FBM KLCI - taking a breather

Stocks on Bursa Malaysia ended mostly firmer yesterday after three consecutive days of fall. The FBM KLCI opened in the positive territory but ended in the red to close 1.26 points or 0.1% lower at 1264.51. Market breadth was positive throughout the day with gainers led losers by 534 to 190 while 234 counters were unchanged. Volume traded was lower at 935 million shares worth RM1.425 billion.

Chart wise, the FBM KLCI formed a small black candlestick with short upper and lower shadow indicating consolidation with mild selling pressure, as the market takes a breather after two days of hefty fall.

MACD continued to slide lower. RSI(14) at 35.5 is tapering off, and Stochastic at 9 has entered the short term oversold zone or the bearish territory. The indicators reflected the weak market conditions and the situation may persist until there is sign of reversal, which is not in sight yet.

The benchmark index continued to stay below the short to medium term moving averages (MA) but is still above the long term MA. Hence, for the short term the index may continue to face some selling pressure. The index will face strong resistance at the 1274 to 1282 region and may get good support at 1240 to 1250 region.

The short term trend of the FBM KLCI is now down but the longer term trend is still up.

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

This week's expected range: 1270 – 1320
Today’s expected range: 1250 – 1270

Resistance: 1266, 1268, 1270
Support: 1250, 1255, 1260

FBM KLCI continue to move south

Stocks on Bursa Malaysia extended its losses for the fourth consecutive day, after the central signaled it may raise interest rates sooner than economists forecast. Banking stocks led by CIMB suffered the greatest loss yesterday. The FBM KLCI dropped for a fourth day, losing 17.25 points or 1.3%, to close at 1,265.77, the steepest declines since August 17, 2009. Market breadth was negative with losers led gainers by 618 to 168 while 215 counters were unchanged. Turnover dropped to 1.082 billion shares worth RM1.827 billion.

Chart wise, the FBM KLCI formed a bearish long black candlestick which signifies continuation of the downward move. MACD has crossed below its signal line signifying short term correction. RSI(14) at 36 has turned bearish, and Stochastic at 19 is very weak and has just fell into the short term oversold zone. The conditions of the indicators are pointing to a bearish scenario and there might be further downside to come.

The benchmark FBM KLCI has turned bearish for the short term as it has broken the 30 and 60-day moving average (MA) support. The 5-day MA has just crossed below the 10-day MA indicating short term correction, nonetheless, the longer term uptrend is still intact as indicated by the long term 60 and 120-day MA that are still pointing northeast.

As the index move southward, the next level of support is expected at 1256 and 1248. The long term 100 and 120-day MA support lies at 1253 and 1240. To remain in the long term uptrend, the index should not break below the 1240 level.

Today, the FBM KLCI is likely to trade within a range of 1248 to 1280.

This week's expected range: 1270 – 1320
Today’s expected range: 1248 – 1280

Resistance: 1270, 1275, 1280
Support: 1248, 1255, 1260

A black day.

Stocks on Bursa Malaysia extended their losses on Tuesday, in line with regional bourses sell down. The FBM KLCI opened positive but lost ground as the day progressed, and slid sharply after the mid-day break to hit an intra-day low of 1278.10 before rebounding to close off low at 1283.02, losing 13.77 points or 1.06%. Losers overwhelmed gainers by 708 to 152 while 183 counters were unchanged. Volume traded increase to 1.250 billion shares worth RM1.654 billion compared with 996 million shares worth RM1.131 billion on Monday.

Chart wise, the FBM KLCI formed a bearish long black candlestick which reflected the panic sell down in index-linked counters. The benchmark index found support at the 30-day moving average (MA) of 1282 as it bounds to close above it. The next level of critical medium term support is at the 1277 to 1273 zone provided by the 50 and 60-day MA, if the index closes below the 1273 level, it would have become bearish for the medium term technically and more downside can be expected.

On the technical indicators, MACD has crossed below its signal line confirming the short term correction. RSI(14) has crossed below its 50 level, and is short term bearish. Stochastic is also below its 50 level, signifying more downside to come.

Based on the technical signals, the FBM KLCI is short term bearish, neutral in the medium term and the long term is still bullish.

Today, the FBM KLCI is likely to trade within a range of 1270 to 1293.

This week's expected range: 1270 – 1320
Today’s expected range: 1270 – 1293

Resistance: 1286, 1290, 1293
Support: 1270, 1275, 1278

FBM KLCI formed Dragon Fly Doji - bottom?

Stocks on Bursa Malaysia suffered further losses yesterday following the slide on Wall Street last week. The FBM KLCI opened with a 3 points gap down and trade lower to hit the intra-day low of 1292.76 before last minute bargain hunting pushes the benchmark index off low to close 3.66 points or 0.28% lower at 1296.79. Market breadth was negative with losers led gainers by 441 to 266 and 251 counters were unchanged. Volume dropped to 996 million shares worth RM1.131 billion.

Chart wise, the FBM KLCI formed a dragon fly shape Doji candlestick which indicates buying support despite the index falling. The formation of this candlestick may also signify possible bottom in a downtrend. The key index has fallen below the 10-day moving average which indicates a reversal of the short term uptrend since its breakout from the consolidation in late November 2009.

MACD has turned down and is resting right on its signal line, indicating a loss in momentum. The continued slide down of RSI and Stochastic also reflected the short term correction scenario. However, no major bearish signal is generated yet, as all the indicators are still in their respective bullish territory.

The fall of the FBM KLCI might just be a healthy correction to the uptrend, and in fact, should be viewed as an opportunity to collect quality shares at lower prices.

Today, the FBM KLCI is likely to trade within a range of 1289 to 1302.

This week's expected range: 1270 – 1320
Today’s expected range: 1289 – 1302

Resistance: 1298, 1300, 1302
Support: 1289, 1291, 1294

Choppy market ahead

Stocks on Bursa Malaysia fell on last Friday, Jan 22, in tandem with regional bourses after the Dow plummeted overnight on concerns over the proposed new regulations for the US banking sector. The FBM KLCI opened low at 1303.43 and fell almost twelve points to an intra-day low of 1296.44 before last minute buying which lifted the benchmark index off low to end 7.91 points or 0.6% down at 1300.45. Decliners outpaced gainers by 531 to 245 while 230 counters were unchanged. Volume was lower at 1.008 billion shares worth RM1.381 billion.

Week-on-week, the FBM KLCI made a 1.87 points gain and close above the 1300 psychological level since the rally started in April 2009. The index hit an intra-week high of 1308.52 before profit-taking activities sent it lower to close at 1300.45. From the weekly chart perspective, the FBM KLCI is still on the uptrend, as it still closed above the 10-week moving average (MA) which has been supporting the uptrend so far since April 2009. Immediate support render by the 10-week MA is at 1277.

Weekly MACD continued to stay below its slow MACD; nonetheless, their gap is narrowing as indicated by the shorter histogram, which signaled a gradual pickup in momentum. Weekly RSI at 74.7 is still in the very bullish zone. Weekly Stochastic at 92.9 continued to stay above it slow Stochastic and is within its bullish zone.

From the weekly chart perspective, the FBM KLCI is still in its uptrend until it close below the 10-week MA which is now at 1277.


On the Daily chart, the FBM KLCI formed a hammer-like black candlestick. It opened with a gap down from last Thursday’s closed and hit an intra-day low of 1296.44 before rebounding to close off low at 1300.45. The 10-day MA has provided immediate support at 1298, if the index close below the immediate support level, then there is this strong likelihood that it may correct further downward to the 1280 level. Even, if the index comes down to 1280 level, it is still considered a normal correction with reference to the underlying longer term uptrend.

On the indicators, daily MACD has hooked down, and so are RSI and Stochastic, reflecting the pulled back of the index. RSI hooked down more rapidly to close below the 70 mark, and indicate a weakening in the market strength for the short term. There is, however, no danger signals as yet from the indicators.

On the backdrop of the US DJIA’s sharp fall last week, the FBM KLCI is expected to go into a consolidation mode this week, and will follow the performance of the regional bourses in the absence of fresh new leads locally.

For this week, the FBM KLCI is likely to trade within a range of 1270 to 1320. As for today, it is likely to trade within a range of 1289 to 1307.

This week's expected range: 1270 – 1320
Today’s expected range: 1289 – 1307

Resistance: 1303, 1305, 1307
Support: 1289, 1293, 1296

Stock to watch: KURASIA

FBM KLCI closed higher amidst weakness on regional bourses

Stocks on Bursa Malaysia traded mixed and were broadly lower yesterday, affected by Wall Street’s performance overnight as the Dow suffered more than hundred points dropped, but the benchmark index was lifted by gains in financial stocks. The FBM KLCI opened 3.03 point lower at 1303.59, but gradually recovered its lost ground to close 1.74 points or 0.13% higher at 1308.36. Losers outpaced gainers by 573 to 203 while 240 counters were unchanged. Turnover dropped further to 1.065 billion shares worth RM1.378 billion.

Chart wise, the FBM KLCI formed a small body white candlestick which indicates a continuation of the uptrend and buying support, as it opened at the lowest point of the day and move upward to close near the highest point of the day. The index continued to stay above the short term 5 and 10-day moving averages. MACD, RSI and Stochastic continued to climb higher, reflecting the continued upward move of the key index. The narrow day range of the FBM KLCI, however, reflected the cautiousness of the market as it comes above the 1300 mark.

With the bullish undertone as reflected by the indicators, the benchmark FBM KLCI is expected to continue moving higher to challenge resistances at higher levels.

Today, the FBM KLCI is likely to trade within a range of 1298 to 1315.

This week's expected range: 1275 – 1315
Today’s expected range: 1298 – 1315

Resistance: 1310, 1312, 1315
Support: 1298, 1301, 1305

FBM KLCI at 20 months high

Stocks on Bursa Malaysia traded mixed yesterday while the FBM KLCI marched higher to continue its uptrend, amidst a weaker regional market. Sentiment of the local market was boosted by the good earnings result of Public Bank on top of the strong overnight gains of the DJIA. The FBM KLCI opened higher on Thursday and traded in the positive territory throughout the day, it ended 6.27 points or 0.48% higher at 1306.62, breaching the 1305 level registered on April 29, 2008. Market breadth was negative with losers outpaced gainers by 467 to 333 while 249 counters were unchanged. Volume traded was higher at 1.339 billion shares worth RM1.806 billion.

Chart wise, the FBM KLCI formed a bullish white candlestick which indicates continuation of the uptrend. The key index breakthrough the 1305 resistance level with a bit of struggle as it move up and down the level a number of times during the day, the Bull, however, managed to bring it above the 1305 resistance level at the close.

MACD continued to move higher, indicating a gradual pickup in momentum. RSI(14) at 73 is turning very bullish and has stepped into the short term overbought zone. Stochastic at 94.6 continued to stay in the bullish or so called overbought zone. The underlying trend as indicated by the short, medium and long term moving averages continued to be up. With the bullish undertone, the benchmark FBM KLCI is expected to continue moving higher to challenge resistances at higher levels.

Today, the FBM KLCI is likely to trade within a range of 1296 to 1315.

This week's expected range: 1275 – 1315
Today’s expected range: 1296 – 1315

Resistance: 1309, 1312, 1315
Support: 1296, 1298, 1302

Stock to watch: PROTON

FBM KLCI back to 1300

Stocks on Bursa Malaysia traded mixed yesterday on cautious sentiments amid weaker regional markets and a lack of fresh new leads. The FBM KLCI opened 0.39 point higher and hit an intra-day high of 1302.36 on selective buying of key blue-chips, profit-taking activities sent the benchmark index back below the psychological 1300 mark. A last minute spurt of buying lifted the index 2.36 points or 0.18% higher to close at 1300.35. Market breadth was negative with losers led gainers by 409 to 345 while 279 counters were unchanged. Volume rose marginally higher to 1.268 billion shares worth RM1.446 billion compared with 1.247 billion shares on Monday.

Chart wise, the FBM KLCI formed a small body white candlestick which indicates low volatility and lack of momentum; this is reflected by the marginally increased in the volume turnover. The resistance zone at 1300 to 1305 would require a little more enthusiasm or volume to break, nonetheless, the benchmark index has already closed at the 1300 mark after two previous attempts that failed. The index would continue to test the April 29, 2008 pivot high of 1305, if successful, the next higher upside target would be 1354.

The technical conditions of the indicators are positive, with MACD, RSI and Stochastic climbing higher, and are all in the bullish territory, with no worrying signs yet. The moving averages, a trend indicator, too are pointing northward.

The market is awaiting a certain catalyst to make a firm breakthrough above its 1305 resistance level, and the general market will still likely be dominated by smaller cap counters with rotational play.

Today, the FBM KLCI is likely to trade within a range of 1294 to 1306.

This week's expected range: 1275 – 1315
Today’s expected range: 1294 – 1306

Resistance: 1302, 1304, 1306
Support: 1294, 1296, 1298

KLCI consolidate, small cap on rotational play

Stocks on Bursa Malaysia opened weaker yesterday following the sharp drop of DJIA on last Friday, but soon regained the earlier losses to close of their lows. The FBM KLCI opened 12.33 points lower at 1286.25, and soon regained much of its lost ground, but was trading in the negative territory most of the day. It closed 0.59 point or 0.05% lower at 1297.99. Market breadth was quite even with 396 gainers to 361 losers, while 252 counters were unchanged. Total turnover was lower at 1.247 billion shares valued at RM1.426 billion.

Chart wise, the FBM KLCI is still hovering in its sideways range of 1286 to 1300. Its close is still remained above the short term 10-days moving average, as well as above the longer term moving averages, indicating that the uptrend is intact.

MACD continued to climb higher, and so is Stochastic, but RSI hooked down slightly, reflecting the sideways mode. Nonetheless, they are all in the bullish territory, with no worrying signals yet.

The market is awaiting a certain catalyst to make a firm breakthrough above its 1300 psychological resistance level, and the general market will still likely be dominated by smaller cap counters with rotational play

Today, the FBM KLCI is likely to trade within a range of 1290 to 1305.

This week's expected range: 1275 – 1315
Today’s expected range: 1290 – 1305

Resistance: 1300, 1303, 1305
Support: 1290, 1293, 1295

Testing of the psychological resistance zone of 1300-1305

Stocks on Bursa Malaysia traded mixed last Friday, Jan 15, with the FBM KLCI advancing to test the 1300 key psychological resistance level while profit-taking activities continued to take place on stocks that has gained over the week, especially smaller cap and rubber gloves stocks. The gain in the benchmark index was help by gains in BAT, Public Bank, Tanjong plc, and Genting. There was also considerable interest in technology stocks, with MPI and Unisem among the day’s major gainers.

The benchmark FBM KLCI closed last Friday 3.8 points or 0.3% higher at 1298.58. On a week-on-week basis, the index posted 5.6 points or 0.43 % gains. Market breadth was negative with losers led gainers by 467 to 326, while 255 counters were unchanged. Daily volume was lower at 1.677 billion shares worth RM1.919 billion. Weekly volume, however, increase to 8.0142 billion shares compared with 7.1614 billion shares the week before.

On the weekly chart, the FBM KLCI formed a small white candlestick, which indicates the continuation of the upward move but was lacking in momentum as indicated by its small range. The index is facing a strong resistance at the 1300 psychological level; it tested the level on an intra-day basis but pulled back on heavy selling coming to it. The uptrend continues as the index move further up from the 10-week moving average.

Weekly MACD starts to turn up, as indicated by the shorter histogram. Weekly RSI(14) at 74.45 is in the very bullish zone and weekly Stochastic at 90 compared with 82.7 the week before indicates continuation of the bullishness.


On the daily chart, the FBM KLCI remained trapped in the sideways zone of 1288 to 1300 for the last eight days. However, it can be seen that the benchmark index is making an attempt to test the upper psychological resistance level of 1300. It tested but failed; however, it did close at the highest level since the beginning of the uptrend in April 2009 and was back to the May 2008 level. It was indeed an impressive run for the FBM KLCI.

On the indicators, they were all positive. The moving averages, MACD, RSI, and Stochastic all continued to move up, indicating the continuation of the bullish trend.

The market is expected to remain bullish this week with rotational play. The FBM KLCI is likely to re-challenge its psychological resistance zone at 1300-1305 this week. For this week, the benchmark index is likely to trade within a range of 1275 to 1315, and for today, it is likely to trade within a range of 1290 to 1305.

This week's expected range: 1275 – 1315
Today’s expected range: 1290 – 1305

Resistance: 1301, 1303, 1305
Support: 1290, 1293, 1295

FBM KLCI - Back to the sideways zone

Stocks on Bursa Malaysia traded firmer on Thursday as regional markets recovered from the fall on Wednesday, which was triggered by the worries over China’s move to tighten its monetary policy. The FBM KLCI opened 0.99 point higher and traded in the positive territory throughout the day and ended 5.2 points or 0.4% higher at 1294.71. Market breadth was positive with gainers led losers by 575 to 230, while another 230 counters were traded unchanged. Volume increase to 1.755 billion shares worth RM2.063 billion compared with 1.499 billion shares worth RM1.714 billion the previous day.

Chart wise, the FBM KLCI formed a bullish white candlestick which indicates reversal from the previous day’s fall. The benchmark index has now gone back to its sideways range formed earlier, which is bounded on top by the strong psychological resistance at 1300 and the immediate support below at 1288. The underlying uptrend in still intact and the benchmark index is poised to break the 1300 mark in the very near term.

MACD curved up slightly, but its histogram continued to fall, reflecting the weak momentum of the key index. RSI at 66.5 just hooked up, is still in the bullish zone. Stochastic, however, continued to slide down but remained above the 80 level. The mixed signals of the indicators reflected the consolidation mode of the benchmark index.

Today, the FBM KLCI is likely to trade within a range of 1286 to 1300.

This week's expected range: 1260 – 1330
Today’s expected range: 1286 – 1300

Resistance: 1296, 1298, 1300
Support: 1286, 1288, 1291

FBM KLCI - Correction

Stocks on Bursa Malaysia ended easier yesterday on profit-taking activities in heavyweights with Nestle leading the fall, while second and third liners still remained active with glove makers and Sarawak based counters top the gainers list. The FBM KLCI opened in the red and traded lower taking cue from Dow’s overnight fall, it ended the day 3.34 points or 0.26% lower at 1289.51 after falling 6.41 points to the intra-day low of 1286.44. Losers led gainers by 436 to 366, while 213 counters were unchanged. Total volume was slightly lower at 1.499 billion shares worth RM1.714 billion.

As it was mentioned in Wednesday’s analysis that the FBM KLCI may be under some distribution pressure, it was indeed proven true with yesterday’s price action of the benchmark index which confirmed the possible short term distribution of index link heavyweights at 1292 to 1295 level. The index found strong support at the 1288 level by closing above it after testing the 1286 level which was supported by the 10-day moving average.

MACD continued to slide down, with its histogram falling further indicating the weakening of market momentum and correction to its earlier gain. RSI dipped further down to 63 have not turn bearish yet. Stochastic at 82 has crossed below its slow stochastic indicating a correction.

The FBM KLCI was supported by the 10-day moving average at 1286 level, if the index continue to fall and break below the 1286 level, it might fall further to the 1278 – 1280 level.

Today, the FBM KLCI is likely to trade within a range of 1280 to 1299.

This week's expected range: 1260 – 1330
Today’s expected range: 1280 – 1299

Resistance: 1293, 1296, 1299
Support: 1280, 1283, 1286

Stock to watch: EVERGRN

FBM KLCI - Consolidation or toppish?

Stocks on Bursa Malaysia traded mixed yesterday with key heavyweight stocks in the consolidation mode, while the second and third liners were actively traded with focus on glove makers, healthcare and hard disk drive makers. The FBM KLCI opened positive, but slipped into the negative territory soon after where it stayed there for the rest of the day, and ended 1.66 point or 0.13% lower at 1292.85. Market breadth was positive with gainers outpaced losers by 483 to 275, while 248 counters were unchanged. Volume rose to 1.68 billion shares worth RM1.777 billion from 1.40 billion shares worth RM1.542 billion the day before.

Chart wise, the FBM KLCI traded in a narrow range of 4.72 points and formed a small body black candlestick which indicates consolidation. The key index has been staying in this level for the last five days, and sideways congestion at high level can be bad as it may also indicate possible distribution. Moreover, out of five candles, three were black candles, which indicate some selling pressure at this level.

MACD turned flat, while its histogram already turned shorter indicating a loss in market momentum. RSI hooked down slightly, and Stochastic is flat. The mixed signals from the indicators reflected the sideways consolidation of the index.

Today, the FBM KLCI is likely to trade within a range of 1286 to 1300.

This week's expected range: 1260 – 1330
Today’s expected range: 1286 – 1300

Resistance: 1296, 1298, 1300
Support: 1286, 1288, 1291

FBM KLCI in consolidation mode.

Stocks on Bursa Malaysia traded mixed yesterday with the focus mainly on second and third liners in the active list, with rubber glove makers still top the gainers list, LATEXX-WA +0.53 @3.45, LATEXX +0.45 @3.92 and IRCB +0.395 @1.34. The FBM KLCI traded in a narrow range of 5.4 points ended 1.5 points or 0.1% higher at 1294.51, the highest close since May 16, 2008. Gainers led losers by 476 to 292, with 222 counters unchanged. Volume increased to 1.4001 billion shares worth RM1.5429 billion.

Chart wise, the FBM KLCI formed a small body white candlestick which indicates low volatility and consolidation. In fact, the index had been trading at this level for the last four days, consolidating its gains after the run up since last Monday, Jan 4. It is bounded on top by the resistance at 1300 and below by the support at 1288.

MACD continued to move higher, while its histogram dropped slightly. RSI at 69.4 continued to climb up is near the short term overbought zone of 70. Stochastic slide down slightly to 84.7 is still in the bullish zone. The mixed signals of the indicators reflected the current consolidation. The underlying trend as indicated by the longer term moving averages is still up.

Today, the FBM KLCI is likely to trade within a range of 1286 to 1300.

This week's expected range: 1260 – 1330
Today’s expected range: 1286 – 1302

Resistance: 1297, 1299, 1302
Support: 1286, 1288, 1291

Good start for the New Year.

Stocks on Bursa Malaysia kicked off the New Year with a rally on the first week of the year and sent the benchmark index to close higher. The FBM KLCI opened the New Year near the low of 1272.31 and rallied to an intra-week high of 1299.70 before profit taking activities bring it down to close the week at 1292.98, posting a week-on-week gain of 20.20 points or 1.59%. Weekly volume surged to a high of 7.1614 billion shares compared with 2.2237 billion shares the week before, indicating the returned of buying interest.

On the weekly chart, the FBM KLCI formed a bullish white candlestick and made a breakthrough above the resistance level of 1288.42 after seven weeks of consolidation. With the increase in volume, it may propel the index to move higher this week.

Weekly MACD turned flat, whereas its histogram has started to turn up indicating a gradual picking up of market momentum. Weekly RSI at 73.6 has hooked up and is gaining strength, and weekly Stochastic too has hooked up to cross above the 80 mark, back to the bullish zone.


On the daily chart, the FBM KLCI formed a small body black candlestick on last Friday, indicating profit taking and consolidation after a strong rally since last Monday. It is supported below at 1288 and capped above by the resistance at 1300.

Daily technical indicators are all positive. MACD continued to move higher but its histogram dropped slightly reflecting the pulled back of the index after hitting the intra-week high of 1299.70. RSI at 68 remained strong, whereas Stochastic has crossed below its slow Stochastic, reflecting the consolidation. The underlying uptrend as indicated by the moving averages is intact.

With the upbeat mood in market sentiment, and the Dow Jones Industrial Average charting a new high of 10618.19 on last Friday’s close, the benchmark KLCI is expected to move higher to re-challenge the 1300 mark this week.

This week, the FBM KLCI is likely to trade within a range of 1260 to 1330. As for today, it is likely to trade within a range of 1286 to 1300.

This week's expected range: 1260 – 1330
Today’s expected range: 1286 – 1300

Resistance: 1295, 1298, 1300
Support: 1286, 1288, 1291

Stock to watch: L&G, LBS

Profit taking and top reversal candle formation

Stocks on Bursa Malaysia traded broadly lower yesterday after three days of rally. The FBM KLCI touched an intra-day high of 1299.70, a fresh 20-month high, before closing 1.75 point or 0.14% lower at 1291.42. Market breadth was negative with losers led gainers by 449 to 324, while 231 counters were unchanged. Volume was lower at 1.474 billion shares worth RM1.899 billion.

As mentioned in yesterday’s report that the FBM KLCI would test the psychological level of 1300, in fact, it did come near to it with just 0.3 of a point short to hit it, and heavy profit taking sets in, with that the FBM KLCI formed a black candlestick with long upper shadow, a top reversal signal, which indicates sellers were dominant. The market would take the opportunity to take profit when the index comes near the psychological resistance level of 1300, and more so with the hefty gains after three days of rally.

MACD continued to move higher, whereas RSI hooked down slightly, and Stochastic has just crossed below its slow Stochastic, together with the black candlestick with a long upper shadow they indicate an impending profit taking correction is ahead. The index would, however, find strong support at the 1288 and 1280 levels. The underlying trend as indicated by the longer term moving averages is still up.

Today, the FBM KLCI is likely to trade within a range of 1280 to 1303

This week's expected range: 1248 – 1300
Today’s expected range: 1280 – 1303

Resistance: 1297, 1301, 1303
Support: 1280, 1284, 1288

FBM KLCI - continue to move up

Stocks on Bursa Malaysia climb higher for the third consecutive days yesterday despite profit taking activities. The rise in major regional bourses and bullish outlook for global economy help boost the buying momentum, buying of selected key heavyweights in the afternoon session pushed the FBM KLCI to close higher at 1293.17, rising 4.93 points or 0.38%. Gainers outpaced losers by 452 to 299 with 239 counters unchanged. Volume traded remained strong at 1.656 billion shares worth RM1.813 billion.

Chart wise, the FBM KLCI had made a confirmed breakout from its recent consolidation and resumed its uptrend, which is confirmed by the crossing of the 10-days short term moving average above the medium term 30-days moving average. The benchmark index hit an intra-day high of 1296.44 before pulling back to close at 1293.17, and is now above the high of 1288.42 registered on 17 Nov 2009. MACD continued to move higher, indicating the increase in upward momentum. RSI at 69.68 is bullish, and Stochastic at 94 continued to stay in the bullish zone.

With the bullishness and active volume, the FBM KLCI may continue to move higher to test the psychological resistance at 1300.

Today, the FBM KLCI is likely to trade within a range of 1285 to 1305

This week's expected range: 1248 – 1300
Today’s expected range: 1285 – 1305

Resistance: 1297, 1301, 1305
Support: 1285, 1288, 1290

Volume surges on active trading

Stocks on Bursa Malaysia closed broadly higher yesterday taking cue from Wall Street’s strong gains overnight, with the DJIA rising 156 points on the first day of the New Year. The FBM KLCI opened with a gap up of 2.51 point at 1278.26 and traded higher to chart an intra-day high of 1290.55 before closing at 1288.24 with a gain of 12.49 points or 0.98%, the highest close since May 16, 2008. Market breadth was positive with gainers leading losers by 658 to 184, while 180 counters were unchanged. Volume surges to a fresh high of 1.863 billion shares worth RM1.984 billion. The high volume was contributed by active trading in the lower liners.

Chart wise, the FBM KLCI formed a bullish white candlestick with a breakaway gap which denotes strong buying interest. It tested the high of 1288.42 which was charted on Nov 17, 2009 and closed 0.18 of a point below it, signifying strong resistance of the level. MACD continued to climb higher indicating a pickup in market momentum. RSI at 67 has turned bullish, and Stochastic too is in the bullish zone.

With the bullishness of all the indicators and strong volume, the FBM KLCI is likely to test the 1300 level soon.

Today, the FBM KLCI is likely to trade within a range of 1278 to 1298

This week's expected range: 1248 – 1300
Today’s expected range: 1278 – 1298

Resistance: 1291, 1295, 1298
Support: 1278, 1281, 1285

Stock to watch: HIL

Market turning active

Stock prices on Bursa Malaysia ended broadly higher on the first day of the New Year as players returned to the market after the long year end holiday. The FBM KLCI opened 0.47 point lower and was in the red for a short period in the morning, it then turned positive and stayed there throughout the day and closed with a gain of 2.97 point or 0.23% at 1275.75. Market breadth was positive with gainers led losers by 579 to 159, while 190 counters were unchanged. Volume pickup significantly to 1.13 billion shares worth RM990 million compared with 602 million shares valued at RM842 million last Thursday.

The FBM KLCI closed at the highest point for yesterday forming a bullish continuation candlestick after the formation of a hammer candlestick last Thursday. MACD continued to move higher indicating a gradual pickup in momentum. RSI at 59 is also starting to turn strong, and Stochastic at 88 remained bullish. These market signals indicate follow through in buying which may lead into attempt to challenge higher level of resistance today.

The underlying longer term trend as indicated by the 60 and 120 days moving average remained up.

Today, the FBM KLCI is likely to trade within a range of 1270 to 1281

This week's expected range: 1248 – 1287
Today’s expected range: 1270 – 1281

Resistance: 1277, 1279, 1281
Support: 1270, 1271, 1273

Stock to watch: E&O

Happy New Year 2010.

Stock prices on Bursa Malaysia ended last Thursday, 31st December 2009, the last trading day for the year firmer. As it happened that the last three weeks of December were holiday-shortened weeks with holiday falling on three Fridays consecutively, the local bourse was very much in a consolidation mode. The FBM KLCI ended the last trading day of the year firmer at 1272.78, with a day-to-day gain of 1.66 point or 0.13%. On a week-on-week basis, it gained 8.84 points or 0.7%.

The FBM KLCI had a good recovery last year where it rebounded from the year low of 836.51 on 12th March 2009 to its year high of 1288.42 on 17th November 2009, registering a trading range of 451.91 points. On a year-on-year basis, the benchmark index made a gain of 396.03 points or 45.17% when compared with its closing of 876.75 on 31st December 2008. This made the FBM KLCI ranked second from the bottom of the performance list of Asia-Pacific stock markets. The Nikkei 225 Index was last on the list with 19.04%. Sri Lanka's Colombo All Share Index was the best performing market with a year-on-year gain of 125.25% while the rest of the stock markets recorded year-on-year gains exceeding 50%, except Tokyo and Bursa Malaysia.

On the weekly chart, the FBM KLCI formed a bullish white candlestick with a closed on a four week’s high. It was still trapped in a sideways consolidation range of 1248 to 1288, supported immediately by the 10-weeks moving average (MA). The longer term underlying trend as indicated by the 30 weeks MA is still up.

Weekly MACD continued to slide down indicating the slowing of market momentum. The weekly RSI at 70.37 hooked up slightly is still in the bullish zone, and the weekly Stochastic also hooked up slightly but still below its slow Stochastic. Signals from the indicators reflect the consolidation mode of the FBM KLCI, however, the indicators are still very much in the bullish zone respectively.

Looking forward, the market sentiment is likely to remain upbeat in the first half of 2010, and the FBM KLCI may trade higher with a target of 1350 for the first half year and 1400 to 1450 as the target for the whole year.

For the coming week, the FBM KLCI is likely to trade within a range of 1248 to 1287. As for today, it may trade within a range of 1260 to 1281.

This week's expected range: 1248 – 1287
Today’s expected range: 1260 – 1281

Resistance: 1275, 1278, 1281
Support: 1260, 1265, 1268