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
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