Millionaire Trend Trader: FBM KLCI - expected to move higher

Monday, April 5, 2010

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

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Monday, April 5, 2010

FBM KLCI - expected to move higher

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