FBM KLCI - Possible reversal

As expected, FBM KLCI continue to slide lower yesterday in tandem with continued weakness in regional bourses. The FBM KLCI was among the least affected benchmark indices, dropping 7.3 points, or -0.58% to close at 1241.75., dragged down mostly by banking and plantation stocks. Losers led gainers by 464 to 216 while 233 counters were unchanged. Turnover was lower at 933 million shares.

KLCI opened on Thursday with gap down of 5.01 points at 1244.04 and rapidly break the support at 1238 to hit the day’s low of 1236.20 on panic selling. Very quickly the index rebounded to above 1238, the key support level, and was hovering around the level for most of the day. Late afternoon buying pushes the index to close at 1241.75. The price action of the index formed a hammer candlestick pattern, which indicates possible bottom. The 30-days moving average is lending the index a strong support at this level.

MACD continued to slide down, indicating continued weakening of market momentum. RSI(14) at 53 has slide from the overbought zone to the neutral zone. Stochastic continued to slide toward the 50 level. All three indicators are indicating a weak market at the moment.

The current short term trend of the KLCI is down; however, the medium and long term trend as indicated by the 60 and 120 days moving average is still up. As such, the current down trend is viewed as a healthy correction to the recent run up which lasted for almost three weeks since October 5.

Today, the FBM KLCI is expected to trade within the range of 1233 to 1252, with immediate support at 1237, 1233 and 1229. Overhead resistance is expected at 1245, 1248 and 1252.

This week's expected range: 1244 – 1285
Today's expected range: 1233 – 1252

Resistance: 1245, 1248, 1252
Support: 1229, 1233, 1237

Stock to watch: SILKHLD

Further weakness is expected for FBM KLCI

KL stocks were on a weaker note yesterday with FBM KLCI declined 11.25 points, or -0.89% to close at 1249.05, dragged down by key heavyweights. CIMB -0.34 @12.44, MAYBANK -0.09 @6.75, GENTING -0.19 @7.31, and IOICORP -0.09 @5.43. The benchmark index was on the negative territory most of the day and closed almost near the low of the day. Losers led gainers by 460 to 201 while 245 counters were traded unchanged. Turnover was lower at 939.326 million shares.

The KLCI opened on Wednesday with down gap of -4.04 points, and continued to trade lower throughout the day forming a bearish black candlestick. With a close below the 1250 psychological mark and below the short term 10-days moving average, the index has turned bearish for the short term. MACD has just cross below its EMA with the histogram turning negative now. RSI continue to slide lower, and Stochastic has also cross below the 80 mark confirming the short term down trend. With all these negative indications, more downside of the index is expected ahead.

Today, the index is expected to trade within the range of 1238-1256, with immediate support at 1246, 1243 and 1238.

This week's expected range: 1244 – 1285
Today's expected range: 1238 – 1256

Resistance: 1251, 1256, 1259
Support: 1238, 1243, 1246

Appearence of Hammer in KLCI - a temporary bottom

Most regional indices were down on Tuesday due to the overnight DJIA’s fall of 104 points. FBM KLCI opened with a down gap of 2.39 points, and was rapidly sell down to the day’s low of 1246.38 (-13.54) due to panic selling. The emergence of bargain hunters soon lifted the KLCI back above the 1250 mark and was then hovering between 1251 and 1254 most of the day, a last minute buying by local funds further push the KLCI to close at 1260.30 (+0.38, +0.03%). The price action of KLCI formed a hammer candlestick chart pattern which indicates a temporary bottom. Losers led gainers by 403 to 263, with 1.004 billion shares traded.

From the chart, it was seen that the short term 10 days SMA has provided immediate support for the KLCI. The medium and long term trend as indicated by the 30, 60 and 120 days SMA are still up. However, MACD continues to slide down, indicating the weakening of momentum. RSI was up slightly, and Stochastic was down, giving mixed signals.

Today, the KLCI is expected to trade within the range of 1256 to 1270, with strong resistance expected at 1270, and support is at 1256 and 1251.

This week's expected range: 1244 – 1285
Today's expected range: 1256 – 1270

Resistance: 1265, 1270, 1275
Support: 1246, 1251, 1256

Bearish Engulfing Candlestick - Correction started

As expected, FBM KLCI corrected yesterday. The 30 counters benchmark index was down 7.18 points or -0.57% to 1259.92. As a result of the 5% RPGT announced last Friday and be effective 1 Jan 2010, property counters and builders were being sell down. IGB -0.14 @2.00, IJMLAND -0.12 @2.37, SUNRISE -0.11 @2.28, E&O -0.08 @1.15, GAMUDA -0.05 @3.29, IJM -0.07 @4.86.

KLCI open yesterday on the positive side, but slid all the way down to close at the lowest of the day, forming a bearish engulfing candlestick pattern which indicates there might be further downside ahead. Losers led gainers at 496 to 195, with 192 counters unchanged. Volume reduced greatly to 681 million shares traded. MACD, RSI and Stochastic continue to slide down, indicating weakening in momentum and market strength. The index has been congesting in the range of 1257 to 1270; a break below 1257 may see it slide further down to 1250, a critical support level.

Today, the market is expected to trade within the range of 1249 – 1265, with immediate resistance at 1265, and support is at 1257 and 1255.

This week's expected range: 1244 – 1285
Today's expected range: 1249 – 1265

Resistance: 1265, 1270, 1275
Support: 1250, 1255, 1257

Stock to watch: HIL


Disclaimer: The above is not a recommendation to buy or sell, all suggestions mentioned are purely for academic study purposes for our trend trader club members only, and the author may have personal interest and position in some of the examples mentioned. Any losses incurred if you were to trade base on the study examples above is solely your own responsibility. Do consult your dealer before taking any action

FBM KLCI - Poised for a correction

The focus of last week was the Budget 2010 tabled last Friday, which did not bring any surprises to the equity market. However, the positive outlook for the Malaysian economy next year and measures to further shore up the economy under the Budget 2010 would provide support for the market. Dow closed last Friday below the 10,000 mark at 9,972.18 (-109.13, -1.08%) may affect sentiments of the market, together with the lack luster Budget 2010, may give the market an excuse to take profit and correct.

Week on week, the FBM KLCI was up 10.33 points to close at 1267.10, however, the weekly volume dropped slightly from the previous week’s 5.221 billion shares to last week’s 5.0438 billion shares. Losers led gainers at 363 to 331, with 280 counters unchanged, and volume traded on Friday was 776.81 million shares.

On the weekly chart, the KLCI was up for the third week and closed at the year high of 1267.10. MACD, RSI and Stochastic were all up. However, on the daily chart, the MACD was up slightly but the histogram was down, indicating a slowing in upward momentum. Trend is still up.

The market is expected to trade within the range of 1244 – 1285 for this week. Immediate resistance for KLCI today is at 1271, and support is at 1262 and 1257.

This week's expected range: 1244 – 1285
Today's expected range: 1257 – 1275

Resistance: 1271, 1273, 1275
Support: 1253, 1257, 1262

Stock to watch: Hevea

Market undecided

As expected, the FBM KLCI continued its correction into yesterday’s session. It opened lower at 1259.40 (-0.66), dipped to a low of 1257.17, recovered to a high of 1263.02 and closed almost unchanged at 1260.02 (-0.04 point). Other broader base indices closed positively, FBM EMAS closed at 8478.71 (+7.07, +0.08%), FBM Top 100 closed at 8260.00 (+ 3.07, + 0.04%), FBMACE at 4358.99 (+10.71). This indicates a mixed market.

The price action of the KLCI formed a Doji candlestick yesterday, which indicates an indecision state, probably due to most investors adopting a wait and see attitude, sidelining the market ahead of the Budget 2010 to be tabled today. Volume dropped to below 1 billion with 744 million shares traded. Market breadth was almost 1 to 1 with gainers led losers at 343 to 320, and 273 counters were unchanged.

MACD and its histogram continued to slide down, indicating a slowing in momentum. RSI(14) is flat at 74.34, and Stochastic (14, 3, 3) at 87.60 continues its slides, indicating short term correction. The overall trend, as indicated by the short, medium and long term SMA is still up.

Today, the KLCI is expected to trade within a range of 1255-1265, with immediate support at 1256, overhead resistance is expected at 1263, 1265 and 1270


This week's expected range: 1238 – 1282
Today's expected range: 1255 – 1265

Resistance: 1263, 1265, 1270
Support: 1251, 1253, 1256

Stock to watch: Hiaptek

KLCI Correction started

As it was forewarn in yesterday’s technical study, share prices on Bursa Malaysia retreated from a year’s high to close broadly lower due to heavy profit taking. Continuous selling activities sent the benchmark FBM KLCI to close at the low of the day at 1260.06 (-5.68, -0.45%) on Wednesday.

The index opened with a slightly bullish tone at 1267.64 and retested Tuesday’s high of 1270 resistance level, but failed, the bear surfaced to sell down. The hourly chart formed a double top chart pattern which is bearish, and on the daily candlestick chart, a bearish engulfing pattern was formed, confirming yesterday’s shooting star formation. Volume traded drop slightly to below 1 billion shares at 926 million shares. Losers outnumbered gainers at 519 to 214, 219 counters were unchanged. Further weakness is expected today.

MACD turn flat, and the MACD histogram has turn down, showing signs of weakening in momentum. RSI has hooked down, and so is Stochastics, indicating further weakness is expected ahead. The medium to long term trend is still up, short term is expected to be down.

The CI is expected to trade within the range of 1246-1267 today, immediate support for the KLCI is expected at 1256, 1253, and 1246. Resistance is at 1263 and 1267.

This week's expected range: 1238 – 1282
Today's expected range: 1246 – 1267

Resistance: 1263, 1267, 1270
Support: 1246, 1253, 1256

Stock to watch: EVERGRN


Disclaimer: The above is not a recommendation to buy or sell, all suggestions mentioned are purely for academic study purposes for our trend trader club members only, and the author may have personal interest and position in some of the examples mentioned. Any losses incurred if you were to trade base on the study examples above is solely your own responsibility. Do consult your dealer before taking any action

Appearence of Inverted Hammer - possible Top?

FBM KLCI on Tuesday opens with a gap of 3.12 point at 1264.61 and climb to an intra-day high of 1270.08. Heavy profit taking activities after 3.30 pm pulled the index down to close at 1265.74 (+4.34, +0.34%). Losers led gainers with 419 to 327, and 241 counters were unchanged. Volume remains active with 1.208 billion shares changing hands. Regional bourses closed mixed.

The trend of the KLCI is up, as indicated by the trend indicators. Moving averages of the short, medium and long term are all indicating a bullish uptrend; MACD is up with the MACD histogram, a momentum indicator, continue to climb higher. Stochastic (14, 3, 3) at 97 indicates a very bullish condition. However, the formation of an inverted hammer-like candlestick of the KLCI indicates strong resistance at the 1270 level. RSI (14) at 80.54 indicates that the KLCI index is short term overbought, together they may forewarn of a possible short term correction ahead, as mentioned in yesterday’s report.

Today, the KLCI is expected to trade within the range of 1258 – 1273. Strong overhead resistance is expected at 1271 and 1273.

Stock to watch: Kurasia

This week's expected range: 1238 – 1282
Today's expected range: 1258 – 1273

Resistance: 1269, 1271, 1275
Support: 1250, 1256, 1260

Disclaimer: The above is not a recommendation to buy or sell, all suggestions mentioned are purely for academic study purposes for our trend trader club members only, and the author may have personal interest and position in some of the examples mentioned. Any losses incurred if you were to trade base on the study examples above is solely your own responsibility. Do consult your dealer before taking any action

KLCI Heading to test 1270

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The FBM KLCI started Monday on a slow pace, down 1.14 point in the 1st hour due to profit taking and DJIA’s fall of 67 point on last Friday, thereafter the index started to move into positive territory and closed the day at the high of 1261.49 (+4.72, 0.38%). Gainers led losers with 438 to 288, 243 counters were unchanged. Volume rose moderately to 1.333 billion shares. Regional indexes were mostly up.

KLCI continued its climb to scale new high for the year, to date it has recovered more than 61.8% of its lost ground since the high of 1524 registered on 14 Jan 2008. Moving averages of short, medium and long term are all pointing northeast indicating a strong uptrend. The rise of the KLCI is on a gradual pace as indicated by the MACD, and momentum is up. RSI (14) is now at 79.35, approaching the overbought zone of 80. As it was in the past, the KLCI may face stronger risk of correction when the RSI goes above 80. Stochastics (14, 3, 3) at 93.9 also in the short term overbought condition. The oscillators are bullish but may forewarn of a possible correction.

Today, the KLCI may continue to trade higher within the range of 1256 – 1270, it may face strong resistance at the 1268 to 1270 area.

Overall, the market is in an upbeat mood and will continue to make new year high.

Stock to watch: Success, Adventa, Glomac

This week's expected range: 1238 – 1282
Today's expected range: 1256 – 1270

Resistance: 1265, 1268, 1271
Support: 1238, 1250, 1256

Disclaimer: The above is not a recommendation to buy or sell, all suggestions mentioned are purely for academic study purposes for our trend trader club members only, and the author may have personal interest and position in some of the examples mentioned. Any losses incurred if you were to trade base on the study examples above is solely your own responsibility. Do consult your dealer before taking any action

Important psychological level for FBM KLCI

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Most major Asian bourses was down on Friday 16-10-2009, with profit taking activities continued to rule as the indexes make new high. Australia's AORD -19.90 @4842.60, Singapore's STI -4.03 @2708.12, Hong Kong's HSI -69.18 @21,929.90, Korea's KS11 -18.63 @1640.36 and Japan's N225 was up slightly @10,257.56 (+18.91). FBM KLCI started Friday cautiously with bouts of profit taking continued into midday, and the market turn bullish in the afternoon session with selective buying of big cap stocks which eventually push the index to close at the year high of 1256.77 (+9.91).

KLCI is currently in a positive mood after breaking above the psychological resistance level of 1250 and close at the high of the day. Volume was active with 1.147 billion shares traded valued at 1.217 billion Ringgit. Market breadth was healthy with 481 gainers to 239 losers, 238 counters were unchanged. Week on week, the volume has increased from 3.618 billion shares to 5.353 billion shares indicating the return of short term trading activities.

KLCI's trend is up with all the moving averages (short, medium, and long term) continue to point northeast. MACD continued to move upward, with the MACD histogram showing signs of gaining momentum. RSI(14) at 77.9 indicate bullishness and the continuing upward momentum. Stochastic(14,3,3) at 93 again hook up indicating market strength.

The 1250 is an important psychological level, it will be tested before the market can move higher.

Fundamentally, the continue weakening of the Dollar has saw the inflow of foreign fund to the Asian market, hence the strengthening of the Ringgit. The focus of the week will be the upcoming budget 2010, however, it may not have a great impact as the government is tightening the belt over expenditures, moreover, most major stimulus packages has already been announced.

The coming week will see the second and third liners active and dominate the volume page. Stock to watch: HIL, DXN, Notion, Glomac,UEMLand, Sunrise, TA, Genting

This week's expected range: 1238 – 1282
Today's expected range: 1250 – 1266

Resistance: 1260, 1263, 1266
Support: 1238, 1243, 1250


Disclaimer: The above is not a recommendation to buy or sell, all suggestions mentioned are purely for academic study purposes for our trend trader club members only, and the author may have personal interest and position in some of the examples mentioned. Any losses incurred if you were to trade base on the study examples above is solely your own responsibility. Do consult your dealer before taking any action

Black Spinning Top

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The FBM KLCI open with a gap up at 1252.30 yesterday, and hit the intra-day high of 1256.59. Thereafter, profit taking sets in and drove the index to an intra-day low of 1241.62, a last minute bargain hunt of blue chip stocks lifted the index higher to closed the day at 1246.86, up 0.02 point. A black spinning top candlestick was formed, indicating selling pressure was dominant and a possible top at this level. A close of the KLCI below the Fibonacci 61.8% level of 1247.48 indicates strong resistance around this level, and hence the volatile trading activities at this level as pointed out in yesterday's report. The 1250 psychological resistance level is an important level to cross above in order for the index to climb higher.

Volume was moderately higher with 1.365 billion shares traded, losers lead gainers with 415 to 332, and 245 counters were unchanged. A higher volume on a black candlestick day indicates distribution activities was heavy, forewarning further distribution ahead.

The overall uptrend is still intact with MACD continue to climb higher, and the short, medium and long term moving averages are still pointing northeast. Stochastic(14,3,3) at 88 has cross down slightly indicating profit taking has sets in, and RSI(14) at 74 is still bullish.

In conclusion, the overall uptrend is intact with possible short term correction.

Today's expected trading range: 1240 – 1255

Resistance: 1248, 1256, 1263
Support: 1221, 1231, 1238

FBM KLCI New High for 2009

Hi, Friends.

It's been a long lay off in writing this blog. Recently my company's technical analyst has resigned, they get me to help out in writing the technical outlook for the company's daily newsletter. So, I took it up, and think why not I post what I write to share it here as well with all my friends. Hope you enjoy reading what I write.

(Click on image to enlarge)

The FBM KLCI closed at the year high at 1,246.84 (+13.33), off the intraday high of 1,248.14. Volume surged to 1.26 billion shares, above 1.0 billion shares since 18 August 2009, indicating the return of trading activities. Market breadth at 574 gainers, 174 losers and 208 unchanged, which indicates positive outlook.

KLCI has recovered 61.8% of the downtrend range, where the 61.8% Fibonacci retracement value is 1247.84. This was hit intraday, and the CI pullback to close 1 point below it. This is an important level for the KLCI and the market may react strongly around this important Fibo level.

The uptrend of the KLCI is intact with the short term 30 days SMA, medium term 60 days SMA and the long term 120 days SMA still pointing northeast. MACD has just made a golden cross, indicating a buy. Stochastics (14,3,3) is at 90 indicating short term bullishness, but may forewarn of a possible correction due to profit taking. RSI(14) at 74 is bullish.

KLCI may test the 1250 level today, the strong overhead resistance level is at 1258. If the profit taking activities is strong, KLCI may pullback below 1250, and 1238 may provide good immediate support and opportunity to buy on dip.