FBM KLCI - lack participation

Stocks on Bursa Malaysia closed lower yesterday on lack of participation, as most investors were reluctant to take position in the absence of market moving factors and ahead of the long weekend. The FBM KLCI opened lower and turned green briefly, thereafter, it traded in the red for the rest of the day to close 4.10 points or 0.32% lower at 1271.12. Market breadth was positive with gainers led losers by 376 to 280, while 250 counters were unchanged. Volume increased marginally to 586 million shares, valued at RM798 million.

The FBM KLCI pulled back on profit taking after three days of run up, forming a black candlestick which indicates reversal of the short term uptrend. It however, managed to find support at the 1270 level, and the 10 and 30-days moving averages are also giving support from below at 1266 and 1268 level. MACD continued to move higher, and so is Stochastic, but RSI hooked down slightly. The mixed signals indicated a lack of momentum to move forward and, hence, the index might consolidate.

Today, the FBM KLCI is expected to trade within the range of 1266 to 1281.

This week's expected range: 1245 – 1281
Today’s expected range: 1266 – 1281

Resistance: 1275, 1278, 1281
Support: 1266, 1268, 1270

I wish all my clients and readers a Happy and Profitable Year 2010!

FBM KLCI - moving higher

Share prices on Bursa Malaysia closed firmer yesterday with buying interest seen in the index link heavyweights. The FBM KLCI opened marginally higher, but traded mostly in the negative territory for the whole day, and a last minute buying interest on key heavyweights lifted the benchmark index to close 2.49 points or 0.2% higher at 1275.22. Market breadth was positive with gainers outpaced losers by 383 to 251, while 244 counters were unchanged. Volume increased to 575 million shares worth RM741 million.

As expected, the FBM KLCI continues to move higher and closed at the day high, indicating the effort done to bring up the key index. MACD has just made a golden crossed above its trigger line, with the MACD histogram back to the positive territory after staying in the negative for one and a half month. RSI continued to gain strength, and Stochastic too is moving higher into the bullish zone. All these signals indicated that the index might move up further to retest the 1280 level.

Today, the FBM KLCI is expected to trade within the range of 1268 to 1281.

This week's expected range: 1245 – 1281
Today’s expected range: 1268 – 1281
Resistance: 1277, 1279, 1281
Support: 1268, 1270, 1273

Stock to watch: NOTION

FBM KLCI poised to move higher

Stock prices on Bursa Malaysia ended higher yesterday after the Christmas holiday, encouraged by the DJIA which ended the Christmas Eve at the highest level for the year. The FBM KLCI opened 0.41 point lower, but buying interest in blue-chip stocks pushed the benchmark index to close at the highest point of the day at 1272.73, gaining 8.79 points or 0.70%. Active buying interest was seen in plantation and financial stocks, with KLK, IOICORP, CIMB and MAYBANK leading the gainers. Market breadth was positive with gainers led losers by 396 to 215, while 231 counters were unchanged. Volume increased to 459 million shares worth RM595 million.

Chart wise, the FBM KLCI has now closed above the 30-days moving average (MA), which is an important support to the uptrend of the KLCI since April, after swinging up and down around it for four weeks. MACD has started to hook up, indicating a pickup in market momentum. RSI at 57.8 is gradually turning strong, and Stochastic too has crossed above the 50 level after touching 18, the oversold levels two sessions back. All these technical signals are indicating that the FBM KLCI is starting to turn strong after five weeks of correction and consolidation since hitting the high of 1288.42 on Nov 17.

Today, the FBM KLCI is expected to trade higher within the range of 1266 to 1282.

This week's expected range: 1245 – 1281
Today’s expected range: 1266 – 1282

Resistance: 1276, 1279, 1282
Support: 1266, 1268, 1270

FBM KLCI would be range-bound

Last week was a slow and sluggish week for Bursa Malaysia due to Christmas holiday falling on last Friday. The only positive news was the revised of the 5% real property gains tax (RPGT) on Wednesday to apply for properties held for under five years, rather than across the board as was earlier announced in the 2010 Budget. That gave some properties counters some small boost in their share prices, E&O and SP Setia responded with some marginal gains.

The FBM KLCI registered a loss of 3.03 points, or 0.24% week-on-week to close at 1263.94 on last Thursday, a holiday-shortened week. Weekly trading volume slipped down further to 1.714 billion shares as compared with 2.388 billion shares the previous week, reflecting a rather quiet market.

On the weekly chart, the FBM KLCI formed a Doji candlestick, which indicates indecision of the market directions, and the narrow weekly range of 12 points reflected that the index is in a state of consolidation. In actual fact, the index has been in a consolidation mode for the last four to five weeks, and is expected to continue into this week, as this is also a holiday-shortened week with only four trading days.

On the indicators, weekly MACD continued to slide down, indicating a gradual lost of market momentum. Weekly RSI was down marginally to 68.8 and weekly Stochastic slid down further to 73.9 reflecting the consolidation state of the benchmark index.

The short term weekly trend of the KLCI has turned sideways; nonetheless, the underlying trend of the KLCI as indicated by longer term moving averages is still up.

As for this week, the FBM KLCI is expected to still trade in a range-bound mode within a range of 1245 to 1281, and for today, it is expected to trade within a range of 1258 to 1268.

This week's expected range: 1245 – 1281
Today’s expected range: 1258 – 1268

Resistance: 1265, 1267, 1268
Support: 1258, 1260, 1261

Volume dips further

Trading activities on Bursa Malaysia was rather sluggish yesterday despite overnight gains on Wall Street. The FBM KLCI bucked the upward trend in the region, opened in the red and remained there until the last hour of the day to closed 0.11 point or 0.01% higher at 1260.53. Decliners outpaced gainers by 287 to 278, while 283 counters were unchanged. Volume dipped further to a fresh low of 410 million shares worth RM627 million.

Chart wise, the FBM KLCI formed a small white Doji candlestick which signifies consolidation and indecision of market direction. MACD at 0.049 continued to slide down and is near the zero line, a break below the zero line would mean the end of the bull-run since April this year. RSI has turned flat but still below 50, and Stochastics continued to slide down signifying short term weakness.

The index is now trapped with resistance on top posted by the 10 and 30-days moving average (MA), and supported below by the 60 days MA which is at now 1254. In order for the KLCI to resume its short term uptrend, it is required to break above the 30-days MA at 1268. Conversely, if the index breaks below 1254 and the 1250 psychological support level, it may move lower to test the 1230 support level.

Today, the FBM KLCI is expected to trade within a range of 1254 to 1267.

This week's expected range: 1241 – 1281
Today’s expected range: 1254 – 1267

Resistance: 1263, 1265, 1267
Support: 1254, 1256, 1258

To all my friends who celebrate Christmas, I wish you Merry Christmas!

Bullish Harami on FBM KLCI - possible reversal

Stock prices on Bursa Malaysia were generally firmer at close yesterday, encouraged by the overnight gains on Wall Street. The FBM KLCI opened 3.23 points higher at 1,258.89 on Tuesday and stayed in the positive territory on a narrow range throughout the day. It closed 4.76 points or 0.38% higher at 1260.42. Market breadth was positive with gainers led losers by 335 to 239, while 243 counters were unchanged. Volume was thin at 446 million shares, valued at RM689 million.

The FBM KLCI formed a bullish Harami candlestick pattern yesterday which is a reversal pattern, however, it still requires another candle to confirm the bullish formation. The benchmark index had found support at the 1255 level, and managed to close back above 1260, nevertheless, resistance at 1270 level is still strong. If only the index is able to close above the 1270 level, then it may turn bullish.

MACD at 0.33 continued to slide down, but is still above the zero line. RSI hooked up slightly but is still below 50. Stochastic continued to move southward. The signals from the indicators showed that the benchmark index is currently weak and is in a consolidation mode.

Today, the FBM KLCI is expected to trade within a range of 1255 to 1268.

This week's expected range: 1241 – 1281
Today’s expected range: 1255 – 1268

Resistance: 1263, 1265, 1268
Support: 1255, 1257, 1259

Stock to watch: Cocolnd

FBM KLCI looks bearish

Shares on Bursa Malaysia traded on a sluggish note yesterday as most investors were sidelined due to the long holiday. The benchmark FBM KLCI was in the positive territory very briefly in the morning but slipped into the red soon after and stayed there for the rest of the day. The key index lost 11.31 points or 0.89% to close at 1255.66, dragged down by finance stocks notably HLFG, HLB, MAYBANK and CIMB. Market breadth was negative with losers led gainers by 395 to 202, while 262 counters were traded unchanged. Volume was thin at 476 million shares worth RM892 million.

The FBM KLCI was trading in a narrow range in the morning session yesterday, however, selling pressure which surface in the afternoon session pushed the index to close at the lowest point of the day, forming a bearish long black candlestick. The index is now resting on the recent low of 1255 which formed one week ago, a break below this support level will see it sliding downward further to test the critical psychological level of 1250.

MACD has turned down and is on the verge of breaking the zero line. A break below the MACD zero line would mean the end of the bull-run which started in April this year. RSI has again break below the 50 level, which indicates that the index has turned bearish for the short term. Stochastic too has hooked down reflecting the bearish outlook.

In short, the benchmark FBM KLCI has turned bearish for the short term. The longer term outlook, nonetheless, is still remained positive.

Today, the FBM KLCI is expected to trade within a range of 1239 to 1272.

This week's expected range: 1241 – 1281
Today’s expected range: 1239 – 1272

Resistance: 1260, 1265, 1272
Support: 1239, 1248, 1252

Stock to watch: Support

Market on holiday mood

Shares on Bursa Malaysia continued their consolidation last week. The FBM KLCI opened last Monday at 1259.66 and traded in a narrow range of 16 points for the holiday shortened week, and closed on last Thursday at 1266.97, posting a week-on-week gain of 6.97 points. Due to the holiday mood where most players were sidelined, volume shrank to 2.388 billion shares worth RM3.456 billion compared with the 3.035 billion shares worth RM4.142 billion the previous week.

Chart wise, the FBM KLCI was into its fifth week of consolidation in the absence of fresh leads and long school holidays. The index formed a small white candlestick which indicates consolidation. It rested right on the 10-weeks moving average which has been providing support to the uptrend since April, and it is in a critical condition now as a close below 1260 will see the index turning weak and may head towards the south.

The weekly MACD continued to slide down further. The weekly RSI was up slightly, and the weekly Stochastic has just slid below the 80 level to 78.87. This is the first time the weekly Stochastic has come below the 80 level since April this year, and it may signify further weakness ahead.


On the daily chart, the FBM KLCI formed a black Spinning Top candlestick which indicates indecision of the index to move up further. The index has in fact hover at this level for three days and is resting right on the 30-days moving average. The 1270 has proved to be a strong resistance level.

Daily MACD has gone sideways, RSI slid down further at 52.88 and Stochastic has turned flat at 80.97 which indicate a loss of upward momentum, and the index may turn to move southward again.

The short term trend of the FBM KLCI has turned sideways, and it is going to be range-bound. The longer term trend is up as indicated by the 60 and 120-days moving average.

For this week, the FBM KLCI may trade sideway or range-bound with a downward bias within a range of 1241 to 1281. As for today, the FBM KLCI is expected to trade within a range of 1257 to 1275.

This week's expected range: 1241 – 1281
Today’s expected range: 1257 – 1275

Resistance: 1269, 1271, 1275
Support: 1257, 1261, 1264

Stock to watch: AFG

FBM KLCI - hesitant to move further

Shares on Bursa Malaysia were trading aimlessly in a narrow range yesterday. The FBM KLCI was in the red the whole day, and at one stage it gave back 6.05 points, more than what it gained the previous day, nonetheless, it ended just marginally lower by 1.78 points or 0.14% at 1269.03. Decliners outpaced advancers by 352 to 236, while 266 counters were unchanged. Turnover was higher at 654 million shares worth RM910 million.

As expected, the 1270 posted a strong resistance to the FBM KLCI as mentioned in yesterday’s analysis. The index even lost more than what it had gained at one point, indicating liquidation by some players ahead of the long holidays. However, buying support surfaced in the afternoon session pushing the index to close near its open, forming a Doji candlestick with a long lower shadow. The appearance of a Doji indicates uncertainty or indecision of the index to move ahead.

MACD continues to move up, and so is Stochastic oscillator which is at 78 now, near the overbought zone. RSI was down slightly. The mixed signals confirm the uncertainty view as indicated by the Doji candlestick. The FBM KLCI may in the short term consolidate in the range of 1250 to 1270. The longer term underlying trend is, however, still up.

Today, the FBM KLCI is expected to trade within a range of 1260 to 1275.

This week's expected range: 1238 – 1277
Today’s expected range: 1260 – 1275

Resistance: 1271, 1273, 1275
Support: 1260, 1263, 1266

FBM KLCI up but market directionless

Stocks on Bursa Malaysia was trading aimlessly for most part of yesterday, and window dressing activities in the last minute lifted the FBM KLCI from the negative territory to close 5.36 points or 0.42% higher at 1270.81. Among the heavyweights, Maybank rose 13 Sen to RM6.90, CIMB up 10 Sen @ Rm13.10, Sime Darby increased 3 sen to RM8.98 and MAXIS added 2 Sen to RM5.40. Market breadth was negative with losers led gainers by 308 to 280 while 239 stocks were traded unchanged. Volume was marginally higher at 527 million shares valued at RM802 million.

The FBM KLCI managed to break through the resistance at 1266 and close at 1270 as was mentioned in yesterday’s analysis. With a close above the 30-days moving average, the benchmark index has in the short term turned upward. MACD, RSI and Stochastic continued to move up, indicating a continuation of upward momentum in the index. However, the low volume was a concerned, as it reflects the lack of market participation and the rise may not last.

The 1270 level of the FBM KLCI is a strong resistance area, if the index is not able to close above it, then it might fall and continue to drift between 1260 and 1270.

Today, the FBM KLCI is expected to trade within a range of 1260 to 1277.

This week's expected range: 1238 – 1277
Today’s expected range: 1260 – 1277

Resistance: 1273, 1275, 1277
Support: 1260, 1263, 1265

Breaking out from consolidation

Stock prices on Bursa Malaysia reversed earlier losses to close higher, encouraged by the bullish sentiments in regional market due to the Abu Dhabi government agreed to channel US$10 billion (RM34 billion) to the Dubai Financial Support Fund that will be used to satisfy a series of obligations on Dubai World.

The FBM KLCI opened on Monday in the red, and was trading in the negative territory for major part of the day. Late buying of selected index linked heavyweights lifted the benchmark index to close higher at 1265.45, gaining 5.45 points or 0.43%. However, decliners still outpaced gainers by 361 to 250 with 228 counters unchanged. Volume dropped further to 515 million share worth RM707 million.

Chart wise, the FBM KLCI formed a bullish reversal candlestick, and closed right on the 30-days moving average, trying to breakout from the resistance. MACD turned up marginally as shown by the shorter histogram. RSI has turned up to above 50, back into the bullish zone, and Stochastic too has just crossed up above its moving average. These signals from the indicators are indicating that the index is trying to move out from its current consolidation. A break above 1266 today would see the index turning bullish for the short term, and may move higher to challenge the 1270 level.

Today, the FBM KLCI is expected to trade within a range of 1253 to 1275.

This week's expected range: 1238 – 1277
Today’s expected range: 1253 – 1275

Resistance: 1269, 1272, 1275
Support: 1253, 1256, 1259

Continue to consolidate

The FBM KLCI was basically in a consolidation mode the whole of last week. It opened on last Monday at 1270.20 and dipped to the intra-week low of 1255.76 on Wednesday, but managed to recover from the week’s low to close on Friday at 1260.00. The key index lost 10.20 points week-on-week, and overall weekly volume was lower at 3.035 billion shares valued at RM4.142 billion, compared with 4.071 billion shares worth RM5.640 billion the week before. This clearly reflects the lack of momentum of the KL market.

Chart wise, the FBM KLCI has been in a correction and consolidation mode for the last four weeks since it hit the year high of 1288.42 on 17th November. The key index has now come down to a critical level as can be seen on the weekly chart. It is now resting right on the 10-weeks moving average (MA) which has been giving good support to the index since its up move in April this year. A closed below 1260 in the coming week would mean an end to the current uptrend, and could see the FBM KLCI moving further downward.

The weekly MACD continued to slide downward, indicating the weakening of market momentum and so is the weekly RSI and Stochastic. However, from the weekly perspective, they are still in the bullish zone, hence; the current weakness may just well be a short term consolidation.


On the daily chart, the FBM KLCI has stayed below the 30-days moving average for the last four sessions, and now the 30-days MA would post as a resistance to the index at 1265 level.

Daily MACD has turned flat; however, it is at the brink of crossing the zero-line. A cross of the MACD below the zero-line would mean weakness in the medium term; hence, the critical level to watch on the daily chart is the 1250 level. Daily RSI continued to stay below the 50 level, which indicates mild bearishness, and the daily Stochastics has turn flat, indicating consolidation.

All in all, the mixed signals of the indicators from the weekly and daily chart simply indicates that the market is in a consolidation mode for the short term, the longer term uptrend is, however, still very much intact.

This week, the benchmark index may continue to drift within the range of 1238 to 1277 with a downward bias. As for today, the FBM KLCI is expected to trade within a range of 1253 to 1267.

This week's expected range: 1238 – 1277
Today’s expected range: 1253 – 1267

Resistance: 1263, 1265, 1267
Support: 1253, 1255, 1258

Technical Rebound

Shares on Bursa Malaysia ended mixed yesterday. The FBM KLCI rebounded to close 4.14 points or 0.33% higher at 1259.90, after three consecutive sessions of losses. The benchmark index opened 0.56 points higher and remained in the positive territory, supported by overnight’s gain on Wall Street. However, losers still led gainers by 334 to 279 with 255 counters unchanged. Volume traded was lower at 572 million shares, valued at RM818 million.

Chart wise, the FBM KLCI formed a bullish white candlestick yesterday, signifying a pause to the current short term correction, and the medium term 50-days moving average at 1255 has provided support to the downtrend. MACD has rebounded slightly, indicating a slow down in downward momentum. RSI too has hook up, but still remain below the 50 mark. Stochastic has turned flat. With the technical indications, the index may try to form bottom at this level, and the underlying longer term uptrend is still intact.

Today, the FBM KLCI is expected to trade within a range of 1253 to 1265

This week's expected range: 1230 – 1288
Today's expected range: 1253 – 1265

Resistance: 1261, 1263, 1265
Support: 1253, 1255, 1257

Sliding southward

Shares on Bursa Malaysia continue to slip down further on Wednesday in line with most other major Asian bourses, taking cue from overnight’s weak performance on Wall Street. The FBM KLCI opened weak with a down gap of 2.78 points at 1258.68, drifted in a narrow range in the negative territory throughout the day and ended the day lower at 1255.76, falling 5.7 points or 0.45%. Losers outpaced gainers by 391 to 208, while 254 counters were unchanged. Turnover was lower at 623 million shares, valued at RM896 million.

As expected, the FBM KLCI slipped down further to test the downside support, the candle formation shows that the key index might fall further, as there is still no sign of bottom yet. The key support now is at 1250, an important psychological support level. The medium term 60-days moving average at 1247 which coincides with the recent pivot low on Nov 30 might lend a strong support.

MACD, RSI and Stochastic continue to slide down further reflecting the current weak market conditions.

Today, the FBM KLCI is expected to trade within a range of 1248 to 1263

This week's expected range: 1230 – 1288
Today's expected range: 1248 – 1263

Resistance: 1258, 1261, 1263
Support: 1248, 1251, 1253

Stock to watch: TCHONG, NTPM

Further downside for FBM KLCI

Stock prices on Bursa Malaysia continued to consolidate further yesterday. FBM KLCI opened in the positive territory but turned red soon after, and fluctuated in a very narrow trading range throughout the day. A last minute sell out of some key index link stocks push the benchmark index to close at the lowest point of the day at 1261.46, losing 3.9 points or 0.31%. Losers led gainers by 353 to 265, while 257 counters were unchanged. Volume traded was lower at 640 million shares, valued at RM828.9 million.

The price action of the FBM KLCI yesterday formed a bearish black candlestick which indicates a continuation of the current short term down trend. For the first time since June, the KLCI closed with a bearish black candle below the important 30 days moving average which had all these while supported the current uptrend, indicating there could be further downside to the key index.

MACD continued its slides indicating a picking up in downward momentum. RSI at 47.7 has just crossed below the bull-bear division level at 50. Stochastic too has just hook down below its 50 level. All these three indicators are indicating possible further downside for the FBM KLCI.

Today, the FBM KLCI is expected to trade within a range of 1250 to 1270

This week's expected range: 1230 – 1288
Today's expected range: 1250 – 1270

Resistance: 1265, 1267, 1270
Support: 1250, 1255, 1258

A lethargic market

Shares on Bursa Malaysia started the new week on a lethargic mode, and the overall market was very quiet without any fresh leads. The FBM KLCI was not updating in the morning session due to some technical issue, and that added to the quietness of the market. The afternoon session saw some liquidation on some index link counters, probably due to players locking in profit gained for the year so far, and that sent the benchmark index to drop 4.84 points or 0.38% to close at the lowest point of the day at 1265.36. Decliners led gainers by 309 to 295, while 256 counters were unchanged. Volume traded was low at 669 million shares worth RM848 million.

Chart wise, the FBM KLCI is again closed below the short term 10-days moving average (MA), and rested right on the 30-days MA, indicating short term correction. MACD, RSI and Stochastic continued to slide down, indicating possible further weakness ahead, supporting the short term correction and consolidation view. As the overall volume is low, this could well be a temporary correction. Nonetheless, the key index is in a critical support level, as a break below the 30-days MA may trigger further sell down to the 1250 level. The underlying uptrend as indicated by the longer term moving averages is, however, still intact.

Today, the FBM KLCI is expected to trade within a range of 1258 to 1273

This week's expected range: 1230 – 1288
Today's expected range: 1258 – 1273

Resistance: 1268, 1270, 1273
Support: 1258, 1261, 1263

FBM KLCI - Continue to consolidate

Stocks on Bursa Malaysia opened last week with a gap down at 1256.88 due to the Dubai World debt issue. Panic selling sent the FBM KLCI down to the low of 1248.58 briefly, and the index quickly recovered to close at 1259.11 on last Monday. Technical rebound on last Tuesday continued to push the key index higher at 1266.71, and Wednesday, the KLCI managed to close back above the 1270 level, and remained at that level for the rest of the week and closed last Friday at 1270.20, making a small loss of 0.41 point week-on-week. Overall volume for the week stood at 4.071 billion shares worth RM5.640 billion compared with 3.84 billion shares worth RM4.089 billion the week before last week.

On the weekly chart, the FBM KLCI came down and tested the support of the 10-weeks moving average (MA) and rebounded. The 10-weeks MA is now giving the support at 1255.41. The longer term 30-weeks MA at 1169 is still point upward strongly.

Weekly MACD continued to slide down further, and is below its trigger line for the third week, indicating consolidation. Weekly RSI was almost flat at 72.57, whilst weekly Stochastic was lower at 86.96 indicating a market which lack momentum and in consolidation.


On the daily chart, the benchmark index is clearly seen to be consolidating at the 1270 level, which marked an important support level for the current market. It is supported by the short term 10-day MA which is now at 1269.85, a close of the index below this level will see it moving downward further to 1265 level which is where the important 30-days MA is now. The 30-days MA has now turn flat pointing to a sideway mode.

Daily MACD is flat but is still below its trigger line, RSI has hook down slightly, whereas daily Stochastic is pointing upward. The mixed signals of the indicators are pointing toward a possible sideway consolidation market ahead.

As a conclusion, the underlying longer term uptrend of the FBM KLCI is still remained intact and for the immediate short term the market may go sideways.

This week, the FBM KLCI is expected to trade within a range of 1230 to 1288 with the support zone at 1239-1255 and resistance zone at 1279 to 1288.

This week's expected range: 1230 – 1288
Today's expected range: 1266 – 1274
Resistance: 1272, 1274, 1276
Support: 1266, 1268, 1270

Market in consolidation

After two days of running up, shares on Bursa Malaysia were mostly in the profit taking mode yesterday, amid a lack of market driver. The FBM KLCI opened in the positive territory but went into red in the afternoon session, last minute buying of key heavyweights managed to help put the key index back in the green to close at 1272.35, gaining 1.20 point or 0.09%. Decliners outpaced losers by 338 to 275, while 286 were unchanged. Volume dropped to 643 million shares worth RM821 million.

As mentioned in yesterday’s analysis, the short term 10-days moving average will provide support to the FBM KLCI, and it did. The KLCI formed a Doji yesterday, which indicates that the key index was undecided or hesitant to move up, probably due to the lack of market driver, and profit taking was active throughout the day yesterday.

MACD was up slightly but is still below its trigger line, hence, the lack of momentum. RSI inched up slightly, and Stochastic has just crossed above its 50 mark, indicating a continuation of upward momentum.

In view of the drastic drop in market volume, the KLCI may continue to drift sideways in the next few days; perhaps some year end window dressing activities might lift the index higher, but would be limited.

Today, the FBM KLCI is expected to trade within the range of 1266 to 1278.

This week's expected range: 1230 – 1281
Today's expected range: 1266 – 1278

Resistance: 1274, 1276, 1278
Support: 1266, 1268, 1270

FBM KLCI - back above 1270

Stocks on Bursa Malaysia were broadly higher yesterday on improved sentiments, buoyed by Wall Street’s overnight gain of 126 points. The FBM KLCI opened with a gap up at 1273.28, the high of the day, and profit-taking activities sent the index down to the low of 1267.88 before closing at 1271.15, gaining 4.44 points or 0.35%. Market breadth was positive throughout the day with gainers led loser by 442 to 218, while 230 counters were traded unchanged. Turnover was at 855 million shares worth RM1.0466 billion.

Chart wise, the FBM KLCI has moved across its short term hurdle at 1271 (as mentioned in yesterday’s analysis), and was back above the 10 and 30 days moving average. MACD starts to turn upward as shown by its histogram. RSI continued to move higher and Stochastic too has just cross above its %D line indicating possible further upside. The recent correction is possibly over with indications give by the various indicators.

Today, the FBM KLCI is expected to trade within the range of 1263 to 1278.

This week's expected range: 1230 – 1281
Today's expected range: 1263 – 1278

Resistance: 1274, 1276, 1278
Support: 1263, 1265, 1268

FBM KLCI is firmer

Stocks on Bursa Malaysia traded firmer yesterday as the Dubai World’s financial woes abated. Gains in financial stocks and key heavyweights help push the FBM KLCI higher to close at the highest point of the day at 1266.71, gaining 7.6 points or 0.6%. Investors took the opportunity to bargain hunt but the broader market remained cautious as retail players sell into strength. Decliners outpaced gainers by 327 to 310 while 249 counters were traded unchanged. Turnover was lower at 824 million shares.

Chart wise, the FBM KLCI has again moved above the 30-days moving average (MA), which all these while, has been providing good support to the uptrend since April. While the key index has gain support from the 30-days MA, it still face some resistance from the short term 10-days MA at 1271. If the KLCI can overcome this resistance at 1271, then it may stage a rally to retest the recent high of 1288.

MACD remained weak, indicating the index is still in consolidation mode. RSI has; however, hook up above the 50 level to come back to the bull territory. Stochastic has also starts to hook up, indicating a possible change in the direction of the downward movement ahead.

Today, the FBM KLCI is expected to trade within the range of 1259 to 1272

This week's expected range: 1230 – 1281
Today's expected range: 1259 – 1272

Resistance: 1268, 1270, 1272
Support: 1259, 1261, 1263

A volatile day

Stocks on Bursa Malaysia opened lower across the board on Monday, Nov 30, as a catch up on the heavy losses suffered by other Asian bourses last Friday due to the Dubai World debt default issue. FBM KLCI opened 14.74 points lower at 1,255.87 and fell to the intra-day low of 1248.58 (-22.03 points), but recovered gradually to hit an intra-day high of 1268.98 before some last minute selling sent it lower to end the day 11.5 points or 0.91% lower to close at 1259.11. Decliners outpaced advancers by 506 to 208 while 210 counters were traded unchanged. Volume increases to 1.0901 billion shares.

Chartwise, the FBM KLCI formed a white Spinning Top candlestick with long shadows, which indicates high volatility of the day and uncertainties. It’s close below the 30-days moving average indicates that the index is weak in the short to medium term and there might be further weakness ahead. MACD continues to slide down and so is Stochastic indicating continued weakness of the index. For the first time since June 22, the RSI slid below the 50 level which indicates weakness and the index might consolidate further. The underlying longer term trend as indicated by the 60 and 120 days moving average is, however, still up.

Today, the FBM KLCI is expected to trade within the range of 1245 to 1274

This week's expected range: 1230 – 1281
Today's expected range: 1245 – 1274

Resistance: 1264, 1269, 1274
Support: 1245, 1248, 1254

Uncertainties ahead

Shares on Bursa Malaysia continued to trend sideways last week in the absence of fresh leads. The FBM KLCI traded in a narrow range of 5.95 points between the week’s high of 1274.77 and the low of 1268.82, and ended the week on last Thursday at 1270.61, losing 3.75 points or 0.29% week-on-week. Weekly volume turnover was down to 3.0858 billion shares from 5.2742 billion shares the previous week.

On the weekly chart, the FBM KLCI hit the year high of 1288.42 the week before last week and pulled back to close near the week’s low at 1274.36 forming a shooting star-like candlestick which may forewarn weakness ahead, as mentioned in last Monday’s report. True enough; the key index went into a consolidation mode last week, forming a Doji candlestick which indicates uncertainties ahead.

Weekly MACD has crossed below its trigger line, indicating the weakening of market momentum. Weekly RSI and Stochastic also slid down marginally, but still remain in the bullish zone.

The underlying uptrend as indicated by the moving averages is still remained up. The short term 10-weeks moving average which has been providing support to the current uptrend, may provide cushion to the index at the 1250 level.


On the daily chart, the KLCI has moved below the short term 10-days moving average indicating short term weakness. This is supported by the daily MACD, RSI and Stochastic that are moving southward, indicating possible further weakness ahead.

The 30-days medium term moving average which is now at 1263 may lend some immediate support to market weakness. If the 1260 level is broken, it may trigger some short term panic selling that may pull the index down to the 1250 or 1230 level. The longer term trend as indicated by the 60 and 120 days moving average is, however, still trending up.

Due to the “Dubai factor”, the key index is expected to be more volatile and may trade in a much wider range with a downward bias.

Today, the FBM KLCI is expected to trade within the range of 1250 to 1278

This week's expected range: 1230 – 1281
Today's expected range: 1250 – 1278

Resistance: 1273, 1276, 1278
Support: 1250, 1260, 1263

Sleepy market

Share prices on Bursa Malaysia ended mostly lower yesterday with major Banking stocks and selected heavyweights dragging down the index. FBM KLCI ended lower at 1271.00, down 1.09 point or 0.09% after opening higher at 1273.16. Losers led gainers by 358 to 288 while 255 counters were traded unchanged. Volume was lower at 753.11 million shares.

Chart wise, the FBM KLCI formed a small body black candlestick, indicating low volatility and is in a consolidation mode. The key index has been holding well at the 1270 level for the last three days. MACD, RSI and Stochastic continue to slide down indicates the weakening of market momentum supporting the consolidation view. As the KLCI is now closing below the short term 10 days moving average, it is weak in the short term. The 10 days SMA is posting a resistance at 1274.10, if the KLCI is able to break above this level, then it may trigger a run to retest the recent high. If the key index closed below 1270, then further weakness is expected ahead, and the next main support will be at the 1260 level.

Today, the FBM KLCI is expected to trade within the range of 1265 to 1277

This week's expected range: 1245 – 1295
Today's expected range: 1265 – 1277

Resistance: 1273, 1275, 1277
Support: 1265, 1267, 1269

Quiet market

Share prices on Bursa Malaysia ended mixed yesterday. FBM KLCI was very much in a consolidation mode despite the overnight’s gain on Wall Street. The benchmark index rose 1.21 points or 0.1% to 1,272.09 after opening 0.23 point higher at 1,271.11. Decliners outpaced gainers by 367 to 292 while 261 counters were unchanged. Overall volume was lower at 759.806 million shares.

Chart wise, the KLCI formed a small white candlestick, indicating low volatility and consolidation. MACD slides further but still remain in the positive territory, RSI was up slightly, whereas, Stochastic continues its slides southward. The key index has now closed below the 10-days moving average, indicating short term correction and may consolidate further. The medium term 30-days moving average which has been providing good support to the current uptrend may provide support at around 1260 level. Longer term uptrend remained intact.

Today, the FBM KLCI is expected to trade within the range of 1267 to 1277

This week's expected range: 1245 – 1295
Today's expected range: 1267 – 1277

Resistance: 1274, 1277, 1280
Support: 1265, 1267, 1270

Stock to watch: KFIMA

FBM KLCI - in consolidation mode

Shares on Bursa Malaysia traded generally lower yesterday in the absence of fresh leads. FBM KLCI opened the week on a weak note and traded in the negative territory for most part of the day, the key index shed 3.48 points or -0.27% to close at 1270.88. Decliners led gainers by 428 to 234, with 252 counters traded unchanged. Turnover was lower at 808 million shares.

As expected, KLCI continues its slide southward. The benchmark index was trading in a narrow range of 3.9 points for most part of the day, forming a small body candlestick, which indicates mild selling pressure and consolidation. It, however, has closed below the short term 10-days moving average, indicating short term downtrend. Other indicators also supported this, with MACD, RSI and Stochastic continue to slide southward. The 30-days moving average may provide strong support to the current market correction at 1260 level, as this moving average has been providing good support to the current uptrend since April this year.

Today, the FBM KLCI is expected to trade within the range of 1263 to 1279

This week's expected range: 1245 – 1295
Today's expected range: 1263 – 1279

Resistance: 1273, 1276, 1278
Support: 1263, 1265, 1268

Market going for consolidation

The listing of the much awaited MAXIS last Thursday was a non-event, as it did not lift the market to move higher, and the broad market was in a consolidation mood for most of the time last week. The benchmark FBM KLCI opened last week on a positive note at 1272.98, rallied to an intra-week high of 1288.42, and closed the week off-high at 1274.36, posting a week-on-week gain of 3.4 points or 0.27%. Weekly volume traded was slightly higher at 5.2742 billion shares as compared with the previous week’s volume of 5.0721 billion shares.

The price movement of the FBM KLCI formed a shooting-star candlestick on the weekly chart, which signifies a possible market top at last week’s high of 1288.42. Further weakness and downward correction of the key index is anticipated. Weekly MACD has just crossed below its trigger line, indicating possible correction ahead. RSI formed a bearish divergence, but Stochastic remained in the bullish or overbought zone.

The underlying weekly trend as indicated by the moving averages remained up. The short term 10-weeks moving averages which has been providing good support to the current rally will lend support at 1245 level.


On the daily chart, the FBM KLCI formed a black Doji-like candlestick last Friday which indicates uncertainties. It found support on the short term 10-days moving average last Friday at 1274. This support maybe fragile as other indicators is pointing to a possible further correction ahead.

Daily MACD has just crossed below its trigger line with the histogram now turning negative, daily RSI continued to move lower and Stochastic has just move below its 80 mark, indicating further correction is anticipated ahead.

The 30-days moving average which has been supporting the current uptrend may provide good support at 1260 level.

This week, the FBM KLCI is expected to trade within a range of 1250 to 1295, and today, it is expected to trade within the range of 1260 to 1284

This week's expected range: 1245 – 1295
Today's expected range: 1263 – 1284

Resistance: 1277, 1280, 1284
Support: 1263, 1268, 1271

Stock to watch: SALCON, BJCORP

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

Spinning Top - Toppish?

As expected, FBM KLCI continues its uptrend on Tuesday, Nov 10, following a strong rally on Wall Street overnight. Strong buying interest was seen in finance stocks, with CIMB gaining 0.18 at 12.82, HLBANK +0.11 at 8.35, and AMMB +0.11 at 4.90. The benchmark index open the day with a gap up of 5.89 point at 1273.64 and rallied to an intra-day high of 1277.81, profit taking at mid afternoon sent the index down from its high to close at 1274.08, +6.33 or 0.5%. Market breadth was narrow at almost one to one, with gainers led losers by 364 to 325, 267 counters were traded unchanged. Turnover was moderately higher at 1.1583 billion shares

The price action of the KLCI formed a spinning-top candlestick with long upper shadow, the appearance of this candlestick at high price level may forewarn of a possible top. Other indicators, MACD, RSI and Stochastic are all indicating an increase in upward momentum and market strength. Short, medium and long term trend remain up.

Today, the FBM KLCI is expected to trade within a range of 1267 to 1282.

This week's expected range: 1240 – 1282
Today's expected range: 1259 – 1276

Resistance: 1277, 1279, 1282
Support: 1267, 1270, 1272

KLCI poised to test higher target

Share prices on Bursa Malaysia ended firmer yesterday led by gains in heavyweight plantation stocks, with SIME and IOICORP gaining 0.10 and 0.24 respectively. FBM KLCI was in the positive territory most of the day, strong buying interest in mid afternoon on plantation stocks pushes the benchmark index to close at the highest level of the day at 1267.75, +6.99 or 0.55%. Advancers led decliners by 403 to 291, with 288 counters unchanged. Overall turnover was lower at 1.0995 billion shares.

The FBM KLCI continues its upward move, closing at the highest point of the day, indicating a bullish undertone. MACD, RSI and Stochastic continue to move higher, indicating a pickup in momentum and market strength. Short, medium and long term trends are all up. With the positive indications by all technical indicators, the KLCI is poised to test the recent high of 1270.44, and may possibly move ahead to challenge the next higher resistance level at 1281.

Today, the FBM KLCI is expected to trade within the range of 1259 to 1276.

This week's expected range: 1240 – 1282
Today's expected range: 1259 – 1276

Resistance: 1270, 1273, 1276
Support: 1253, 1259, 1262

Stock to watch: MIECO

FBM KLCI is positive

Share prices on Bursa Malaysia completed its correction on last Monday, Nov 2 after hitting an intra-day low of 1233.45. Thereafter, the FBM KLCI recovered its lost ground gradually to close last week at 1260.76. Week-on-week, the KLCI posted a gain of 17.53 points or 1.41%. Volume increase substantially from 4.7394 to 6.6622 billion shares traded, mainly generated by the lower liners.

Technically, from the weekly chart perspective, the KLCI uptrend is still intact, supported very well by the 10-weeks moving average. Weekly RSI and Stochastic are bullish, MACD, however, is showing a weakening in upward momentum. The immediate overhead resistance lies at the recent high of 1270.44, if it can be broken convincingly, then KLCI may move to test the next target of 1300 before the year end.

Let’s now take a look at the picture on the daily chart.


On the daily chart, a strong gain of 203 points on the Dow overnight has help the FBM KLCI to open on Friday, Nov 6, with a gap up of 6.11 point at 1260.07. Thereafter, the KLCI has been moving in a very narrow range of about 3 point between 1260 and 1263. Intra-day movement of the KLCI indicated active profit taking activities on the FBM KLCI component stocks as the index slid gradually down after hitting the intra-day high of 1263.03 to close the day at 1260.76, forming a small body candlestick with a longer upper shadow, this type candlestick formation indicated low volatility and a lack of upward momentum.

MACD continued to move upward, but the histogram is still in negative territory. RSI and Stochastic also continue to move upward indicating a gradual gain in market strength. Uptrend is intact as indicated by all the short, medium and long term moving averages.

This week, the FBM KLCI is expected to trade within a range of 1240 to 1282, and today, it is expected to trade within a range of 1254 to 1267.

This week's expected range: 1240 – 1282
Today's expected range: 1254 – 1267

Resistance: 1263, 1265, 1267
Support: 1254, 1256, 1259

FBM KLCI - taking a breather

The Dow’s overnight gain of 30 points failed to excite the market. Most regional bourses were in the red yesterday. The FBM KLCI was in the negative territory most of the day, traded in a narrow range of about 2 points. A last minute buying of key index stocks pushes the benchmark index to close marginally higher at 1253.96, +0.12 or 0.01%. However, the FBM ACE index rose 117.82 points or 2.63% to close at 4598.61. Losers led gainers by 377 to 294, with 237 counters traded unchanged. Turnover rose to 1.523 billion shares, the highest in three months with most trading activities focus in lower liners.

The price action of the FBM KLCI formed a small white candle yesterday, indicating a lack of buying interest or consolidation. However, the index is above the short term 10-days simple moving average, with MACD continue to move higher, and so is Stochastic, indicating a positive outlook for the short term. The longer term trend as indicated by the 30, 60 and 120 days moving average remain up.

Today, the FBM KLCI is expected to trade within a range of 1248 to 1260.

This week's expected range: 1200 – 1271
Today's expected range: 1248 – 1260

Resistance: 1255, 1257, 1260
Support: 1245, 1248, 1251

Stock to watch: GHLSYS

KLCI reverse up

Despite overnight’s lower close of the Dow, shares on Bursa Malaysia closed broadly higher yesterday, Nov 4. FBM KLCI opened higher and traded upward to close at 1253.84, the highest level of the day, up 11.52 point or 0.93%, with notable gains in PPB, DiGi, Public Bank, HL Bank, Tanjong and Genting. Market breadth was positive with 489 gainers to 193 losers, 219 counters were unchanged. Volume traded was higher at 1.2562 billion shares, with bulk of interest in the lower liner stocks.

Technically, the FBM KLCI formed a bullish Marubozu candle, confirming the bottom reversal signal generated by the white hammer candlestick formed on Monday. At 1253.84, the KLCI has closed above the short term 10-days moving average, breaking out from its congestion range at the 1240 level. MACD and its histogram has moved higher, RSI at 61 compared with 53 yesterday is turning stronger, and Stochastic has also hook up to cross its %D line, all these indicators are indicating a positive change in the direction of the FBM KLCI.

Today, the FBM KLCI is expected to trade within the range of 1246 to 1265, with support at 1246 and 1239, and resistance at 1257, 1261 and 1265.

This week's expected range: 1200 – 1271
Today's expected range: 1246 – 1265

Resistance: 1257, 1261, 1265
Support: 1235, 1239, 1246

Stock to watch: MSPORTS

A sideway market

The overnight rally of the Dow failed to do much for Asian bourses yesterday, Nov 3, as investors continued to trade cautiously. The FBM KLCI opened 0.15 point lower at 1241.61 and traded higher to an intra-day high of 1245.47 but closed the day with a marginal gain of 0.56 point at 1,242.32. Market breadth was negative with losers led gainers by 389 to 259, and 241 counters were unchanged. Volume traded was higher at 1.2963 billion shares.

The price action of the KLCI formed a small white body inverted hammer candlestick, indicating the bear is still in control. Market momentum is still weak as MACD continued to slide lower. RSI at 53 is flat and Stochastic also flat at 25.67 are indicating a slowing in downward selling pressure.

On the short term, the KLCI will move in a congested sideway range, the 30 days moving average at 1235 will provide immediate support to the KLCI on the downside, but the 10 days moving average at 1252 will continue to cap the upside. The longer term uptrend as indicated by the 60 and 120 days moving average is still intact.

Today, the FBM KLCI is expected to trade within the range of 1235 to 1250.

This week's expected range: 1200 – 1271
Today's expected range: 1235 – 1250

Resistance: 1245, 1247, 1251
Support: 1235, 1238, 1240

Market might rebound

With sentiment affected by Dow’s 249 points decline on last Friday and weak performances of regional bourses, the FBM KLCI opened on Monday with a down gap of 5.06 points at 1238.17 and rapidly moved down to the intra-day low of 1233.45 but recovered to stay above the support of 1237 most of the day, and close at the high of the day at 1241.76, day-on-day it was down 1.47 point or 0.12%. Decliners led advancers by 410 to 240 with 212 counters traded unchanged. Volume stood at 1.0739 billion shares, was healthy.

As mentioned in yesterday’s report, the 30-days simple moving average (SMA) provided the needed support for the KLCI at 1234 level, and investors start to pickup quality stock at this level after the benchmark index declined more than 30 points from its recent high of 1270. The index may have seen a temporary bottom yesterday as it formed a hammer-like candlestick.

MACD and its histogram continue to slide further indicating the weakening of momentum; RSI(14) at 53 is neutral and Stochastics(14,3,3) at 26 is near oversold and may stage a rebound. For the short term, the index may trap in a consolidation mode with immediate support at 1233 and resistance at 1256.

Today, the index is expected to trade within the range of 1236 to 1250 with immediate support at 1239 and 1236, and overhead resistance at 1245, 1247 and 1251.

This week's expected range: 1200 – 1271
Today's expected range: 1236 – 1251

Resistance: 1245, 1247, 1251
Support: 1233, 1236, 1239

Stock to watch: NOTION

Further weakness is expected this week for FBM KLCI

(FBM KLCI Weekly, Click on image to enlarge)


Share prices on Bursa Malaysia moved into a post-Budget correction mode last week in tandem with the weak performances of Wall Street and rest of regional bourses. Week-on-week, the FBM KLCI declined 23.87 points, or -1.88% to close at 1243.23 on last Friday. Weekly volume was slightly lower at 4.7394 billion shares traded compared with 5.0438 billion shares the previous week. In view of lack of fresh news and four upcoming IPOs that may suck away a substantial amount of liquidity from the market, Bursa Malaysia may continue to consolidate further in the coming week.

On the technical front, the short term weekly trend is still up as indicated by the 10-weeks simple moving average (SMA). The 10-weeks SMA has been providing good support to the current uptrend. Currently the 10-weeks SMA support for the FBM KLCI lies at 1220, not until the index close below the 10-weeks SMA, the trend is still considered intact, and weaknesses are just part of correction and consolidation process after a 430 points run up from 840 point level since late March 2009. The neckline of the Head-and-Shoulder pattern may also provide support at 1210 level.

Weekly MACD has weakened slightly as indicated by the lower histogram, indicating a slowing in momentum. RSI(14) has hook down to 70.4 from 77.7 the previous week. Weekly Stochastic too has hook down to 93.46, as long as it is still above 80, it is just indicating a short term correction is taking place.

Let’s now take a look at the scenario as it is portray on the daily chart.

(FBM KLCI daily, Click on image to enlarge)


On the daily chart, FBM KLCI rebounded on last Friday following a strong rally of 199 points gain overnight of the DJIA on Thursday, October 29. However, the rebound was not convincing as it opened with a gap up of 4.36 points but closed lower than the opening at 1243.23 with a 1.48 points gain, forming a black candle. The price action indicated the bear was in control, taking the opportunity to sell down.

The FBM KLCI has closed below its 10-days SMA indicating a short term correction. The 10-days SMA now at 1256.87 is forming an overhead resistance. However, the 30-days SMA at 1234.10 may provide support to the correction, as it has been for the current uptrend. The underlying longer term trend, i.e. the 60 and 120 days SMA, is still up.

The daily MACD has crossed below its trigger line, and the histogram is negative indicating a correction mode. RSI(14) has come near the 50 line, is now at 54. The RSI 50 level has been providing good support to the current uptrend since late march. However, a break below the RSI 50 mark or 1237 will trigger heavy selling on fear and may bring the index further down. Stochastic has slip below its 50 level, indicating possible further weakness ahead.

As the Dow fell 249 points to close at 9712.73 on last Friday, it may further drag the regional indices down today. Today, the FBM KLCI is expected to trade within the range of 1229 to 1251, with immediate support at 1237, 1234 and 1229. Overhead resistance is expected at 1245, 1247 and 1251.

This week's expected range: 1200 – 1271
Today's expected range: 1229 – 1251

Resistance: 1245, 1247, 1251
Support: 1229, 1234, 1237