Stocks on Bursa Malaysia went through a roller-coastal ride last week, as the benchmark FBM KLCI slid to a four month low on worries over Greece’s debt crisis, liquidity tightening in China and the US employment data. The market rebounded later on grounds that other EU countries are likely to bailout Greece, lower than expected China's inflation and lower-than-estimated US jobless claims.
The FBM KLCI continued its fall on last Monday and hit the intra-week low of 1224.37 on Tuesday before rebounding to close last Friday at 1253.39, making a gain of 5.49 points or 0.44% week-on-week. Daily average volume and value dropped to 673 million shares worth RM1.11 billion, compared with the 883.2 million shares and RM1.25 billion average the previous week.
On the weekly chart, the FBM KLCI formed a bullish hammer candlestick which signified the possible bottom of the current downtrend at 1224 as it found support on the 30-week moving average and might stage a reversal this week. As the index reverses up, it is faced with many resistances at various levels, first is the gap at 1265 and second the 1272 level formed by the 5 and 10-week moving averages.
Weekly MACD continued to slide downward indicating the increased in downward momentum. Weekly RSI at 56.8 has leveled-off and is near neutral. Weekly Stochastic is still heading southward. The signals from the indicators simply reflect the current correction mode of the benchmark index.
Technically, the FBM KLCI might continue its upward move, but is faced with strong resistances at 1265, 1272 and 1278. In order for the benchmark index to reverse its current short term downtrend, it will have to move above the 1278 level which is the current level of the 30-day moving average.
For this holiday-shortened week, the FBM KLCI is likely to trade within a range of 1224 to 1285. For today, it is likely to trade within a range of 1246 to 1265.
This week's expected range: 1224 – 1285
Today’s expected range: 1246 – 1265
Resistance: 1257, 1260, 1265
Support: 1246, 1248, 1251
Stock to watch: 3A, SUPERMX
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