FBM KLCI - signs of toppishness

Stocks on Bursa Malaysia closed broadly lower yesterday in line with weak regional markets, as regional and international equity markets were discouraged by China's revised economic growth forecast to 7.5 percent against an earlier projection of eight percent. The FBM KLCI recouped earlier losses to close 0.69 of a point or 0.04% higher at 1,589.91 aided by selected buying of blue-chips. Decliners led advancers by 519 to 257 while 315 counters closed unchanged. Total volume reduced to 1.288 billion shares, valued at RM1.792 billion, from 1.448 billion shares, valued at RM1.760 billion, transacted on Monday.

The FBM KLCI opened 0.12 of a point lower at 1,589.10 and slipped to the intra-day low of 1,580.51 at mid day. The key index recovered its losses gradually in the afternoon session and a last minute buying of selected blue-chips helped to push the market barometer to close at the day’s high. Chart-wise, the FBM KLCI formed a white hanging-man candlestick, a top reversal candle pattern which indicates the bears were initially dominant in push the key index lower but the bulls later surfaced to lift up the index. With the appearance of two key reversal candlestick patterns, i.e. a shooting-star and a hangman at this high level, it indicated that selling pressure has emerged and hence the FBM KLCI is likely to pullback and correct itself after a four-day rally.

MACD continued to move higher, indicating the upward momentum is still intact. RSI (14) was higher at 74.2, but is tapering off, indicating a marginal increase in the short term relative strength, and the key index was at the overbought level for the short term. Stochastic was flat at 89.4, indicating the upward move was taking a pause. Readings from the indicators showed that the FBM KLCI is short term overbought and is making a pause, and might correct itself.

The trend of the FBM KLCI remained up and bullish. However, with the appearance of two key reversal candlestick patterns at this high level, the key index is likely to move lower to correct itself after the recent strong up move. Immediate overhead resistance zone is at 1,595 to 1,600 while the immediate downside support zone is at 1,580 to 1,567. The overall market is likely to go into a consolidation phase as can be seen from the shrinking volume. Nevertheless, this might present a buying opportunity for quality stocks as the FBM KLCI is likely to continue its uptrend after the correction.

Overnight, the Dow fell -203.66 points or -1.57% to close at 12,759.15. Today, the FBM KLCI is likely to trade within a range of 1,574 to 1,600.

This week's expected range: 1527 – 1622
Today’s expected range: 1574 – 1600

Resistance: 1594, 1597, 1600
Support: 1574, 1577, 1583

FBM KLCI - appearance of shooting-star candle pattern

Stocks on Bursa Malaysia closed higher yesterday on gains in selected blue-chips. Although the market failed to make a breakthrough yesterday the momentum has been set for it to further move up and try breaks the resistance in the near term. The FBM KLCI rose 5.44 points or 0.34% to close at 1,589.22 after hitting the intra-day high of 1,594.72. Advancers led decliners by 391 to 325 while 414 counters were unchanged. Total volume declined to 1.448 billion shares valued at RM1.760 billion from 1.630 billion shares valued at RM1.934 billion last Friday.

The FBM KLCI opened 2.87 points higher at 1,586.65 and continued moving higher to touch the intra-day high of 1,594.72 at mid morning. Profit-taking activity sets in and sent the key index lower for the rest of the day to close off high. Chart-wise, the FBM KLCI formed a white shooting-star candlestick which indicates the bulls were initially dominant but later the bears surfaced to press down the key index. A shooting-star candlestick is a potential top reversal candle formation, and hence, the FBM KLCI is likely to pullback on profit-taking.

MACD continued to climb higher after making the golden-cross, indicating a good follow through buying momentum which pushed the key index higher. RSI (14) was higher at 73.9, indicating a very bullish short term relative strength; however, as it has gone into the short term overbought zone, a pullback on profit-taking is likely to happen. Stochastic was higher at 89.4, indicating very strong market strength and continuation of the up cycle, but is has showed sign of tapering off, hence the up move may take a pause. Readings from the indicators showed that the FBM KLCI is currently in a very bullish state, but is short term overbought, hence might pullback to correct itself.

The trend of the FBM KLCI is up and bullish, and it is likely to test the all-time-high level of 1,597.08 in the near term. As there are already signs of toppishness, the key index may pullback first before scaling new high. Immediate overhead resistance zone is envisaged at 1,597 to 1,600 while the downside support zone is at 1,586 to 1,577. With total volume continued to shrink, the overall market is likely to go into consolidation mode but the focus on index-linked counters will stay.

Overnight, the Dow fell -14.76 points or -0.11% to close at 12,962.81. Today, the FBM KLCI is likely to trade within a range of 1,576 to 1,604.

This week's expected range: 1527 – 1622
Today’s expected range: 1576 – 1604

Resistance: 1594, 1599, 1604
Support: 1576, 1581, 1585

FBM KLCI - likely to test all-time historical high

Stocks on Bursa Malaysia closed sharply higher last Friday, prompted by firmer regional markets. The benchmark FBM KLCI rose by 10.33 points or 0.66% to close at 1,583.78, and on a weekly basis, it gained 25.01 points from the previous Friday’s close of 1,558.77. Advancers led losers by 540 to 276 while 330 counters were unchanged. Turnover rose to 1.63 billion shares worth RM1.93 billion from 1.62 billion shares worth RM2.02 billion on Thursday. Weekly volume decreased to 8.560 billion shares worth RM9.87 billion from 9.635 billion shares worth RM9.345 billion the previous week.

The FBM KLCI opened 1.86 points higher at 1,560.63 on last Monday but ended the day only 0.27 of a point higher to close at 1,559.04 with profit-taking activities seen in selected blue-chip counters. Investor sentiment was dampened following an increase in oil prices and the absence of a new catalyst for markets regionally. The FBM KLCI ended 2.31 points lower at 1,556.73 on Tuesday on continued profit-taking activity after hitting intra-week low of 1,552.62. On Wednesday, the market rebounded from Tuesday’s losses amid advances in regional bourses as financing from the European Central Bank to avert a credit crunch in the Euro zone bolstered investors’ confidence, and the key index gained 12.92 points to 1,569.65. The FBM KLCI rose by 3.80 points to close at 1,573.45 on Thursday amid a mixed market. On Friday, the benchmark continued its climb to touch the intra-week high of 1,587.11 before pulling back on profit taking to close the week at 1,583.78.

On the weekly chart, the FBM KLCI formed a bullish white candlestick which staged a breakout from the consolidation. With this bullish breakout, the benchmark index is likely to move higher to re-test the historical high of 1,597.08 registered on July 11th, 2011 with an immediate target of 1,600-point. A successful breakthrough of the 1,600-point level may even see the FBM KLCI moving higher with a possible target level of 1,675. On the daily chart, the FBM KLCI formed a bullish white candlestick, with a three-white-soldiers candle pattern formation, which indicates a very bullish upward move. The breakthrough of the 1,577 resistance level with strong conviction indicates the benchmark index is likely to move higher to re-test the historical high level of 1,597.08 sometimes this week.

Weekly MACD continued to move higher with its histogram also turning longer, indicating the weekly momentum has again pick up after two weeks of consolidation. Daily MACD also continued its up move after hooking up two sessions ago and has just made a golden-cross, issuing a bullish buy signal. Weekly RSI (14) was higher at 65.6 from 61.7 a week ago, indicating the weekly relative strength is turning more bullish. Daily RSI (14) surged higher to 72 from 67.9, and has entered the very bullish zone. It is short term overbought, and some profit-taking maybe expected ahead. Weekly Stochastic was at 95.2, indicating a very strong weekly market strength, and daily stochastic was higher at 88.5, indicating a continuation of the daily up cycle and a strong daily market strength. Readings from the weekly and daily indicators showed that the FBM KLCI is currently is a very bullish state, and its bullish momentum is likely to carry it to a higher level with some profit-taking along the way.

The trend of the FBM KLCI remained up and is bullish. Immediate overhead resistance zone is envisaged at 1,597 to 1,600 while the downside support zone is at 1,577 to 1,567. From the fundamental side, a better global sentiment, strong US jobs data, positive China manufacturing data and better credit market in the Eurozone will provide an upside momentum to share prices on Bursa Malaysia.

Last Friday, the Dow fell a marginal -2.73 points or -0.02% to close at 12,977.57. This week, the FBM KLCI is likely to trade within a range of 1,527 to 1,622, and for today, it is likely to trade within a range of 1,549 to 1,566.

This week's expected range: 1527 – 1622
Today’s expected range: 1564 – 1600

Resistance: 1589, 1595, 1600
Support: 1564, 1569, 1576

FBM KLCI - higher amid mixed market

Stocks on Bursa Malaysia closed on a mixed note yesterday in cautious trading in line with regional markets, weighed by a higher yen and weak China’s manufacturing data. News that Federal Reserve chairman Ben Bernanke had no plans to further ease monetary policy to stimulate the US economy also dampened sentiment. The FBM KLCI rose by 3.80 points or 0.24% to close at 1,573.45, helped by gains in heavyweights. Losers led gainers by 506 to 309 while 302 counters were unchanged. Turnover fell to 1.62 billion shares worth RM2.02 billion from Wednesday’s 1.94 billion shares worth RM2.69 billion.

The FBM KLCI opened 0.76 of a point lower at 1,568.89 and rebounded to climb higher after briefly touching the intra-day low of 1,568.83. It hit the intra-day high of 1,576.23 near noon before pulling back on profit-taking in the afternoon to close off high. On the daily chart, the FBM KLCI formed a bullish white candlestick which indicates the bulls are still in control and continuation of the uptrend after the strong breakout a day earlier. The FBM KLCI is likely to move higher today, and immediate overhead resistance is at 1,577-point level. If the key index is able to break through this resistance level then it will move towards its next target which is the all time high level of 1,597.08.

MACD continued its rebound to climb high and so is the histogram, indicating continued improvement in the key index’s momentum. Nevertheless, MACD is still below the signal-line. RSI (14) was higher at 67.9, indicating the short term relative strength of the key index is getting more bullish. Stochastic hooked up to 75.5 and has crossed above the slow stochastic line, indicating the short term corrective cycle is over and a new up cycle is in the making. Readings from the indicators showed that the FBM KLCI’s momentum is picking up and is likely to send it to a higher level.

The short term trend of the FBM KLCI has again turned up as the 5-day SMA has crossed above the 10-day SMA, and overall, the key index is still on a steady uptrend. Immediate overhead resistance zone is at 1,577 to 1,582 while the downside support zone is at 1,567 to 1,553. The index-linked heavyweights are likely to continue their uptrend with potential profit-taking ahead of the weekend, and the second and third liners are likely to continue their correction and consolidation.

Overnight, the Dow rebounded +28.23 points or +0.22% to close at 12,980.30. Today, the FBM KLCI is likely to trade within a range of 1,562 to 1,584.

This week's expected range: 1541 – 1577
Today’s expected range: 1562 – 1584

Resistance: 1577, 1581, 1584
Support: 1562, 1565, 1569

FBM KLCI - a bullish breakout

Stocks on Bursa Malaysia closed sharply higher yesterday with the benchmark FBM KLCI surging 12.92 points to 1,569.65, the highest level since July 18 last year. The market rebounded from Tuesday’s losses amid advances in regional bourses as financing from the European Central Bank to avert a credit crunch in the Euro zone bolstered investors’ confidence. Gainers led losers by 535 to 297 while 300 counters were unchanged. Turnover was higher at 1.94 billion shares worth RM2.69 billion from 1.7 billion shares worth RM1.6 billion on Tuesday.

Taking cue from the strong performance of Wall Street overnight, the FBM KLCI opened 0.77 point higher at 1,557.50 and continued to climb higher throughout the day to touch the intra-day high of 1,573.75 before last minute profit-taking pressed the key index to close off high. Chart-wise, the FBM KLCI formed a bullish white candlestick which broke above the resistance level of 1,567-point, and is likely to continue climbing higher today. With this strong breakout, the key index is likely to move higher to test the next target level of 1,577-point follow by the all time high level of 1,597.08.

MACD has hooked upward and the histogram also turned shorter upward, indicating an initial turn in the momentum direction from down to up. RSI (14) has hooked upward sharply to 66.3, indicating a strong increase in the key index’s short term relative strength, which has again back to the bullish zone. Stochastic was slightly lower at 67.3, and starts to taper, indicating a slow down in the downward market strength. Readings from the indicators showed that the FBM KLCI is regaining its upward momentum which may push it to a higher level.

The short term trend of the FBM KLCI has again turn up after two week’s of sideways consolidation, while the medium and longer term uptrend still remained intact. With the bullish breakout yesterday, the benchmark index is likely to move higher to another level with the short term target set at the all time high level of 1,597.08. With the volume again pick up, the broad market will remain active and buoyant.

Overnight, the Dow fell -53.05 points or -0.41% to close at 12,952.07. Today, the FBM KLCI is likely to trade within a range of 1,543 to 1,590.

This week's expected range: 1541 – 1577
Today’s expected range: 1543 – 1590

Resistance: 1577, 1584, 1590
Support: 1543, 1550, 1560

Stocks to watch: GHLSYS, N2N, WELLCAL, CYPARK, JCY

FBM KLCI - lower on continued consolidation

Stocks on Bursa Malaysia closed mostly lower yesterday, weighed by losses in heavyweights, with sentiment remaining cautious over high oil prices, and questions remained as to whether the European Central Bank’s second liquidity injection could resolve the Eurozone debt crisis. The FBM KLCI ended 2.31 points lower at 1,556.73, after opening 3.09 points higher at 1,562.13. Losers led gainers by 511 to 309 while 309 counters were unchanged. Turnover was higher at 1.727 billion shares worth RM1.588 billion, from 1.642 billion shares, worth RM1.633 billion transacted on Monday.

The FBM KLCI opened 3.09 higher at 1,562.13 and slid lower throughout the day and hit the intra-day low of 1,552.62 at late afternoon before rebounding to close off low. Chart-wise, the FBM KLCI formed a bearish black candlestick with long lower shadow which is a confirmation to the top reversal signal produced by the black inverted hammer candlestick formed on Monday. This indicated that the market was under selling pressure, but there are buying supports when it comes down to the support level. Nevertheless, the FBM KLCI is still trapped in the consolidation range and formed a rectangle shape chart pattern.

MACD was lower, indicating a continued loss in the market momentum. Nonetheless, as it is still above the zero-line, the current weakness is viewed as just a correction in a bull market. RSI (14) slid lower to 59.6, indicating a continued loss in the short term relative strength of the key index, and has now moved into the mildly bullish zone from the bullish zone previously. Stochastic slid lower to 69.1, also indicated that the key index is losing its strength and the short term down cycle is in continuation. Readings from the indicators showed that the FBM KLCI is losing its momentum and is poised to further consolidate. Nevertheless, it has not turn bearish yet.

The short term trend of the FBM KLCI remained sideways while the medium and longer term trend is still up. Immediate over resistance zone is at 1,567 to 1,577 while the immediate downside support zone is at 1,553 to 1,540, with 1,549 being the critical support level. A break below the 1,549-point level will likely see the FBM KLCI sliding lower to the 1,540 and 1,530 zone. The volume registered reflected the consolidation mode of the index-link counters but the penny stocks were still in active rotational play.

Overnight, the Dow rose +23.61 points or +0.18% to close at 13,005.12, the first time since financial crisis. Today, the FBM KLCI is likely to trade within a range of 1,542 to 1,573.

This week's expected range: 1541 – 1577
Today’s expected range: 1542 – 1573

Resistance: 1562, 1567, 1573
Support: 1542, 1547, 1552

Stocks to watch: ZELAN, HSL, KIANJOO

FBM KLCI - marginally higher on mixed market

Stocks on Bursa Malaysia ended mixed yesterday, with profit-taking activities seen in selected blue-chip counters. Investor sentiment was dampened following an increase in oil prices and the absence of a new catalyst for markets regionally, which turned in unimpressive performances. The FBM KLCI rose slightly by 0.27 of a point or 0.017% to close at 1,559.04 after opening 1.86 points higher at 1,560.63. Losers led gainers by 455 to 327 while 341 counters were unchanged. Total turnover declined to 1.642 billion shares worth RM1.633 from the 1.695 billion shares worth RM1.941 billion last Friday.

The FBM KLCI opened 1.86 points higher at 1,560.63 and surged to the intra-day high of 1,565.87 within the first fifteen minutes after market opened, and profit-taking activity which followed sent the key index lower for the rest of the day to hit the intra-day low of 1,558.29 before rebounding slightly to close off low. Chart-wise, the FBM KLCI formed a black inverted hammer candlestick which indicates buyers were initially dominant in pushing up the key index but was later succumb to heavy selling pressure. A black inverted hammer candlestick which appeared near the top of an uptrend indicates toppishness and may forewarn of a possible trend reversal.

MACD continued to slide lower, indicating a continued loss in momentum. RSI (14) was just marginally higher at 61.6, indicating the short term relative strength is still at the borderline of the bullish zone. Stochastic slid lower to 75.8, indicating the continued loss in market strength and the beginning of a short term down cycle. Readings from the indicators showed that the FBM KLCI is in a consolidation mode but is still in the bullish territory.

The short term trend of the FBM KLCI is currently sideways, while the medium and longer term trend remained up. The key index is currently trapped within the consolidation range with a boundary of 1,567 and 1,549, and a breakout in either one direction will likely see the key index continue moving in that direction. With the overall volume continued to shrink, the consolidation process is likely to extend. However, rotational play on the lower liners may continue to dominate the active scene.

Overnight, the Dow fell a marginal -1.44 points or -0.01%to close at 12,981.51. Today, the FBM KLCI is likely to trade within a range of 1,548 to 1,574.

This week's expected range: 1541 – 1577
Today’s expected range: 1548 – 1574

Resistance: 1564, 1569, 1574
Support: 1548, 1553, 1556