the Dow fell -25.35 points or -0.20% to close at 12,741.82. Today, the FBM KLCI is likely to trade within a range of 1,574 to 1,595.
 
This week's expected range: 1561 – 1594
Today’s expected range: 1574 – 1595

Resistance: 1587, 1591, 1595
Support: 1574, 1578, 1580

Stocks to watch: TIMECOM, DRBHCOM, MALTON, L&G, MRCB

Monday, June 18, 2012

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



Stocks on Bursa Malaysia closed firmer last Friday ahead of the weekend, prompted by the possibility of additional economic stimulus being introduced by the United States and European policymakers to spur economic activities. Regional bourses were steadier with Japan’s Nikkei 225 up 0.43 of a point at 8,569.32, Hong Kong’s Hang Seng surged 425.54 points to 19,233.94 and Singapore’s Straits Times Index improved 40.19 points to 2,814.00. The FBM KLCI closed 8.29 points or 0.53% higher at 1,579.23 after fluctuated between 1,574.15 and 1,580.9 throughout the day, and week-on-week, the benchmark index gained 8.61 points from previous Friday's closing of 1,570.62. Gainers thumped losers by 440 to 273 while 312 counters were unchanged. Turnover surged to 979.94 million units, worth RM2.418 billion, from Thursday’s 670.945 million shares valued at RM1.127 billion, and weekly volume rose to 3.768 billion shares worth RM7.207 billion from previous week's 3.372 billion shares valued at RM5.642 billion.

Last week was a week of uncertainty with the market alternating between optimism and pessimism throughout the week. Taking cue from the strong performance of the Dow the previous Friday and the Spain bailout news over the previous weekend, the FBM KLCI opened last Monday with an up gap of 5.33 points at 1,575.95 and surged to the intra-day high of 1,582.29 before ending the day 7.79 points higher at 1,578.41. The FBM KLCI closed lower on Tuesday on profit-taking to end 2.34 points lower at 1,576.07. On Wednesday, the benchmark index ended at its intra-day low level of 1,576.23 with a marginal gain of 0.16 of a point as concerns over weak market fundamentals globally heightened, and made most investors stay on the sidelines. The FBM KLCI declined 5.29 points to end at the intra-day low level of 1,570.94 on Thursday as investors continued to reduce their holdings as concerns over the weakening external economic environment continued to rise. Nevertheless, the local bourse rebounded on Friday in tandem with regional market to end Friday 8.29 points higher at 1,579.23.

On the weekly chart, the FBM KLCI formed a white spinning-top candlestick which indicates uncertainty of the market direction but with an upward bias. Immediate overhead resistance zone is at 1,582 to 1,591 while the downside support zone is at 1,574 to 1,554. A breakthrough of the upper resistance zone is likely to see the FBM KLCI rallying to retest the historical high level of 1,609.33. On the daily chart, the FBM KLCI formed a bullish white candlestick which reversed the bearish black candlestick formed on Thursday indicating optimism has set in. However, the market was still cautious when it approached the immediate resistance zone of 1,580 to 1,582 and receded after testing the 1,580-point level.

Weekly MACD was lower but tapering off, and its histogram was shorter upward, indicating a reduction in the weekly downward momentum. Daily MACD and its histogram were slightly higher, indicating a mild pickup in the daily momentum. Weekly RSI (14) hooked up to 55.8, and daily RSI (14) was also higher at 55.4 from 51.1 previously, indicating both the weekly and daily relative strength has further improved to a mildly bullish state. Weekly Stochastic rose further to 57.9 from 46.5 after crossing the slow stochastic line last week, indicating continuation of the weekly up cycle and improvement of weekly market strength. Daily Stochastic, however, just hooked up marginally to 80.5 from 79.8, reflecting the rebound and indicating the daily market strength is still strong; however, it is still below the daily slow stochastic line. Readings from both the weekly and daily indicators showed that the FBM KLCI is gradually gaining its upward momentum, and is likely to move range-bound with an upward bias in this week.

The short term trend of the FBM KLCI has turned sideways range-bound after a week of see-saw movements, and it has formed a rectangle chart pattern which indicates short term consolidation, nevertheless, it was closing above all the short term as well as the medium and long term moving averages, indicating a bullish condition. If the FBM KLCI is able to breakout above the 1,582-point level, it is likely that it will move higher to test the next resistance level at 1,591, follow by the psychological resistance level of 1,600. With Greece’s election result favoring the pro-bailout New Democracy Party, the market is likely to move higher today.

Last Friday, the Dow rose +115.26 points or +0.91% to close at 12,767.17. This week, the FBM KLCI is likely to trade within a range of 1,561 to 1,594, and for today, it is likely to trade within a range of 1,568 to 1,588.

This week's expected range: 1561 – 1594
Today’s expected range: 1568 – 1588

Resistance: 1582, 1585, 1588
Support: 1568, 1571, 1575

Stocks to watch: SUPERMX, TOPGLOV, LATEXX, OLDTOWN, PERDANA

Friday, June 15, 2012

FBM KLCI - lower in line with regional weakness


Stocks on Bursa Malaysia closed lower yesterday in line with the downtrend in regional performance as investors continued to reduce their holdings as concerns over the weakening external economic environment continued to rise. The FBM KLCI declined 5.29 points or 0.34% to 1,570.94, which was also the intra-day low level. Losers led gainers by 381 to 267 while 325 counters were unchanged. Turnover eased to 670.945 million shares valued at RM1.127 billion from Wednesday’s close of 677.021 million units worth RM1.216 billion.

The FBM KLCI opened 0.31 of a point higher at 1,576.54 and hit the intra-day high of 1,577.60 within the first fifteen minutes of trading, and it moved within a tight range of 2 points until mid afternoon where selling pressure started to appear and pushed the key index to close at the lowest point of the day. Chart-wise, the FBM KLCI formed a bearish black candlestick which confirmed the top reversal signal issued by the black inverted hammer candlestick formed the day before, and the FBM KLCI is likely to further consolidate itself with an immediate support zone at 1,568 to 1,563, while the overhead resistance zone is at 1,577 to 1,582.

MACD has hooked downward and its histogram also turned shorter, indicating a reduction in the key index’s momentum. RSI (14) was lower at 51.1, indicating the short term relative strength of the key index is now back to the mildly bullish neutral zone. Stochastic has turned downward to 79.8 and crossed below its slow stochastic line, indicating a possible end to the recent short term up cycle and the beginning of a down cycle. Readings from the indicators showed that the upward momentum of the FBM KLCI is waning and is likely to further consolidate.

The immediate short term trend of the FBM KLCI has turned down as the key index has closed below the 5 and 10-day SMA. Nevertheless, it is still above the 20 and 30-day SMA, which might lend some support to the index at 1,565 to 1,561-point level. The medium term trend remained sideways while the longer term trend is still up. With the weekend approaching and the Greece’s second election to be held this coming Sunday, the FBM KLCI is likely to remain in a consolidation mode as can be seen from the shrinking total volume over the last few days.

Overnight, the Dow rose +155.53 points or +1.24% to close at 12,651.91. Today, the FBM KLCI is likely to trade within a range of 1,562 to 1,585.

This week's expected range: 1532 – 1603
Today’s expected range: 1562 – 1585

Resistance: 1576, 1580, 1585
Support: 1562, 1566, 1568

Stocks to watch: PENERGY, PERDANA, DIALOG

Thursday, June 14, 2012

FBM KLCI - sign of toppishness


Stocks on Bursa Malaysia closed flat yesterday on the back of a lacklustre market as concerns over weak market fundamentals globally heightened, and made most investors stay on the sidelines while waiting for good news from either United States on possible additional financial stimulus or further move by European economies to help Spain. The FBM KLCI ended at its intra-day low level of 1,576.23 with a marginal gain of 0.16 of a point compared with Tuesday’s close of 1,576.07. Gainers outnumbered losers by 386 to 282 while 334 counters were unchanged. Turnover declined to 677.021 million units worth RM1.216 billion from Tuesday’s closing of 707.438 million shares valued at RM1.073 billion.

The FBM KLCI opened 0.65 of a point higher at 1,576.72 and climbed to the intra-day high of 1,580.55, and was hovering in a sideways range for most part of the day. Selling pressure which emerged towards the end of the day pressed the key index to close at the lowest point of the day. Chart-wise, the FBM KLCI formed a black inverted hammer which indicates buyers were initially strong, but succumbs to selling pressure towards the end. With this price action, the key index is likely to fall further today, and it showed that the resistance at 1,582 is a tough barrier to cross. Immediate downside support is at 1,572 to 1,568

MACD was higher but its histogram turned shorter, indicating a reduction in the upward momentum. RSI (14) was flat at 54.2, indicating the short term relative strength is still in the mildly bullish zone. Stochastic was higher at 87.2, indicating strong market strength, or short term overbought situation, and continuation of the short term up cycle. Readings from the indicators showed some early signs that the FBM KLCI is losing its upward momentum, and might stage a pullback or correction.

The FBM KLCI showed sign of congestion at the current level; however, the short term trend is up as the key index is still above the short term 5 and 10-day SMAs. The medium term trend is sideways while the long term uptrend is still intact. With the total market volume continues to shrink, the local bourse is likely to extend its consolidation. Overnight, the Dow fell -77.42 points or -0.62% to close at 12,496.38. Today, the FBM KLCI is likely to trade within a range of 1,570 to 1,585.

This week's expected range: 1532 – 1603
Today’s expected range: 1570 – 1585

Resistance: 1579, 1582, 1585
Support: 1570, 1573, 1574

Wednesday, June 13, 2012

FBM KLCI - lower on profit-taking correction


Stocks on Bursa Malaysia closed lower across the board yesterday as investors remained cautious on the back of bearish market sentiment globally. The FBM KLCI ended 2.34 points or 0.15% lower at 1,576.07 after moving between 1,572.53 and 1,576.97 throughout the trading session. Losers led gainers by 370 to 271 while 351 counters were unchanged. Turnover eased to 707.438 million shares, valued at RM1.073 billion, from Monday’s 732.912 million shares worth RM1.373 billion.

Taking cue from the weak performance of Wall Street overnight, the FBM KLCI opened 1.5 points lower at 1,576.91 and slipped lower to hit the intra-day low of 1,572.53 at late morning. The key index rebounded in the afternoon session recovering much of its lost ground to close off low. Chart-wise, the FBM KLCI formed a black hammer candlestick which indicates the appearance of buying support for the FBM KLCI, and it is likely to continue its rebound to climb higher today. Immediate overhead resistance zone is at 1,582 to 1,591 while the downside support zone is at 1,572 to 1,568.

MACD continued to move higher after crossing the zero-line yesterday, but its histogram turned slightly shorter reflecting the mild pullback in the key index. RSI (14) was marginally lower at 54.1 from 55.4 previously, reflecting the mild pullback correction but the short term relative strength is still in a mildly bullish state. Stochastic hooked downward slightly to 84.1 from 84.7, indicating the short term up cycle is still intact. Readings from the indicators showed that the FBM KLCI is undergoing a mild pullback correction at the moment but the momentum is still on the positive side, and it is likely to move higher after the correction is over.

The short term trend of the FBM KLCI remained up despite the pullback yesterday as the key index still remained above the short term moving averages as well as above the upper resistance trend line of the downtrend channel. The medium term trend is neutral or sideways as the key index is closing right below the 50 and 60-day SMAs, while the long term uptrend remained intact. The continued low volume in the region of only 700 million shares indicated a lack of interest in the market, hence, the FBM KLCI and the overall market may continues its consolidation mode but with an upward bias as indicated by some bullish signs in the indicators.

Overnight, the Dow rose +162.57 points or +1.31% to close at 12,573.80. Today, the FBM KLCI is likely to trade within a range of 1,568 to 1,582.

This week's expected range: 1532 – 1603
Today’s expected range: 1568 – 1582

Resistance: 1578, 1580, 1582
Support: 1568, 1570, 1573

Tuesday, June 12, 2012

FBM KLCI - gradually turning bullish


Stocks on Bursa Malaysia ended firmer yesterday in line with other regional bourses despite rising concern over the Eurozone financial crisis, as buying support for selected heavyweights kept the FBM KLCI above the 1,570 points level. The FBM KLCI closed 7.79 points or 0.50% higher at 1,578.41 after moving between 1,575.95 and 1,582.29 throughout the trading session. Advancers thumped decliners by 418 to 262 while 320 counters were unchanged. Turnover rose to 732.912 million shares, worth RM1.373 billion, from Friday’s 576.86 million shares worth RM988.39 million.

Taking cue from the strong performance of the Dow last Friday and the Spain bailout news over the weekend, the FBM KLCI opened with an up gap of 5.33 points at 1,575.95 and surged to the intra-day high of 1,582.29 within the first five minutes of trading, and profit-taking activity had kept the benchmark index moving in a sideways range for the rest of the day. Chart-wise, the FBM KLCI formed a white inverted hammer-like candlestick with the close staying just below the mid range of the day, indicating the bears were slightly stronger after a day of battle. The FBM KLCI did try to challenge the resistance at 1,582 but failed to break it, indicating sellers were still strong at level above the 1,580-point and the key index may continues its range-bound consolidation today.

MACD had just crossed the zero-line, flashing a buy signal, and the histogram also turned longer, indicating an improvement in the upward momentum. RSI (14) hooked upward to 55.4 from 51.9, indicating the short term relative strength has moved into the mildly bullish zone. Stochastic was higher at 84.7, indicating an improvement in the market strength and continuation of the short term up cycle, but is short term overbought and a pullback may occur. Readings from the indicators showed that the FBM KLCI is gradually turning bullish, as the MACD has just crossed above the zero-line, and the upward momentum is building up gradually.

The FBM KLCI has just moved above the upper resistance trend line of the downtrend channel and also crossed above the 50 and 60-day SMAs, giving out a bullish indication that the medium term trend of the key index has turned up. However, as it has just breakout, a pullback may occur. The short and long term trend still remained up. Immediate overhead resistance zone is at 1,582 to 1,591 while the immediate downside support zone is at 1,575 to 1,568.

Overnight, the Dow fell -142.97 points or -1.14% to close at 12,411.23. Today, the FBM KLCI is likely to trade within a range of 1,569 to 1,589.

This week's expected range: 1532 – 1603
Today’s expected range: 1569 – 1589

Resistance: 1582, 1586, 1589
Support: 1569, 1572, 1575

Monday, June 11, 2012

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



Stocks on Bursa Malaysia ended lower in narrow trading last Friday with investors taking some profits after recent strong gains. The bourse's weak performance was in line with other Asian stock markets on renewed concerns over the economic situation in the Eurozone and US, and investors were also reluctant to hold positions ahead of the weekend amid lack of market leads as China's unexpected interest rate cut has contributed to the uncertainty over the strength of the world's second largest economy. The FBM KLCI lost 4.69 points or 0.30% to 1,570.62 after hovering between 1,568.89 and 1,576.52, and week-on-week it lost 2.97 points from previous Friday’s 1,573.59. Market breadth was negative with decliners leading advancers by 376 to 288 while 327 counters were flat. Turnover fell to 576.86 million shares worth RM988.39 million from the 779.75 million shares worth RM1.45 billion on Thursday, and weekly volume fell to 3.37 billion shares valued at RM5.64 billion from 4.3 billion shares worth RM7.03 billion registered the previous week.

Taking cue from the hefty fall of 275 points on the Dow the previous Friday, the FBM KLCI opened last Monday with a down gap of 7.4 points at 1,566.19 and continued sliding lower on heavy selling pressure to hit the intra-week low of 1,554.65 before ending 18.41 points lower at 1,555.18. The benchmark index rebounded on Tuesday in tandem with regional markets to closed 5.18 points higher at 1,560.36 after hovering between 1,554.51 and 1,563.33. Continued buying interest on Wednesday pushed the FBM KLCI 9.07 points higher to close at 1,569.43. Buoyed by positive economic developments in Europe and the United States, the FBM KLCI rose 5.88 points to 1,575.31 on Thursday after hitting the intra-week high of 1,578.76, while Friday’s saw profit-taking activity sets in and the FBM KLCI 4.69 points to end the week at 1,570.62.

On the weekly chart, the FBM KLCI formed a white spinning-top candlestick in Harami position which indicates indecision of the market direction but with an upward bias. It was closing below the 10-week SMA but was above the 5-week SMA, indicating a range-bound situation with immediate overhead resistance zone at 1,578 to 1,582 and the downside support zone at 1,554 to 1,544. On the daily chart, the FBM KLCI formed a bearish black candlestick which actually confirmed the top reversal signal issued by the spinning-top candlestick formed on Thursday, and the key index also closed the gap which indicates exhaustion of the three days up move last week. Hence, the FBM KLCI is likely to continue to consolidate or remained range-bound.

Weekly MACD was marginally lower but its histogram was shorter upward, indicating a slow down in the weekly downward momentum. On the contrary, daily MACD continued to climb higher, but its histogram was slightly shorter, indicating a state of consolidation. Weekly RSI (14) hooked down marginally to 54.1 from 58.4, reflecting the mild pullback in the key index, and the weekly relative strength is still in the mildly bullish zone. Daily RSI (14) also made a pullback to 51.9 from 54.3, indicating the daily relative strength of the FBM KLCI is in a neutral state with a slight bullish bias. Weekly Stochastic has hooked upward to 46.5 and crossed over the weekly slow stochastic line, issuing a buy signal and indicating a possible end of the recent down cycle. The daily Stochastic was higher at 79.8, indicating a continuation of the short term up cycle and strengthening of the benchmark index. Mixed signals from the indicators showed that the FBM KLCI is in a consolidation state but with an upward bias.

The broad trend of the FBM KLCI remained down as the key index is still trapped within the downtrend channel. However, despite the pullback on last Friday, the short term trend is up as the key index is now closing above the short term 5, 10, 20 and 30-day SMAs. The medium term trend remained sideways as the FBM KLCI is still below the medium term 50 and 60-day SMAs but above the longer term moving averages. In order to re-gain its bullish uptrend and breakout from the current sideways range-bound situation, the FBM KLCI will have to break through the immediate resistance zone of 1,578 to 1,582 follow by the next resistance level at 1,591. On the flip side, if the FBM KLCI breaks below its immediate critical support of 1,554, the bearish downtrend will continue.

Last Friday, the Dow rose +93.24 points or +0.75% to close at 12,554.20. This week, the FBM KLCI is likely to trade within a range of 1,532 to 1,603, and for today, it is likely to trade within a range of 1,559 to 1,585.

This week's expected range: 1532 – 1603
Today’s expected range: 1559 – 1585

Resistance: 1576, 1580, 1585
Support: 1559, 1564, 1567

Stocks to watch: GASMSIA, DIALOG, MPHB

Friday, June 8, 2012

FBM KLCI - sign of uncertainty


Stocks on Bursa Malaysia ended on a higher note yesterday on sustained buying interest with investor sentiment buoyed by positive economic developments in Europe and the United States. The local bourse was also tracking the bullish performance of other Asian stock markets while taking cue from the strong showing by Wall Street and European markets. However, some profit taking was seen in the afternoon session, paring down gains made in the morning. The FBM KLCI rose 5.88 points or 0.37% to 1,575.31 after hovering between 1,572.32 and 1,578.76. Advancers led decliners by 411 to 277 while 347 counters were unchanged. Turnover rose to 779.75 million shares worth RM1.45 billion from the 699.96 million shares worth RM1.14 billion on Wednesday.

Taking cue from the strong performance of the Dow overnight, the FBM KLCI opened with an up gap of 5.45 points at 1,574.88 and surged to the intra-day high of 1,578.76 within the first five minutes of trading. Profit-taking activity pressed the key index lower to hit the intra-day low of 1,572.32 before rebounding to close off low. The benchmark index was trading in the positive zone throughout the day. Chart-wise, the FBM KLCI formed a white spinning-top candlestick which indicates the market was undecided about moving forward after two days of strong rebound. With the appearance of a spinning-top yesterday, the FBM KLCI is likely to take a breather to consolidate or correct itself today. Immediate overhead resistance zone is at 1,578 to 1,582 while the downside support is at 1,572.

MACD and its histogram were higher, indicating a continued improvement in the upward momentum. RSI (14) was higher at 54.3 from 51.7 previously, indicating an improvement in the short term relative strength; nevertheless, it is still in the mildly bullish zone. Stochastic was higher at 74.5 and has crossed above the slow stochastic line, indicating a change in the short term cycle from down to up. Readings from the indicators showed that the FBM KLCI is gradually turning mildly bullish, however, MACD is still below the zero-line, and a cross of the MACD over the zero line is required to confirm the return of the bulls.

The general trend of the FBM KLCI remained down as the key index is still trapped within the downtrend channel. However, the short term trend is up as the key index has now close above the short term 5, 10, 20 and 30-day SMAs. The medium term trend is sideways as the 50 and 60-day SMAs was flat while the long term trend remained up. Overall volume remained weak, and the market is likely to stay range-bound until a clear breakout of the overhead resistance at 1,582 is seen.

Overnight, the Dow rose +46.17 points or +0.37% to close at 12,460.96. Today, the FBM KLCI is likely to trade within a range of 1,565 to 1,586.

This week's expected range: 1514 – 1620
Today’s expected range: 1565 – 1586

Resistance: 1579, 1582, 1586
Support: 1565, 1569, 1572

Thursday, June 7, 2012

FBM KLCI - higher on continued buying interest


Stocks on Bursa Malaysia ended in positive territory yesterday on continued buying interest, particularly in finance and plantation counters. Market sentiment was generally lifted by positive leads from regional markets as the overnight positive close on Wall Street amid some upbeat economic data from the United States is contributing to the firm trend in the region. The FBM KLCI rose 9.07 points or 0.58% to close at 1,569.43 after hovering between 1,563.62 and 1,572.30. Advancers led decliners by 397 to 305 while 343 counters were unchanged. Turnover rose to 699.96 million shares worth RM1.14 billion from the 637.97 million shares worth RM923.14 million on Tuesday.

The FBM KLCI opened with an upside gap of 3.29 points at 1,563.65 and moved higher gradually for the day to touch the intra-day high of 1,572.30 just before the closing phase, but last minute profit-taking activity sent the key index lower to close off high. Chart-wise, the FBM KLCI formed a bullish white candlestick with a breakaway gap which indicates buyers were rushing in to the market to bargain hunt after the recent steep fall. With the strong up move yesterday, the FBM KLCI broke through the 1,566-point resistance level and has closed up the down gap which formed on 4th June 2012, and it is likely to move higher today to test the immediate resistance zone at 1,577 to 1,582. 1,577-point is an important resistance level to watch as this is also where the medium term 50 and 60-day SMA lies now. If the FBM KLCI is able to break through this resistance zone, it is likely that it will move to a higher level.

MACD has reversed up and its histogram was higher than the previous histogram, indicating a pickup in the momentum to the upside. Nevertheless, MACD is still below the zero-line which means it is still generally bearish, but a close of the key index above the 1,582-point level will see the MACD crossing the zero-line and turn bullish. RSI (14) was higher at 51.7 from 47.4 previously, indicating the short term relative strength has moved into the neutral but mildly bullish zone. Stochastic was slightly lower at 63.2 from 65.7 previously and was tapering off, indicating a slow down in the downward momentum but the short term down cycle still remained. Mixed readings from the indicators showed that the FBM KLCI is in a transition stage but with an upward bias.

The general short term trend of the FBM KLCI remained down as the key index is still trapped within the downtrend channel. However, the index has now close above he short term 5, 10, 20 and 30-day SMAs, and is poised to move higher. Immediate strong overhead resistance is expected at the 1,577-point level as this is where the 50 and 60-day SMAs meet the upper resistance line of the downtrend channel, and a break above this level is likely to trigger a rally. A confirmed trend change will occur if the FBM KLCI is able to close above the 1,591-point level.

Overnight, the Dow rose +286.84 points or +2.37% to close at 12,414.79. Today, the FBM KLCI is likely to trade within a range of 1,555 to 1,581.

This week's expected range: 1514 – 1620
Today’s expected range: 1555 – 1581

Resistance: 1574, 1577, 1581
Support: 1555, 1559, 1564

Stocks to watch: DIALOG, JCY, YINSON, TOPGLOV, SUPERMX, WINGTM, MBL

Wednesday, June 6, 2012

FBM KLCI - higher in line with regional rebound


Stocks on Bursa Malaysia staged a rebound on bargain hunting yesterday after recent losses and in tandem with other regional markets, as investors are on short-covering ahead of the Group of Seven (G7) talks on the Eurozone debt crisis, although investor sentiment remained weak, on persistent worries over the global economic health. The FBM KLCI closed 5.18 points or 0.33% higher at 1,560.36 after hovering between 1,554.51 and 1,563.33. Market breadth was positive with advancers leading decliners by 411 to 275 while 309 counters were unchanged. Turnover fell to 637.97 million shares worth RM923.14 million from the 677.63 billion shares worth RM1.144 billion on Monday.

The FBM KLCI opened 0.07 of a point higher at 1,555.25 but slipped to the intra-day low of 1,554.51 within the first five minutes after opening. The key index then rebounded and staged a rally to hit the intra-day high of 1,563.33 before pulling back on profit-taking to close off high at 1,560.36. Chart-wise, the FBM KLCI formed a bullish white piercing-line candlestick pattern which indicates fight back by the bulls after being beaten down a day earlier. As the key index was able to close at the mid point of the previous day’s candlestick, it is likely that the rebound might see a follow through today, and the immediate overhead resistance zone is at 1,563 to 1,566.

MACD hooked upward gently, but its histogram continued to get shorter, indicating a weak rebound. RSI (14) hooked up to 47.4 from 44.8, indicating the short term relative strength has improved slightly but still in the mildly bearish state. Stochastic, however, continued to slide lower to 65.7, indicating a continuation of the short term down cycle. Readings from the indicators showed that the FBM KLCI was undergoing a technical rebound, and whether the rebound is able to reverse the downtrend will require more data to confirm.

The short and medium term trend of the FBM KLCI is currently down as the key index continues to stay below the short and medium term moving averages. Nevertheless, the longer term trend is still up. Readings from the various technical indicators shows that the FBM KLCI is likely to stay sideways range-bound until clear sign of breakout, either up or down, is observed. In order to reverse the current downtrend, the FBM KLCI must move out of the downtrend channel and close above the immediate strong overhead resistance zone of 1,566 to 1,582, the downside support zone is at 1,554 to 1,544.

Overnight, the Dow rebounded with a gain of +26.49 points or +0.22% to close at 12,127.95. Today, the FBM KLCI is likely to trade within a range of 1,546 to 1,573.

This week's expected range: 1514 – 1620
Today’s expected range: 1546 – 1573

Resistance: 1565, 1569, 1573
Support: 1546, 1550, 1555

Stocks to watch: DIALOG, PERMAJU, IJACOBS, SCOMIMR, MPHB, ASAS

Tuesday, June 5, 2012

FBM KLCI - Down on bearish market sentiment


Stocks on Bursa Malaysia ended in negative territory yesterday, influenced by weaker investor sentiment in regional markets after data from the US and China added to evidence of a global economic slowdown. The FBM KLCI fell 18.41 points or 1.17% lower to close at 1,555.18 after hovering between 1,554.65 and 1,566.19. Losers led gainers by 674 to 114 while 194 counters were unchanged. Turnover rose to 677.63 million shares worth RM1.144 billion from 654.35 billion shares worth RM1 billion on last Friday.

Taking cue from the hefty fall of 275 points on the Dow last Friday, the FBM KLCI opened with a down gap of 7.4 points at 1,566.19 and continued sliding lower on selling pressure for the rest of the day with weak intermittent rebound. It hit the intra-day low of 1,554.65 before rebounding slightly to close off low. Chart-wise, the FBM KLCI formed a bearish long black candlestick which indicates sellers were selling down stocks on great fear, and the bearish sentiment is likely to send the benchmark index lower until a bottom reversal signal is seen. This bearish candlestick formation also served to confirm the bearish reversal signal generated by the Doji in Harami position formed last Friday.

MACD has hooked downward and its histogram also turned shorter, indicating a reversal of the momentum direction from up to down, indicating an end of the technical rebound rally which started on the 21st May 2012. RSI (14) plunged lower to 44.8 from 53.5, indicating a return of the short term relative strength from mildly bullish to the mildly bearish state. Stochastic has also hooked downward to 76.8 from previous reading of 84.8, indicating a possible end of the recent short term up cycle. Readings from the indicators showed that the FBM KLCI is experiencing a strong pullback after the recent rally, and the strong downward momentum may send the benchmark index lower.

With the bearish down move yesterday, the FBM KLCI has fallen back to the downtrend channel as well as closing below the short term moving averages, indicating a short term trend reversal from up to down. The medium term trend remained sideways while the long term trend is still up and maybe subjected to challenge soon. Immediate downside support zone is at 1,550 to 1,538 with 1,550 being the psychological support level. A further break of this support zone will likely see the FBM KLCI sliding lower to re-test the pivot low of 1,526.60 formed on 18th May 2012.

Overnight, the Dow fell a marginal -17.11 points or -0.14% to close at 12,101.46. Today, the FBM KLCI is likely to trade within a range of 1,539 to 1,578.

This week's expected range: 1514 – 1620
Today’s expected range: 1539 – 1578

Resistance: 1563, 1571, 1578
Support: 1539, 1547, 1551

Stocks to watch: KLCCP, IJACOBS, SCOMIMR

Monday, June 4, 2012

FBM KLCI - likely to pullback on profit-taking corrections



Stocks on Bursa Malaysia ended lower last Friday, in line with the weaker regional investor sentiment on concern over Europe and the soft economic data from the US. Losses in plantation and banking stocks pushed the FBM KLCI to close 7.08 points, or 0.45%, lower at 1,573.59, and week-on-week, the benchmark index added 22.47 points or 1.45% from previous Friday’s close of 1,551.12. Losers led gainers by 363 to 303 while 310 counters were unchanged. Daily turnover rose to 654.35 million shares worth RM1 billion from 1.24 billion shares worth RM1 billion on Thursday. Weekly volume fell to 4.3 billion shares, valued at RM7.03 billion, from previous week’s 4.35 billion shares, worth RM6.14 billion.

The FBM KLCI was basically in an uptrend last week with four days of gains and only one day of losses. It opened on last Monday with a down gap of 5.7 points at 1,545.42 and slipped to the intra-week low of 1,544.63, it then rebounded and moved higher to close in the positive territory with a 3.82 points gain at 1,554.94. On Tuesday, The FBM KLCI opened 0.94 point lower at 1,554.00 and slipped to the intra-day low of 1,552.34 before rebounding to close 10.38 points, or 0.67%, higher at 1,565.32. Taking cue from the strong performance of the Dow overnight, the FBM KLCI opened Wednesday with an up gap of 2.89 points at 1,568.21 and ended the day higher with 9.85 points or 0.63% gains at 1,575.17. On Thursday, the FBM KLCI took cue from the weak performance of Wall Street overnight to open 3.39 points lower at 1,571.18 and slipped to the intra-day low of 1,569.99, losing 5.18 points at its worst before rebounding to close 5.5 points higher at 1,580.67, and Friday saw a pulled back of the FBM KLCI to close 7.08 points lower at 1,573.59.

On the weekly chart, the FBM KLCI formed a bullish white candlestick with a short upper shadow which indicates the bulls were very much in control for last week. It recovered most of the losses suffered two weeks ago and tested the intra-week high of 1,582.03, and it might continue its upward move this week with overhead resistance zone at 1,582 to 1,609. On the daily chart, the FBM KLCI formed a Doji candlestick in Harami position which indicates uncertainty in the market direction after four days of consecutive up move. The appearance of a Doji in Harami position after an uptrend may forewarn of an impending reversal and the key index may further pullback to correct itself.

Weekly MACD continued sliding lower; however, its histogram was shorter upward, indicating a slight reduction in the weekly downward momentum. Daily MACD continued to climb higher but the histogram was just marginally higher, indicating a reduction in the upward momentum. Weekly RSI (14) was higher at 54.8 compared with 50.2 previously, indicating the weekly relative strength was back to the mildly bullish zone. However, daily RSI (14) pulled back to 53.5 from 57.5, reflecting the pulled back in the key index, and the daily short term relative strength is still in the mildly bullish zone. Weekly Stochastic was flat at 31.1, indicating a pause in the weekly down cycle, but not yet enough to indicate a reversal. However, the daily Stochastic was higher at 84.8, entering the short term overbought zone and a pullback correction is likely ahead. Readings from the weekly indicators showed that the FBM KLCI is still in a correction mode from the weekly perspective, while signals from the daily indicators showed a short term mildly bullish mode, but signs are surfacing that the upward momentum is waning and a pullback is likely.

The short term trend of the FBM KLCI has turned up as it is now closing above the short term moving averages, while the medium term trend is still sideways with a downward bias as the two medium terms 50 and 60-day SMA remained flat and the key index is closing below them. The long term uptrend is still intact but may be subjected to challenge soon. With the overbought signal on the daily Stochastics caused by local fund support of the blue-chips despite weak buying support on the broader market, blue-chip stocks are likely to suffer from profit-taking corrections this week. The divergence of the FBM KLCI against global markets which are much weaker last week, and the more than two percentages tumble on US stocks last Friday triggered by weaker jobs data and worsening European debt crisis would further dampen local sentiment on contagion fears.

Last Friday, the Dow fell -274.88 points or -2.22% to close at 12,118.57. This week, the FBM KLCI is likely to trade within a range of 1,514 to 1,620, and for today, it is likely to trade within a range of 1,565 to 1,583

This week's expected range: 1514 – 1620
Today’s expected range: 1565 – 1583

Resistance: 1577, 1580, 1583
Support: 1565, 1568, 1570