The month of February was indeed a roller coaster month for Bursa Malaysia as sentiments was weighed down by external factors such as China’s move to tighten liquidity, Greece’s sovereign debt woes and US raising the discount rate.
Last week, sentiment on Bursa Malaysia was buoyed by the stronger than expected GDP growth in the last three months of 2009, where Malaysia’s GDP grew 4.5% y-o-y in the fourth quarter of 2009.
The FBM KLCI registered a gain of 13.11 points or 1.04% w-o-w to close the week at 1270.78 after hitting an intra-week high of 1277.66 on Thursday. Weekly turnover increased to 2.78 billion shares valued at RM4.98 billion from 1.767 billion shares valued at RM3.175 billion end of the previous week.
On the weekly chart, the FBM KLCI formed a bullish white candlestick and continued to move higher. It tested the resistance zone from 1265 to 1278 last week when it charted an intra-week high of 1277.66 before pulling back on profit-taking to close at 1270.78. The benchmark index has closed above the 5-week moving average (MA), but was still capped by the 10-week MA at 1272, while the underlying 30-week MA continued to give support at 1245.
Weekly MACD continued to slide lower but the histogram has turned shorter, indicating the slowing of the downward momentum. Weekly RSI(14) at 61 has move back to the bullish zone from the mildly bullish zone three weeks ago. Stochastic has just crossed its slow stochastic indicating there could be more upside to come. Signals from the indicators are indicating that the index is slowly turning bullish from its earlier bearish outlook.
On the daily chart, the short term trend of the FBM KLCI is up, the medium term trend is sideway and the longer term trend is still up. The benchmark index is now capped by the resistance zone from 1275 to 1280 on top, and supported below at 1245 to 1260. If it is able to break above the 1280 level convincingly with good volume, it might rally to re-test the 1300 level. If it breaks below the 1245 level, then it might move downward to test the support at 1224.
For this week, the FBM KLCI is likely to trade within a range of 1245 to 1295, and for today it is likely to trade within a range of 1260 to 1285.
This week's expected range: 1245 – 1295
Today’s expected range: 1260 – 1285
Resistance: 1275, 1280, 1285
Support: 1260, 1265, 1268
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