Millionaire Trend Trader: FBM KLCI - marginally higher on range-bound trading

Wednesday, June 16, 2010

FBM KLCI - marginally higher on range-bound trading

Stocks on Bursa Malaysia ended higher yesterday in quiet trading. The FBM KLCI finished 1.21 points or 0.09% higher at 1,298.37 after opening marginally higher at 1,297.26, it had been trading in a very tight range of less than 3 points throughout the day. Gainers led losers by 296 to 291 while 270 counters were unchanged. Volume rose marginally higher to 511 million shares valued at RM891 million from 502 million shares worth RM665 million on Monday.

Chart-wise, the FBM KLCI formed a small body white candlestick which indicates consolidation with an upward bias. The benchmark index is currently trapped in a range-bound mode, with overhead resistance zone at 1300 to 1320 and support zone at 1270 to 1290. The long term 120-day MA at 1299 continued to post as strong resistance, as for the last two weeks, the key index has failed to cross this hurdle in its attempts to move higher. The short medium term 30-day MA is currently at 1304, if the key index is able to cross this level at 1304 successfully, it might trigger a run towards 1320.

MACD continued to move higher, albeit below the zero-line, indicating a gradual pick up in upward momentum. RSI(14) at 49.6 is in the neutral zone, continued to move higher and is approaching the 50 level, if it crosses this level successfully, then the key index would turn bullish in the short term. Stochastic at 90.8 continued to move higher into the short term overbought zone, and is gaining strength.

The short term trend of the FBM KLCI is currently sideways with an upward bias, while the longer term trend remained up.

In view of the low trading volume over the last few day, the school holidays, and the focus on the FIFA world cup, the local market is expected to continue drifting sideways with an upward bias, and will track the performance of regional bourses.

Overnight, the Dow closed +213.88 points or +2.10% higher at 10,404.77. Today, the FBM KLCI is likely to trade within a range of 1293 to 1305.

This week's expected range: 1250 – 1324
Today’s expected range: 1293 – 1305

Resistance: 1299, 1302, 1305
Support: 1293, 1295, 1297

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Wednesday, June 16, 2010

FBM KLCI - marginally higher on range-bound trading

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