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

Thursday, July 1, 2010

FBM KLCI - short term trend turned southward

Stocks on Bursa Malaysia ended lower yesterday tracking the lackluster performances of equity markets globally on concerns over the pace of the global economic recovery. The FBM KLCI ended the day 5.82 points lower at 1314.02 but off its earlier low of 1306 after opening 10.66 points lower at 1309.18. Losers led gainers by 343 to 267 while 259 counters were unchanged. Turnover was lower at 563 million shares worth RM987 million, down from Tuesday’s 741 million shares worth RM1.05 billion.

The FBM KLCI opened 10.66 points lower at 1314.02 taking cue from the 268 points fall on the Dow overnight. It hit the intra-day low of 1306 within five minutes after opening and rebounded from there to hit the intra-day high of 1316.36, and profit-taking activities trimmed intra-day gain which led the index to close off-high to form a white candlestick, which indicates buyers were stronger than the sellers due to bargain hunting activities. However, the key index has moved below the 1318 support level and is now in the support zone of 1300 to 1318 with a downward bias.

MACD continued to slide lower, indicating the gradual increased in downward momentum, and may continue to slide lower. RSI(14) at 51.7 continued to slide lower towards the neutral line at 50, indicating the loss of market strength. Stochastic at 65 also continued to slide lower, reflecting a continuation of the down cycle. Signals from the indicators are pointing towards more weakness to come for the benchmark FBM KLCI.

Immediate support for the FBM KLCI now lies at 1298 to 1308, while the overhead resistance is at 1318 to 1330. If the key index breaks below the psychological support at 1300, there might be more downside to come and will re-visit the 1280 level. Short term, the FBM KLCI has turned downtrend, while the longer term trend still remained up for the time being.

Overnight, the Dow closed -96.28 points or -0.98% lower at 9,774.02. Today the FBM KLCI is likely to trade within a range of 1298 to 1323.

This week's expected range: 1293 – 1352
Today’s expected range: 1298 – 1323

Resistance: 1317, 1320, 1323
Support: 1298, 1302, 1308

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Thursday, July 1, 2010

FBM KLCI - short term trend turned southward

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