FBM KLCI - rebounded and back to consolidation zone

Stocks on Bursa Malaysia ended steadier yesterday, recovering some lost ground following the fall in the previous day, aided by the positive close of the Dow overnight. The FBM KLCI traded in a very narrow range but was in the positive territory throughout the day and closed 2.69 points or 0.2% higher at 1335.86. Losers led gainers by 363 to 347 while 279 counters were unchanged. Volume stayed around 898 million shares valued at RM987 million.

Chart wise, the FBM KLCI formed a bullish white candlestick which is a follow-through up move from the previous day’s price action. The key index is back into its consolidation zone, and was met with resistance at the 1337 level, as mentioned in yesterday’s report. It may continue to drift in the consolidation zone while waiting for any market moving positive leads.

MACD continued to slide lower reflecting the current consolidation mode of the key index. RSI(14) at 56.4 rebounded slightly, is still in the neutral zone. Stochastic, however, has hooked down and just crossed its slow Stochastic. Mixed signals from the indicators reflected the consolidation mode of the benchmark index.

For the short term, the FBM KLCI is expected to be in sideways consolidation, while the underlying medium and longer term trend still remained up.

The FBM KLCI is bound on top by the immediate resistance zone at 1340 to 1347; it will need some extra market moving impetus to breakthrough this zone to move to a higher level. The key index is supported below at 1328 to 1330.

In view of a lack of market moving impetus, the benchmark FBM KLCI will continue its consolidation and track the performance of regional bellwether indices, while the second and third liners will be on rotational play.

Today, the FBM KLCI is likely to trade within a range of 1329 to 1341.

This week's expected range: 1308 – 1358
Today’s expected range: 1329 – 1341

Resistance: 1337, 1339, 1341
Support: 1329, 1331, 1333

FBM KLCI - down on Eurozone woes

Stocks on Bursa Malaysia ended broadly lower yesterday, in line with weak performance of regional market amid concerns over Greece’s deteriorating debt situation and Dow’s 213 points fall overnight. The FBM KLCI lost 6.55 points to close at 1,333.17 after opening 9.19 points lower at 1,330.53. The benchmark index lost up to 15.38 points in the morning but recovered much of its lost ground. Losers outpaced gainers by 472 to 236 while 276 counters were unchanged. Turnover was lower at 831 million shares worth RM1.117 billion.

The FBM KLCI opened yesterday on fear with a down gap of 9.19 points at 1330.53 and lost up to 15.38 points when it hit the intra-day low of 1324.34 in the early part of the morning. The key index recovered much of its lost ground as buying support came in and pushed the index to its intra-day high of 1335.95 before last minute profit taking sent it lower to close at 1333.17. The price action of the key index formed a white spinning-top like candlestick with a longer lower shadow which indicates the bulls were in control of yesterday’s battle after losing ground earlier.

The FBM KLCI is now trapped with overhead resistance at 1335 to 1337 post by the 5 and 10-day moving average (MA) and supported below by the 30-day MA at 1327 when it rebounded off it. Hence, the key index might continue to consolidate in its earlier consolidation range of 1330 to 1344.

MACD dropped further, indicating the increase in downward momentum. RSI(14) at 54.35 dropped further and is into the neutral zone now. Stochastic has hooked down, albeit has not crossed its slow Stochastic. Signals from the indicators are pointing towards further consolidation of the key index.

The short term trend as indicated by the 5 and 10-day MA is now sideways, while the underlying medium to longer term uptrend still remained intact.

In view of a lack of market moving impetus, the benchmark FBM KLCI will continue to consolidate and track the performance of regional bellwether indices, while the second and third liners will be on rotational play.

Today, the FBM KLCI is likely to trade within a range of 1322 to 1345.

This week's expected range: 1308 – 1358
Today’s expected range: 1322 – 1345

Resistance: 1337, 1341, 1345
Support: 1322, 1326, 1331

FBM KLCI - Doji

Stocks on Bursa Malaysia ended broadly lower yesterday in tandem with weak performances of regional markets on renewed concerns over Greece’s debt crisis and China’s credit tightening measures. The FBM KLCI was in the red throughout the day and traded in a narrow range of about three points, it closed marginally lower on late buying of selected key heavyweights to end 0.35 point or 0.03% lower at 1339.72. Losers outpaced gainers by 502 to 178 while 308 counters were unchanged. Volume traded was higher at 975 million shares valued at RM1.194 billion.

The FBM KLCI opened 0.5 point lower and was in the red throughout the day before late buying of blue-chip stocks pushed the key index to close almost unchanged. It formed a Doji candlestick with a relatively longer lower shadow, the appearance of Doji at a relatively high level is not a very good sign, it indicates uncertainties ahead, and the long lower shadow signaled that the index was under some selling pressure.

MACD continued to slide lower and is still below its slow MACD, indicating the consolidation is still in effect and not over yet. RSI(14) has hooked down slightly and is at the borderline of its bullish zone. Stochastic, however, continued to move higher reflecting the consolidation mode of the index with an upward bias.

The FBM KLCI is currently trapped in a consolidation mode with strong overhead resistance at level above 1340. With no major fresh leads in the local market, the key index will continue to consolidate and track the performance of regional bourses.

Today, the FBM KLCI is likely to trade within a range of 1331 to 1343.

This week's expected range: 1308 – 1358
Today’s expected range: 1331 – 1343

Resistance: 1341, 1342, 1343
Support: 1331, 1335, 1337

FBM KLCI - drifted to close higher

Stocks on Bursa Malaysia traded mixed on a tight range yesterday, gains in selected heavyweights in late afternoon lifted the benchmark index to close higher. The FBM KLCI rose 3.29 points or 0.25% to close at 1340.07 after drifting in a tight range for most part of the day. Gainers led losers by 362 to 306 while another 306 counters were traded unchanged. Volume was lower at 799 million shares valued at RM936 million.

Chart wise, the FBM KLCI formed a white candlestick that closed near its day high indicates the bull is in control. It looks like the key index is trying to move out of its consolidation to climb higher when it close above 1340 after two weeks of consolidation within 1330 to 1339, nonetheless, it is still below its recent high of 1347. Immediate overhead resistance zone remained at 1344 to 1354.

MACD starts to taper-off from its down move as shown by its shorter histogram, indicating the downward momentum is waning off gradually, albeit the MACD is still below its slow MACD. RSI(14) at 61.3 climbs higher and is back into the bullish zone. Stochastic at 63 is higher and has moved into an up cycle.

The FBM KLCI is currently still trap in its short term consolidation zone with an upward bias, whilst the medium to longer term uptrend remained intact.

With no fresh market moving impetus, the FBM KLCI is likely to continue drifting, while the second and third liners will continue to be in rotational play.

Today, the FBM KLCI is likely to trade within a range of 1334 to 1345.

This week's expected range: 1308 – 1358
Today’s expected range: 1334 – 1345

Resistance: 1341, 1343, 1345
Support: 1334, 1336, 1338

FBM KLCI - consolidation with upward bias

Stocks on Bursa Malaysia continued its consolidation last week on the absence of major market moving news. The FBM KLCI opened last Monday with a gap down of 3 points and touched the intra-week low of 1321.25 after DJIA closed 125 points lower the previous week. The benchmark index recovered quickly to close above the 1330 level on Tuesday and stayed in a sideways range from there on to close last Friday at 1336.78, posted a week-on-week gain of 4.01 points or 0.3%. Turnover for the week fell to 4.137 billion shares worth RM5.854 billion from 4.812 billion shares worth RM7.279 billion the previous week.

On the weekly chart, the FBM KLCI formed a white piercing-line candlestick which indicates counter-attack of the bull after the bear sold down stocks on fear; hence, the key index might continue to move higher to challenge the overhead resistance zone at 1344 to 1354. If the key index is able to breakthrough the psychological resistance at 1350, it might continue to move higher to challenge the higher target level at 1380. On the other hand, if the index could not breakthrough the resistance zone, it might just continue to drift in its current sideways consolidation range of 1330 to 1347.

Weekly MACD continued to move higher, albeit on a slow pace, and has just made a golden-cross over its weekly slow MACD, indicating a potential uptrend in the brewing. Weekly RSI(14) at 69.96 has hooked up and is about to move into the very bullish zone. Weekly Stochastic has, however, hooked down reflecting the current correction mode. Signals from the indicators reflected the correction mode of the key index with an upward bias.

The benchmark FBM KLCI is currently above both its short term 5 and 10-week moving average, hence, the short term trend is still up. The underlying medium to longer term uptrend is still remained intact.

This week, the benchmark index is expected to continue its consolidation in the absence of fresh market moving impetus with an upward bias, its direction will likely to track that of the regional markets. Rotational play on selective second and third liners may continue to prevail. As the underlying longer term trend is up, any correction should be viewed as an opportunity to accumulate quality stocks at lower level.

This week, the FBM KLCI may trade within a range of 1308 to 1358, and for today it is likely to trade within a range of 1318 to 1345.

This week's expected range: 1308 – 1358
Today’s expected range: 1331 – 1344

Resistance: 1339, 1341, 1344
Support: 1331, 1333, 1335

An update of the stock picks:

FBM KLCI - weak rebound

Stocks on Bursa Malaysia ended mixed on rotational play in selective heavyweights and lower liners yesterday in the absence of fresh leads. The FBM KLCI rose 3.37 points or 0.25% to close at 1337.01 after drifting in and out the positive and negative territory the whole day. Gainers led losers by 333 to 307 while 324 counters were unchanged. Volume traded was marginally lower at 833 million shares valued at RM1.189 billion.

Chart wise, the FBM KLCI formed a bullish candlestick known as piercing line pattern, which indicates counter attack of the bull. Nevertheless, the key index is still remained trapped in the sideways range of 1330 to 1344.

MACD continued to move lower but at a slower pace as indicated by its slightly shorter histogram, indicating a state of consolidation. RSI(14) at 59.3 has rebounded slightly, is still in the mildly bullish zone. Stochastic, however, has hooked up and cross-over its slow Stochastic after its down cycle started on 8th April, indicating the possible beginning of an uptrend cycle.

The FBM KLCI has now closed above its short term 5 and 10-day moving average, but it need a bigger effort to breakout from its current sideways range in order to trigger another uptrend to challenge the 1350 psychological resistance level. The underlying medium to longer term trend remained up.

In the absence of strong fresh leads, the FBM KLCI is expected to remain in a range-bound state with rotational play on selective second and third liners.

Today, the FBM KLCI is likely to trade within a range of 1328 to 1343.

This week's expected range: 1308 – 1358
Today’s expected range: 1328 – 1343

Resistance: 1339, 1341, 1343
Support: 1328, 1330, 1333

Stock to watch: WCT

An update of the stock picks:

FBM KLCI - mild profit taking

Stocks on Bursa Malaysia ended mixed yesterday with mild profit taking on selected heavyweights. Sentiment was firmer with investors appeared to have shrugged off concerns over the Goldman Sachs suit which triggered the sell off on Monday. The FBM KLCI opened 2.17 points higher at 1338.07 and touched the intra-day high of 1339.15 before profit-taking activities sent the benchmark index into the negative territory to close 2.26 point or 0.17% lower at 1333.64. Market breadth was positive throughout the day. At the close, gainers led losers by 399 to 288 with 300 counters traded unchanged. Volume improved slightly to 875 million shares valued at RM1.292 billion.

Chart wise, the price action of the FBM KLCI formed a bearish dark cloud cover candlestick pattern which indicates sellers were dominant. With this formation, the key index is expected to continue its consolidation, and may find immediate support at the 1330 level.

MACD continued to move lower indicating the downward momentum is still dominant. RSI(14) at 57 again hooked down, and is still in the mildly bullish to neutral zone. Stochastic at 45.5 continued to move lower, indicating the correction cycle is still in place.

The FBM KLCI is now resting on the 5-day moving average (MA), but is just below the 10-day MA, hence, it may faced some continued selling pressure form the short term players. The 20-day MA may provide some support to the key index at 1331, and the crucial support lies at the 30-day MA which is at 1322 currently. The underlying longer term trend is, however, still up

The benchmark FBM KLCI may continue to be in consolidation mode while some second and third liners may continue to be in rotational play.

Today, the FBM KLCI is likely to trade within a range of 1325 to 1344.

This week's expected range: 1308 – 1358
Today’s expected range: 1325 – 1344

Resistance: 1338, 1341, 1344
Support: 1325, 1329, 1331

Stock to watch: JCY

FBM KLCI - stocks rebounded

Stocks on Bursa Malaysia rebounded to close higher yesterday in tandem with regional bourses after Monday’s sell-off caused by the Goldman Sachs suit. The FBM KLCI rose 9.23 points or 0.7% to close at 1335.90. Gainers outpaced losers by 456 to 230 while 293 counters were unchanged. Volume traded was lower at 796 million shares worth RM1.218 billion.

Chart wise, the FBM KLCI formed a bullish white Marubozu candlestick which confirmed the reversal signal issued by the hammer candlestick formed on Monday. With the bullish move yesterday, the benchmark index might continue to move higher to re-challenge the overhead resistance zone at 1340 to 1354. If the index is able to breakthrough the psychological resistance at 1350, it might move on to challenge the next target level at 1380.

MACD continued to move lower, but on a slower pace as shown by the first shorter histogram, indicating a slow down of the downward momentum. RSI(14) at 59 hooked up sharply, is mildly bullish. Stochastic at 47.4 continued to move lower, indicating the down cycle is not over yet. Mixed signals from the indicators indicated that the key index is still in the consolidation.

Short term, the key index might continue to move sideways in a trading range. The medium to longer term trend, however, remained up.

Today, the FBM KLCI is likely to trade within a range of 1325 to 1342.

This week's expected range: 1308 – 1358
Today’s expected range: 1325 – 1342

Resistance: 1338, 1340, 1342
Support: 1325, 1327, 1331

FBM KLCI - short term correction

Stocks on Bursa Malaysia ended broadly lower yesterday in line with losses in regional markets, the Dow’s sharp loss of 125 points last Friday further damped market sentiments. The FBM KLCI opened 3.04 points lower at 1,329.73 and traded to the intra-day low of 1321.25 before bargain hunting activities lift the key index off-low to close 6.10 points or 0.46% lower at 1326.67. Market breadth was negative through the day with losers outpaced gainers by 622 to 134 while 219 counters were unchanged. Volume increased slightly to 812 million shares worth RM1.210 billion.

Chart wise, the FBM KLCI formed a hammer candlestick which indicates a temporary bottom of the index at 1321. The benchmark index has for the short term turn downtrend, but has for the time being found support at the 30-day moving average (MA). The gap at 1329 to 1332 formed yesterday would post as an overhead resistance to the key index.

MACD continued to move lower indicating the pickup in downward momentum. Nonetheless, it is still above the zero level, hence the southward move is just a short term correction to the underlying main uptrend. RSI(14) at 53 has moved into the neutral zone. Stochastic at 53.9 also moved sharply lower, indicating the short term down cycle is still in place.

The short term trend of the FBM KLCI has turned southward as the correction continues. However, its medium and long term trend still remained up.
The FBM KLCI found its immediate support at the 1321 level provided by the 30-day MA. This is an important level to watch, if the key index close below this level, then it might move further southward to test the lower support at 1308 and the psychological support level at 1300.

With the formation of a hammer candlestick, the FBM KLCI might stage a technical rebound; however, the 1330 to 1340 level would now post as a strong overhead resistance zone to the rebound.

Today, the FBM KLCI is likely to trade within a range of 1314 to 1338.

This week's expected range: 1308 – 1358
Today’s expected range: 1314 – 1338

Resistance: 1330, 1334, 1338
Support: 1314, 1317, 1322

FBM KLCI - further correction and consolidation ahead

Stocks on Bursa Malaysia went on a rotational play last week, while the index-link heavyweights were mostly in correction or consolidation mode in the absence of market moving news after the announcement of the NEM at the end of March.

The FBM KLCI was very much in a consolidation mode last week, it opened the week slightly positive and touched the intra-week high of 1344.12, and it hit the low of 1330.27 before rebounding to close off-low at 1332.77, posting a week-on-week lost of 1.21 point or 0.09%. A total of 4.812 billion shares worth RM7.279 billion changed hands last week, slightly down from the 5.842 billion shares worth RM7.821 billion the previous week.

On the weekly chart, the FBM KLCI formed another bearish black candlestick with longer upper shadow. The key index tried to re-test the high of 1347 a few times during the week, but the attempts failed with the index closing back below the 1340 level. This shows that the bear was very much in control above the 1340 level. The index registered a low high and lower low last week compared with the previous week, which is a sign of weakness in development, and the key index is expected to test the lower support levels at 1327, 1322 and 1308.

Weekly MACD continued to move higher, albeit in a slow rate, and is above its slow MACD. Weekly RSI(14) at 69.2 is lower compared with last week’s 69.71, indicating a gradual weakening of the market strength. Weekly Stochastic is higher at 91.72 compared with previous week’s 90.14, is in the very bullish or overbought zone and might head for a correction. The mixed signals of the indicators reflected the current consolidation mode of the key index.

The underlying trend of the FBM KLCI as indicated by the short, medium and long term moving averages still remained in an uptrend.

For this week, the benchmark index is expected to continue with its consolidation mode in the absence of any major market moving factors, its direction will track that of the regional markets. Rotational play on selective second and third liners may continue to prevail while the key index corrects itself. As the underlying longer term trend is up, any correction should be viewed as an opportunity to accumulate quality stocks at lower level.

This week, the FBM KLCI may trade within a range of 1308 to 1358, and for today it is likely to trade within a range of 1318 to 1345.

This week's expected range: 1308 – 1358
Today’s expected range: 1318 – 1345

Resistance: 1337, 1340, 1345
Support: 1318, 1324, 1328

FBM KLCI - sideways consolidation

Stocks on Bursa Malaysia closed mixed yesterday with the benchmark index staying in positive territory, help by late buying on selected key heavyweights. The FBM KLCI opened higher boosted by strong overnight gains on Wall Street; it touched the intra-day high of 1342.06 in the early hour but heavy profit-taking activities sent the key index into the negative territory and drifted sideways before late buying lifted it to close 2.94 points or 0.22% higher at 1338.83. Losers outpaced gainers by 406 to 293 while 298 counters were unchanged. Volume traded was higher at 1.044 billion shares worth RM1.637 billion, with KNM alone contributed almost sixteen percent to the total volume.

Chart wise, the FBM KLCI formed a Doji candlestick with long lower shadow, which indicates uncertainty in the direction of the key index. The price action of the benchmark index yesterday indicated heavy selling pressure when the index comes into the resistance zone above 1340. The index was trapped in a sideways range for the last five days and is expected to continue doing so.

MACD continued to move lower indicating the loss in positive momentum of the index. RSI(14) at 64.22 continued to move higher, is still in the bullish zone. Stochastic at 68.86, however, continued to move lower indicating the correction mode is still in place.

The 5-day moving average (MA) has crossed below the 10-day MA, but the index is above both MAs indicating short term sideways consolidation of the key index. The medium and long term trend is still up.

The FBM KLCI is now trapped in a trading range of 1331 to 1344, supported below at 1331 and capped on top at 1344; a break in either one direction could mean a move in the direction of the breakout.

Today, the FBM KLCI is likely to trade within a range of 1327 to 1350.

This week's expected range: 1312 – 1363
Today’s expected range: 1327 – 1350

Resistance: 1343, 1346, 1350
Support: 1327, 1330, 1334

FBM KLCI - technical rebound

Stocks on Bursa Malaysia ended mixed yesterday in line with regional markets performance. The FBM KLCI opened 0.34 point lower and surged to an intra-day high of 1341.52, gaining almost 7 points on technical rebound but pulled-back to close the day 1.37 points or 0.1% higher at 1335.89 on strong profit-taking activities. Gainers led losers by 375 to 325 while 282 counters were unchanged. Volume shrank to 845 million shares worth RM1.364 billion.

Chart wise, the FBM KLCI formed an inverted-hammer candlestick, which indicates a temporary bottom at 1334. The benchmark index remains trapped in a sideways trading range of 1331 to 1344 over the last five days due to a lack of positive driving factors in the local market to push it higher.

MACD had made a dead cross over its slow MACD indicating the continued waning of the momentum and consolidation of the key index. RSI(14) at 62.55 has hooked up and is mildly bullish. Stochastic at 71.05 continued to move lower indicating the correction or consolidation cycle is not over yet. Signals from the indicators shows that the key index may continue to be in consolidation mode.

The FBM KLCI is in a consolidation mode for the short term with immediate support at 1330 and overhead resistance at 1344 to 1354. The underlying medium and longer term trend is, however, still up.

The benchmark index is likely to continue its consolidation while the second and third liners will be on rotational play.

Today, the FBM KLCI is likely to trade within a range of 1326 to 1349.

This week's expected range: 1312 – 1363
Today’s expected range: 1326 – 1349

Resistance: 1340, 1345, 1349
Support: 1326, 1330, 1333

FBM KLCI - down on heavy profit taking

Stocks on Bursa Malaysia ended broadly lower yesterday on profit-taking with glove makers topping the losers list. The FBM KLCI ended 5.09 points or 0.38% lower at 1,334.52 after opening 1.24 points higher at 1,340.85. Losers outpaced gainers by 494 to 238 while 260 counters were unchanged. Volume traded stood at 1.027 billion shares worth RM1.413 billion.

The FBM KLCI opened higher following Dow’s overnight closing above 11,000 marks, the key index, however, succumbed to selling pressure and move lower for the rest of the day. Chart wise, it formed a bearish engulfing candlestick chart pattern which indicates heavy selling pressure. It has now closed below the 5 and 10-day moving average, and more downside for the short term is expected.

MACD continued to move southward and has just cross below its slow MACD indicating a pickup in downward momentum. RSI(14) at 61.78 has hooked down and is at the lower side of its bullish zone. Stochastic at 73.42 continued to move lower, indicating the correction cycle is in place.

If the key index closed below the 1330 level, the short term down trend is confirmed, whereas the medium and longer term underlying trend remained up. Immediate support for the key index lies at 1330, if this level couldn’t hold, it may retrace to the 1318 to 1321 support zone.

Today, the FBM KLCI is likely to trade within a range of 1324 to 1348.

This week's expected range: 1312 – 1363
Today’s expected range: 1324 – 1348

Resistance: 1339, 1344, 1348
Support: 1324, 1329, 1332

An update of the stock picks:
(click to enlarge image)

FBM KLCI - higher on technical rebound

Stocks on Bursa Malaysia ended mixed yesterday in tandem with regional markets performance. Most stocks rebounded in the morning session taking cue from Wall Street’s rebound on last Friday, but profit-taking activities trimmed gains. The FBM KLCI opened 2.41 points better at 1,336.39 and touched the intra-day high of 1344.12 before profit-taking trimmed gains to close 5.63 points or 0.42% higher at 1339.61. Gainers and losers are almost equal at 374 to 369 while 265 counters were unchanged. Volume traded was lower at 1.206 billion shares worth RM1.658 billion.

Chart wise, the FBM KLCI formed a white candlestick with long upper shadow, its shadow indicated the resistance that the index faces when it came into the resistance zone of 1344 to 1354. However, with a strong rebound yesterday, the key index is expected to re-challenge the recent high of 1347 and the psychological barrier of 1350 soon.

MACD continued to move lower but is still above its slow MACD, indicating the reduction in upward momentum and the correction mode but is still bullish. RSI(14) at 66.5 has hooked up and is still in the bullish zone. Stochastic at 75.33, however, continued to move lower and has crossed below the 80 level, reflecting the short term correction mode of the index.

The FBM KLCI is now resting on the 5-day moving average (MA) and is still above the 10-day MA which is now at 1334 which gives support to the short term uptrend of the index. The medium and long term uptrend is very much intact.

The current overhead resistance of the key index is at 1344 to 1354, if the index is able to successfully break through this zone, it will challenge the next target level of 1380. The underlying support lies at 1330, 1315 and 1300.

Today, the FBM KLCI is likely to trade within a range of 1328 to 1352.

This week's expected range: 1312 – 1363
Today’s expected range: 1328 – 1352

Resistance: 1344, 1348, 1352
Support: 1328, 1332, 1336

FBM KLCI - might consolidate

Stocks on Bursa Malaysia were on a rotational play last week with key heavyweights stocks in consolidation mode. The FBM KLCI started last week on continued uptrend with the buying of finance stock, the benchmark index continued to rise for twelve consecutive days and touched the intra-week high of 1347.61 on Wednesday, April 7 (its highest level since March 2008). However, profit-taking emerged on Thursday which sent the index to its intra-week low of 1331.46 before rebounding to close off-low on Friday at 1333.98. Week-on-week, the key index lost 1.95 point or 0.15%. A total of 5.842 billion shares worth RM7.821 billion changed hands during the week, up from 4.782 billion shares worth RM6.899 billion the previous week.

On the weekly chart, the FBM KLCI formed a bearish black shooting-star like candlestick which is a top reversal candlestick pattern. It indicated that the market took profit when the index came into the resistance zone of 1344 to 1354, and the key index might continued to correct or consolidate in the coming week. Immediate support for the index lies at 1330, 1324 and 1315.

Weekly MACD continued to move higher and has just touched its weekly slow MACD, indicating a continued pickup in upward momentum. An upward cross of the MACD would indicate the index turning bullish and would move higher. Weekly RSI(14) at 69.7 has hooked down but still in the bullish zone. Weekly Stochastic at 90.15 is very strong and continued to move up into the overbought zone. Signals from the indicators indicated that the key index is still in a very bullish state, albeit the candlestick has indicated possible weakness ahead.

The underlying short, medium and long term trend of the FBM KLCI as indicated by the moving averages remained up.

For this week, the FBM KLCI might correct or consolidate with a downward bias on the lack of strong positive leads, and performance of regional markets especially the Dow will influence the direction of our key index. Rotational play on the second and third liners may continue to prevail while the key index consolidates itself.

The FBM KLCI may trade within a range of 1312 to 1363 this week, and for today it is likely to trade within a range of 1326 to 1344.

This week's expected range: 1312 – 1363
Today’s expected range: 1326 – 1344

Resistance: 1337, 1340, 1344
Support: 1326, 1330, 1332

An update to our stock picks:
(Click on image to enlarge)

FBM KLCI - correction

Stocks on Bursa Malaysia ended broadly lower on heavy profit-taking activities yesterday, in tandem with weakness in regional markets and losses on Wall Street overnight. The FBM KLCI fell 12.16 points or 0.9% to close at 1332.93 after twelve consecutive days of gains. Market breadth was negative with losers outpaced gainers by 476 to 239 while 292 counters were unchanged. Volume traded increased to 1.278 billion shares worth RM1.737 billion.

Chart wise, the FBM KLCI opened with a down gap of 2.68 points and traded lower for the rest of the day and closed near the day’s low to form a bearish black candlestick. A gap down near the top is not a good thing as it reflected a panic situation and the rushing out of players from the market, which also reflected through the increase in trading volume. The benchmark index is expected to get some support at the 1330 level which coincides with the 10-day moving average (MA) support.

MACD has turned south and the histogram has also turned shorter reflecting the slow down in upward momentum, nonetheless, the MACD is still in the positive or bullish territory. RSI(14) at 63.10 made a sharp turn and is back to the bullish zone form the very bullish or overbought zone. Stochastic at 88.4 has crossed below its slow Stochastic, is still above the 80 mark or the overbought zone. Signals from the indicators reflected the correction mode of the key index.
The FBM KLCI has now comes below the 5-day MA, but is still above the 10-day MA, some buying support is expected near the 1330 level which was a resistance turned support area. If this level couldn’t hold, then the index will come down to test the support zone of 1310 to 1320. The underlying short, medium and long term trend is still up.

The benchmark index may continue to correct or consolidate while the second and third may continue to be in a rotational play mode, this short term correction should be viewed as an opportunity to accumulate quality stocks at lower price level.

Today, the FBM KLCI is likely to trade within a range of 1318 to 1346

This week's expected range: 1297 – 1361
Today’s expected range: 1318 – 1346

Resistance: 1336, 1340, 1346
Support: 1318, 1325, 1329

FBM KLCI - toppish look

Stocks on Bursa Malaysia traded on a mixed note yesterday. The FBM KLCI was in the negative territory most part of the day before late buying in key heavyweights lifted it to close 0.72 point or 0.05% higher at 1345.09. The key index had touched an intra-day high of 1347.61, the highest level since March 2008. Gainers led losers by 396 to 366 while 289 counters were unchanged. Volume stood at 1.134 billion shares worth RM1.648 billion.

The FBM KLCI opened with an up gap of 1.55 point and surged to the intra-day high of 1347.61, profit-taking activities sent the key index into the negative territory and touched the intra-day low of 1341.55 before last minute buying propped up the index to close back at positive territory, and formed a black spinning top candlestick on the chart. This type of price action has been happening for the last two days which indicates distribution at this level. The appearance of two spinning top candlesticks at this level also indicated that the key index is met with strong selling activities at current level and was reluctant to move further, could signaled a short term market top.

MACD continued to surge higher, indicating a continued pickup in upward momentum. RSI(14) at 75.23 is very bullish, but has tapered off, indicating the up-move is turning slow. Stochastic at 96.97 is overbought and has hooked down, forewarning a possible correction ahead. Signals from the indicators are fore-telling of possible weakness ahead.

The key index has entered the resistance zone of 1344 to 1354, and is faced with more challenges to move higher. However, the underlying short, medium and long term trend remained up.

The benchmark index may continue to consolidate while the general market may continue to be in a rotational play, any short term correction should be viewed as an opportunity to accumulate quality stocks at lower price level.

Today, the FBM KLCI is likely to trade within a range of 1336 to 1353

This week's expected range: 1297 – 1361
Today’s expected range: 1336 – 1353

Resistance: 1348, 1351, 1353
Support: 1336, 1339, 1342

FBM KLCI - spinning top

Stocks on Bursa Malaysia closed mixed yesterday with profit-taking trimming gains on those stocks that have risen in the past few days. The FBM KLCI continued to close higher with a gain of 2.62 points or 0.2% to end the day at 1344.37. Most of the index’s gains came from TENAGA which rose RM0.28 or 3.5%. Gainers led losers by 406 to 369 while 288 counters were unchanged. Volume traded is higher at 1.122 billion shares worth RM1.545 billion.

The FBM KLCI was very much in the profit-taking mode yesterday. It rose as much as 4.5 points in the morning session hitting the high of 1346.23, but profit-taking push the index to slide lower for most part of the day before last minute buying lifted it to close higher. The price action of the benchmark index formed a Spinning Top candlestick which indicates a possible pause to the current uptrend which has run for 11 trading days consecutively.

MACD continued to move higher. RSI(14) is higher at 74.9, is very bullish. Stochastic is also higher at 97.6, but is tapering off. The oscillators are indicating a short term overbought conditions, and the index may take a breather.

The index has entered the resistance zone of 1344 to 1354, and may try to challenge the 1350 psychological level. The underlying short, medium and long term trend of the benchmark index is up.

The general market may continue to be in a rotational play while the index may consolidate, any short term correction should be viewed as an opportunity to accumulate quality stocks at lower price level.

Today, the FBM KLCI is likely to trade within a range of 1335 to 1352.

This week's expected range: 1297 – 1361
Today’s expected range: 1335 – 1352

Resistance: 1347, 1349, 1352
Support: 1335, 1338, 1341

FBM KLCI - 10th consecutive higher close

Stocks on Bursa Malaysia ended broadly higher yesterday in tandem with the rise in regional markets, aided by the better than expected US job data released last Friday, which helped to boost investors’ interest along with hopes of a sustained economic recovery. The FBM KLCI rose 5.81 points or 0.43% to close at 1341.75 after opening 3.36 points higher at 1,339.30. Gainers led losers by 403 to 322 while 289 counters were unchanged. Volume traded was higher at 1.052 billion shares worth RM1.308 billion.

The FBM KLCI rose for ten consecutive trading days with cumulative gains of over 48 points to close at the highest level in two-years. It formed a white candlestick with a small body yesterday, which indicates low volatility and consolidation. In fact, the benchmark index was trading in a narrow range of only 2.9 points throughout the day, indicating the bulls were cautious in their trades. The index may face more selling pressures at it moves into the resistance zone of 1344 to 1354.

MACD continued to move higher indicating a continuation in upward momentum. RSI(14) at 74 is very bullish and has entered the short term overbought zone. The Stochastic at 96.7 is very strong and also in the short term overbought zone.

The underlying short, medium and long term trends are all up, indicating a very bullish state of the benchmark index. However, after a continuous rise for ten consecutive trading days, the market may find an excuse to correct itself. Any short term correction should be viewed as an opportunity to accumulate quality stocks at lower price level.

Today, the FBM KLCI is likely to trade within a range of 1337 to 1345.

This week's expected range: 1297 – 1361
Today’s expected range: 1337 – 1345

Resistance: 1343, 1344, 1345
Support: 1337, 1338, 1340

Stock to Watch: WASEONG, PETRA

FBM KLCI - expected to move higher

Stocks on Bursa Malaysia continued to rise last week after the announcement of the New Economic Model by the Prime Minister. The announcement have moved the market mildly as it only provided the main frame of the model, while the details of its implementation will only be revealed at stage two.

The FBM KLCI gained 20.8 points or 1.58% week-on-week to close last week at 1335.94. Turnover for the week dropped to 4.782 billion shares worth RM6.899 billion from previous week's 5.214 billion shares worth RM7.983 billion.

On the weekly chart, the FBM KLCI formed a bullish white candlestick which opened near its weekly low on last Monday at 1313.98 and closed near its weekly high at 1335.94, a two-year highest close. The benchmark index hit an intra-week high of 1337.21 on last Friday. This indicated the Bull is very much in control, and the index is expected to move higher this week to challenge the 1350 level. It is expected to face strong resistance at the 1344 to 1354 zone.

Weekly MACD continued to move higher, albeit still below its slow MACD, indicating a continued pickup in upward momentum. Weekly RSI(14) at 70.43 has entered the very bullish zone, hence, the index is expected to further move higher. Weekly Stochastic at 82.51 has turned up, and entered the overbought or very bullish zone. Some profit-taking or small correction to the index is expected as it comes to this level, there is however, no sign of weakness yet.

The underlying short term trend continued to stay up with the FBM KLCI continued to stay above the 5-week moving averages; the medium term trend as indicated by the 10-week MA has turned up, is sideways to up, while the long term trend as indicated by the 30-week MA remained up.

This week, the FBM KLCI is expected to move higher on leads from the overseas market with intermittent profit taking. Selected GLC may continue to move higher with rotational play on lower liner stocks.

The FBM KLCI may trade within a range of 1297 to 1361 this week, and for today it is likely to trade within a range of 1323 to 1345.

This week's expected range: 1297 – 1361
Today’s expected range: 1323 – 1345

Resistance: 1339, 1342, 1345
Support: 1323, 1326, 1331

Stock to watch: WTK

FBM KLCI - 2 years high

Stocks on Bursa Malaysia ended higher yesterday with buying focus mainly on key heavyweights, while lower liners were more of in a consolidation mode. The FBM KLCI moved in tandem with regional bellwether indices to close 9.27 points or 0.79% higher at 1329.84, the highest close in two-years. Gainers led losers by 423 to 316 while 295 counters were unchanged. Turnover was lower at 807 million shares worth RM1.349 billion.

The FBM KLCI breakout from its recent short consolidation to move higher, it hit intra-day high of 1332.58 before pulling back on profit-taking to close at 1329.84, the highest close in two years, surpassing the 1328 level charted on March 10. The benchmark index formed a bullish white candlestick with short upper shadow, which indicates strong buying support on bullish move. It may continue to move higher to re-challenge the 1334.34 level, the highest high in two years charted on March 11. If the index is able to break above this level successfully, it may move higher to challenge the 1350 level in weeks to come.

MACD continued to move higher on a stronger pace indicating a pickup in upward momentum. RSI(14) at 69.4 pickup strongly and is approaching the very bullish zone. Stochastic continued to move higher above the 80 level, is very bullish and the short term up cycle remained intact.

The underlying short, medium and long term trend as indicated by the moving averages remained up.

Today, the FBM KLCI is likely to trade within a range of 1314 to 1345.

This week's expected range: 1277 – 1339
Today’s expected range: 1314 – 1345

Resistance: 1335, 1340, 1345
Support: 1314, 1320, 1325

Stock to Watch: UEMLAND

FBM KLCI - consolidation

Stocks on Bursa Malaysia ended firmer yesterday as the market continued to profit-take during the day. The FBM KLCI traded in a narrow range and bounced between the positive and negative territories through the day before closing 1.22 points or 0.09% higher at 1320.57. Market breadth was negative with losers outpaced gainers by 441 to 275 while 274 counters were unchanged. Volume fell to 961.37 million shares worth RM1.54 billion from 1.046 billion shares worth RM1.33 billion on Tuesday.

Chart wise, the FBM KLCI formed a small body candlestick with lower shadow which indicates consolidation. The benchmark index is support below by the 5-day moving average at 1317, albeit it had penetrated the MA on intra-day. If this level can’t hold, then it might further correct downward to the 1308 level.

MACD continued to move higher but on a slow pace indicating weak upward momentum. RSI(14) at 64.9 is almost flat. Stochastic continued to climb higher indicating the short term up cycle is still intact.

The underlying short, medium and long term trend as indicated by the moving averages remained up. However, signals from the various indicators indicated that the index might continue to consolidate or correct downward, while rotational play on lower liners and selected GLCs may prevail.

Today, the FBM KLCI is likely to trade within a range of 1313 to 1326.

This week's expected range: 1277 – 1339
Today’s expected range: 1313 – 1326

Resistance: 1322, 1324, 1326
Support: 1313, 1315, 1318

Stock to watch: MPHB