Millionaire Trend Trader: FBM KLCI - short term trend turned up

Friday, June 4, 2010

FBM KLCI - short term trend turned up

Stocks on Bursa Malaysia ended higher across the board yesterday in tandem with gains in most major regional bourses. The FBM KLCI rose 18.42 points or 1.44% to close at 1,294.44, after opening 9.52 points higher at 1,285.54. It touched the intra-day high of 1297.75 before profit-taking activities sent it lower to close off high. Gainers overwhelmed losers by 542 to 154 while 244 counters were unchanged. Turnover was higher at 655 million shares valued at RM1.243 billion from 585 million shares valued at RM802 million on Wednesday.

The FBM KLCI formed a bullish white candlestick with a breakaway gap indicating bullish buying support for index-link counters. It breaks into the immediate resistance zone of 1285-1300 and encountered some resistance when it hit the 120-day moving average (MA) at 1297.55, hence, it retrace from the intra-day high of 1297.75 to close below this immediate resistance at 1297. If the key index is able to cross this resistance and the 1300 psychological resistance level, then it might run towards the 1316 level.

MACD continued to move higher but is still below its trigger-line and in the negative zone, indicating the current rise of the benchmark index is in technical rebound state after a steep falls. Nonetheless, the upward momentum is gaining strength as indicated by the histograms, and a golden-cross is about to happen. RSI(14) at 46 has turned up and move into the neutral zone from the bearish zone, indicating a gain in the positive strength. Stochastic at 39.8 continued to move higher, indicating the short term up cycle or rebound is still in place. Signals from the indicators are pointing towards a continuation in the current rebound.

The short term trend of the FBM KLCI has reversed up yesterday when the key index crossed above the 10-day MA. The medium term trend is in the sideways as indicated by the 30 and 60-day MA, while the long term trend is still up.

In view of a lack of fresh leads locally, the FBM KLCI will continue to track the performances of major regional markets. Overnight, the Dow closed 5.74 points or 0.06% higher at 10,255.28, and the European markets also closed in the positive zone.

Today, the FBM KLCI is likely to trade within a range of 1280 to 1310.

This week's expected range: 1208 – 1305
Today’s expected range: 1280 – 1310

Resistance: 1300, 1305, 1310
Support: 1280, 1285, 1290

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Friday, June 4, 2010

FBM KLCI - short term trend turned up

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