Millionaire Trend Trader: FBM KLCI

Friday, July 9, 2010

FBM KLCI - up on weak momentum

Stocks on Bursa Malaysia ended higher yesterday as investors took the cue from the strong overnight close on Wall Street. The FBM KLCI closed 4.28 points or 0.33% higher at 1316.03 lifted by gains in selected heavyweights. Gainers led losers by 365 to 242 while 275 counters remained unchanged. Volume decreased slightly to 532 million shares but the value increased to RM971 million compared with 539 million shares worth RM919 million on Wednesday.

The FBM KLCI opened with an up gap of 2.87 points higher at 1,314.62 and surged to the intra-day high of 1317.05 before profit-taking activities sent it down to the intra-day low of 1312.95, and a last minute buying of selected heavyweights managed to lift the benchmark index to close higher at 1316.03 forming a Spinning-top candlestick, which indicates hesitation of the market to move higher. It indeed reflected the selling pressure encountered when the index moved into the resistance zone.

The benchmark index is now above the short term 5 and 10-day moving average (MA), and is also above the medium term 60-day MA, and it is expected that they will give support to the index to move higher. Nonetheless, it is faced with the immediate strong overhead resistance zone at 1320 to 1335. Immediate support zone is at 1300 to 1308.

MACD had turned upward, but still below its signal-line, indicating the current up-move may be a technical rebound and has not gain full strength yet. RSI(14) at 53.7 continued to move higher into the mildly bullish zone. Stochastic at 42 had just made a golden-cross above its slow Stochastic, indicating a short term up-cycle has just begun. Signals from the indicators are pointing towards a possible continuation of the current short term uptrend.

The short term trend of the FBM KLCI has turned upward; the medium term trend remained sideways as indicated by the medium term MAs, while the long term trend is still up.

Overnight, the Dow closed +120.71 or +1.20% higher at 10,138.99. Today, the FBM KLCI is likely to trade within a range of 1308 to 1323.

This week's expected range: 1260 – 1341
Today’s expected range: 1308 – 1323

Resistance: 1318, 1320, 1323
Support: 1308, 1311, 1314

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Friday, July 9, 2010

FBM KLCI - up on weak momentum

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