KLCI - consolidation with downward bias

The long awaited debut of the country’s largest mobile operator, MAXIS Berhad fails to lift sentiments of the overall market yesterday. The general market was very much in a consolidation mood, with the FBM KLCI drifting in a narrow range in and out of the positive territory. Last minute buying of some key heavyweights lifted the benchmark index to close at 1276.65, gaining 1.55 points or 0.12%. Losers outnumbered gainers by 457 to 238 while 245 counters were unchanged. Turnover increased significantly to 1.3516 billion shares with MAXIS alone accounting for almost 23% of the total volume.

Chart wise, the FBM KLCI formed a small body white candlestick which indicates consolidation. MACD continue to slide down gradually indicating a reduction in momentum. RSI was almost flat, while Stochastic at 79.6 has just come below the bullish 80 level; a slight weakness today may see it coming down further. Nonetheless, the underlying uptrend as indicated by the moving averages is still intact.

Today, the FBM KLCI is expected to trade within the range of 1268 to 1282, immediate support for the KLCI is at 1270.

This week's expected range: 1250 – 1299
Today's expected range: 1268 – 1282

Resistance: 1278, 1280, 1282
Support: 1268, 1270, 1273

Just a profit-taking

Ahead of the debut of the largest mobile operator in Malaysia, MAXIS Berhad today, shares on Bursa Malaysia closed lower on Wednesday as players cash in on earlier gains to buy into MAXIS shares today. FBM KLCI opened with a gap down on Wednesday, continuing the weakness from Tuesday. The benchmark index was trading in the negative territory for most part of the day, and closed almost near the day’s low at 1275.10, down 4.85 points or -0.38%. Market breadth was mixed for much of the day, but ended slightly positive with gainers outpaced losers by 347 to 295, while 282 counters were traded unchanged. Volume fell from 1.04 billion to 945 million shares.

As expected, the KLCI moved lower, as it was signaled by the appearance of a Spinning Top candlestick on Tuesday. The formation of a small black candle yesterday indicates that selling pressure on the key index was not very severe. MACD was positive, but its histogram was down slightly indicating a slowing in momentum. RSI hook down slightly, and Stochastic remain in the bullish zone. The underlying uptrend remains intact as indicated by the short, medium and long term moving averages. If the index continue to slide down today, it may get supported by the 10-days moving average at 1270 level.

Today, the FBM KLCI is expected to trade within the range of 1267 to 1286.

This week's expected range: 1250 – 1299
Today's expected range: 1267 – 1286

Resistance: 1279, 1283, 1286
Support: 1267, 1270, 1273

A Spinning Top - indecision

Inspired by overnight’s gain on Wall Street, the local market opened with a positive note yesterday, but ended broadly lower on profit taking. The FBM KLCI charted an intra-day high of 1288.42, heavy profit taking activities sent the index into the negative territory at one stage to hit the day’s low of 1275.62. Late buying of key heavyweights lifted the key index off low to close at 1279.95, the highest close of the year, gaining 1.64 point or 0.13%. Decliners outnumbered advancers by 438 to 251 while 261 counters were traded unchanged. Turnover was lower at 1.044 billion shares worth RM1.271 billion.

The price action of the FBM KLCI yesterday formed a black Spinning Top candlestick with a slightly longer upper shadow, indicating selling pressure at level above 1280. The Spinning Top indicates indecision of the market to move higher at this level. Other indicators remain positive with MACD, RSI and Stochastic continued to move higher. If the key index can overcome the strong overhead resistance at 1289, then it may move higher to test the next important psychological resistance level of 1300.

Today, the FBM KLCI is expected to trade within the range of 1268 to 1294.

This week's expected range: 1250 – 1299
Today's expected range: 1268 – 1294

Resistance: 1283, 1289, 1294
Support: 1268, 1273, 1276

Stock to watch: Dayang

Moving higher

Gain on Wall Street last Friday gave a boost to Asian market with all key indices closing in the positive territory. The local FBM KLCI opened the week with a positive gap up of 1.23 point, and moved up firmly with intermittent mild profit taking to close Monday with a gain of 7.35 points or 0.52% at 1278.31, the highest close over the last one year. Banking stocks saw some good gains with CIMB +0.36 @13.28, AFFIN +0.3 @2.64 and BIMB +0.11 @1.37. Gainers led losers by 413 to 282, with 232 counters traded unchanged. Volume traded increase to 1.0744 billion shares.

Technically, the FBM KLCI is moving out from its short term consolidation last week and closed almost near the high of the day, forming a bullish Marubozu candle, which indicates buyers were almost in full control. MACD started to hook up, and so is RSI and Stochastic, indicating a bullish outlook ahead with more upside to come. The underlying uptrend remained strong.

Today, the FBM KLCI is expected to trade within a range of 1269 to 1285

This week's expected range: 1250 – 1299
Today's expected range: 1269 – 1285

Resistance: 1280, 1282, 1285
Support: 1269, 1271, 1275

Stock to watch: UCHITEC

Uptrend intact

The benchmark FBM KLCI rose for a second week in the month of November to close last week at 1270.96, the highest closing for the year, making a 10.2 points or 0.81% gain week-on-week. The index continued to move higher on a follow through rebound from the low of 1233.45 registered on Nov 2. It charted a new intra-day high of 1279.52 on Wednesday, Nov 11, since then the key index has been more or lees moving in a tight range for the rest of the week.

Chart wise, the index is still well above the 10-weeks moving average indicating the current uptrend is intact, and its weekly RSI(14) and Stochastic (14,3,3) still remain in the bullish zone. However, weekly MACD as indicated by its shorter histogram is slowing down indicating a reduction in upward momentum.

The longer term outlook for the FBM KLCI remains positive and may test the 1300 level anytime before year end.


On the daily chart, the FBM KLCI closed last Friday at 1270.96, was down 0.79 point day-on-day. Volume traded on Friday dropped to 789.56 million shares was the lowest in the last two weeks; market breadth was mixed with gainers and losers almost equal at 315 to 311.

For most of the week, the FBM KLCI has been more or less in a profit-taking consolidation mode, drifting in a narrow range of about 20 points, as can be seen on the daily chart above. Daily MACD, RSI and Stochastic were mostly flat, supporting the consolidation scenario. The underlying trend, as indicated by the short, medium and long term moving averages is still up.

This week, the FBM KLCI is expected to trade within a range of 1250 to 1289, and today, it is expected to trade within the range of 1262 to 1279

This week's expected range: 1250 – 1289
Today's expected range: 1262 – 1279

Resistance: 1273, 1275, 1279
Support: 1262, 1265, 1267

Stock to watch: INCKEN

Hammer - bottom?

Share prices on Bursa Malaysia closed generally lower as profit taking activities continued into Thursday, Nov 12. The FBM KLCI opened lower at 1269.64 and traded in the negative territory most of the day. The key index was at one stage down 7.67 points hitting the intra-day low of 1262.48; buying interest which surfaced at mid afternoon on key heavyweights lifted the index to closed 1.6 point or 0.13% higher at 1271.75. Decliners led advancers by 379 to 287 while 244 counters were traded unchanged. Volume traded was lower at 925 million shares.

As pointed out in yesterday’s analysis, the appearance of a bearish engulfing candle indicates selling pressure, and FBM KLCI indeed continued moving southward most of the day on Thursday. Its price movement yesterday formed a hammer candlestick, which indicates buying support and may signal a temporary bottom at 1262. However, a hammer appearing at a relatively high price level is not very reliable; especially its formation was done on a last minute effort.

MACD moved up marginally and its histogram was slightly higher, indicating a slight increase in momentum. RSI was up slightly. However, Stochastic slid down slightly to 84 from 87 the previous day, a break below 80 may trigger a continued downward movement. Nonetheless, the underlying uptrend as indicated by the short, medium and long term moving averages is still intact.

Today, the benchmark index is expected to trade within the range of 1256 to 1279

This week's expected range: 1240 – 1282
Today's expected range: 1259 – 1279

Resistance: 1273, 1275, 1279
Support: 1259, 1262, 1265

Bearish Engulfing Candlestick - profit taking on new high

Share prices on Bursa Malaysia ended broadly lower yesterday on profit taking after six days of rally. FBM KLCI was dragged down by selling pressure on key heavyweights to close 3.93 points or 0.3% lower at 1,270.15. However, the benchmark index charted a new year high on intra-day at 1279.52, the highest level since May 23, 2008. Losers outnumbered gainers by 451 to 248 while 238 counters were unchanged. Turnover was slightly lower at 1.0987 billion shares.

As pointed out in yesterday’s analysis that the candlestick formation on Tuesday might indicate a possible top at this level, the price action of the KLCI yesterday confirmed the signal by forming a bearish engulfing candlestick pattern. Nonetheless, this could be just a correction due to profit taking as the KLCI chart new high. The underlying uptrend of the KLCI is still very much intact. RSI hook down slightly at 67 and Stochastic was flat at 87 are still bullish, and MACD has just made a golden cross above its trigger line, indicating more upside to come.

Today, the FBM KLCI is expected to trade within a range of 1262 to 1280.

This week's expected range: 1240 – 1282
Today's expected range: 1262 – 1280

Resistance: 1277, 1280, 1283
Support: 1259, 1262, 1267