Millionaire Trend Trader: FBM KLCI

Thursday, June 3, 2010

FBM KLCI - down on low volume

Stocks on Bursa Malaysia ended mixed yesterday in a range-bound, directionless and low volume trading day. The FBM KLCI lost 6.95 points or 0.52% to close at 1,276.02, after opening 2.63 points lower at 1,280.34. Losers led gainers marginally by 294 to 287 while 269 counters were unchanged. Volume shrink to a two months new low at 585 million shares worth RM802 million.

The FBM KLCI traded in a narrow three points range throughout the day before last minute profit taking activities sent it to close at the lowest point for day. Chart wise, it formed a bearish black Harami candlestick which signifies uncertainties with a bearish outlook. The formation of this candlestick also confirmed the reversal signal sent out by the previous hanging-man candlestick.

The benchmark FBM KLCI is now trapped in a consolidation range with immediate overhead resistance at the three days high of 1285 and immediate support at 1270.

MACD continues to bounce higher with the histograms turning shorter, indicating the downward momentum is slowing down. As it is still below the zero-line, it indicates the key index is still in a corrective mode. RSI(14) at 36.9 continues to slide down, is still in the bearish zone. Stochastic at 39.9 is tapering off, which indicates a slow down in the upward swing. Mixed signals from the indicators point towards a corrective and consolidation mode for the FBM KLCI.

The short term trend of the FBM KLCI is currently down. In order to reverse the short term downtrend, the key index has to close above the 1300 level. The underlying long term trend is, however, still up. Immediate overhead resistance zone for the key index lies at 1285 to 1300, whereas the immediate support zone lies at 1270 to 1250.

Overnight, DJIA gains 225.52 points or 2.52% to close at 10,249.54, and the fall in most major European key indexes has slow down. In view of a lack of fresh leads locally, the FBM KLCI is likely to track the trend of regional bourses.

Today, the FBM KLCI is likely to trade within a range of 1268 to 1290.

This week's expected range: 1208 – 1305
Today’s expected range: 1268 – 1290

Resistance: 1280, 1285, 1290
Support: 1268, 1272, 1274

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Thursday, June 3, 2010

FBM KLCI - down on low volume

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