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
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