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