FBM KLCI - correction imminent

Stocks on Bursa Malaysia traded mixed last week with the benchmark index rose for a second consecutive week to close at a new 31-month high while most second and third liners were in correction mode. The FBM KLCI advanced 16.03 points or 1.15%, week-on-week, to 1,411.05, compared with previous week’s closing of 1,395.02, lifted by the encouraging results of the banking sectors, Genting, Axiata and that of Sime Darby. Weekly turnover decreased to 4.02 billion shares worth RM7.55 billion from 4.9 billion shares worth RM7.78 billion the previous week.

The FBM KLCI opened last Monday with an up gap of 4.85 points at 1399.87 and closed the day above the psychological resistance level of 1400 at 1403.15. It continued to close at new high on Tuesday at 1405.77 despite heavy profit-taking activities. Wednesday saw heavy profit-taking activities which sent the key index to close below the 1400 psychological level at 1396.97. However, a strong rebound on Thursday sent the index to close 11.03 points higher at 1,408.00 on renewed buying interest and another 3.05 points to 1,411.05 on follow-through buying on last Friday.

On the weekly chart, the key index formed a bullish short white candlestick which indicates a continuation in buying interest. The smaller candle body as compared with the previous week’s candle indicates a reduction in upward momentum capped by profit-taking activities at levels above 1400. The index is likely to continue its momentum to test the higher resistance zone at 1415 to 1436, and a stronger resistance lies at the 1450 level.

Weekly MACD continued to climb higher, indicating the medium term upward momentum is gaining strength. Daily MACD also continued to climb higher, however, its histogram turned shorter, which is a divergence to the MACD line, and indicates the daily upward momentum is possibly waning off.

Weekly RSI(14) at 73 is higher and indicates that the medium term upward strength is very bullish, nonetheless, has entered the mildly overbought zone. Daily RSI(14) at 76.6 is very bullish, but is in divergence to the price, this indicates a weakening in the upward strength and may forewarn of a possible correction ahead.

Weekly Stochastic at 96.7 continued to move higher, indicates a continuation of the medium term up cycle. Daily Stochastic at 93, however, continued to slide lower and is below its slow stochastic, is also in divergence to the price, indicates a gradual loss in upward strength.

Signals from the indicators indicate that the weekly or medium term momentum and upward strength of the key index is still strong. However, the daily or short term signals are showing a number of divergences, and may forewarn of a possible correction ahead.

The underlying short, medium and long term trend of the FBM KLCI as indicated by its moving averages (MA) are all strongly pointing up, hence, any short term correction maybe well supported by the medium and longer term MAs. Immediate overhead resistances lies at 1415, 1423 and 1436, which was the February 14 2008 peak, Immediate support upon a correction is seen at 1,400, with subsequent support at 1,392, then 1,380, followed by the August 3, pivot high of 1,370.

For the coming holiday-shorten week, the market is likely be range-bound as the release of corporate results has ended, while weak external economic indicators might continue to influence sentiment on the local bourse.

The Dow rose +164.84 points or +1.65% higher to close at 10,150.65 on last Friday. This week, the FBM KLCI may trade within a range of 1370 to 1445, and for today it is likely to trade within a range of 1390 to 1428.

This week's expected range: 1370 – 1445
Today’s expected range: 1390 – 1428

Resistance: 1417, 1423, 1428
Support: 1390, 1396, 1403

FBM KLCI - strong rebound

Stocks on Bursa Malaysia closed mixed yesterday with the benchmark index rebounded to surpass the 1,400 points level buoyed by continued buying momentum for heavyweights, as sentiment improved following overnight gains on Wall Street and positive corporate earnings. The FBM KLCI rose 11.03 points or 0.79% to close at 1408.00, another new high for the year. Gainers led losers by 353 to 333 while 294 counters were unchanged. Turnover declined to 684 million shares, worth RM1.292 billion, from 873 million shares worth RM1.732 billion the day before.

The FBM KLCI rebounded to open higher and was trading in a narrow range below 1400 in the morning session. The key index broke above the 1400 level near noon and continued to move higher in the afternoon to close at the highest point for the day. Chart-wise, the key index formed a bullish white candlestick which indicates the bull was in full control, and the index is expected to continue its upward momentum to move higher. Immediate overhead resistance zone is at 1410 to 1424.

MACD continued to move higher after pausing for a day, indicating a resume in the upward momentum. RSI(14) at 75.7 has hooked up reflecting the rebound and is still in the very bullish zone. Stochastic at 94.3 also hooked up but remained below its slow stochastic. Signals from the indicators indicated that the benchmark index is still in a very bullish state but remained short term overbought, and still run a risk of a downward correction.

With the strong up move yesterday, the FBM KLCI again move above the very short term 5-day moving average and is also above all other longer term moving averages. This indicates a bullish uptrend of the benchmark index.

However, external factors and concerns over a possible double-dip global recession, due to weak economic data emerging from the US, would continue to influence performance of the local market. Although good corporate results reported by Maybank and Axiata have lent positive support to the market, more correction was expected after the recent rally.

Overnight, the Dow fell -74.25 points or -0.74% lower to close at 9,985.81. Today, the FBM KLCI is likely to trade within a range of 1390 to 1419.

This week's expected range: 1347 – 1436
Today’s expected range: 1390 – 1419

Resistance: 1411, 1415, 1419
Support: 1390, 1394, 1401

FBM KLCI - healthy correction

Stocks on Bursa Malaysia ended lower yesterday after an eight-day rally as investors concern that the global economic recovery could be derailed amid dismal economic data in the United States and Europe. The FBM KLCI fell 8.8 points or 0.63% to close at 1396.97 dragged down by losses in Sime Darby and Axiata, after struggling to stay above the 1400 level. Losers overwhelmed gainers by 585 to 186 while 268 counters were unchanged. Turnover was lower at 873 million shares worth RM1.732 billion from Tuesday’s 894 million shares worth RM1.651 billion.
The FBM KLCI opened with a down gap of 2.67 points at 1403.10 and traded lower for the rest of the day. It hit the intra-day low of 1396.41 and managed to rebound to 1401.97 but the bear continued to sell down and pushed the key index to close near the low. Chart-wise, the key index formed a bearish black candlestick which confirms the hangman reversal signal formed on Tuesday.

MACD has tapered off, as shown by the shorter histogram, indicating a slow down in the upward momentum. RSI(14) has dropped to 71.7 from 81.5 a day before, indicating strong reversal strength. Stochastic at 93.6 continued to move lower and has crossed below its slow stochastic line, reflecting the correction mode of the key index. Signals from the indicators indicated that a reversal of the key index has taken place and might further correct downward.

The FBM KLCI is now closing right below the 5-day moving average (MA), and is likely to correct further downward to test the support of the 10-day MA at 1383. Immediate support zone lies at 1370 to 1383 while the overhead resistance is at 1400. The underlying short, medium and long term uptrend, however, remained intact at the moment. Hence, the correction should be viewed as an opportunity to accumulate quality stocks at lower price level.

Overnight, the Dow rebounded +19.61 points or +0.20% higher to close at 10,060.06. Today, the FBM KLCI is likely to trade within a range of 1385 to 1414.

This week's expected range: 1347 – 1436
Today’s expected range: 1385 – 1414

Resistance: 1403, 1408, 1414
Support: 1385, 1391, 1394

FBM KLCI - higher for the eighth day amidst profit-taking

Stocks on Bursa Malaysia ended lower on profit-taking while the benchmark index continued to close higher help by gains in key heavyweights such as Genting, Proton and Axiata. The FBM KLCI rose 2.62 points or 0.19% to close at 1405.77, another new high since February 2008, and was up for an eight consecutive days. Losers outpaced gainers by 585 to 266 while 241 counters were unchanged. Turnover increased to 894 million shares worth RM1.65 billion, from 805.113 million shares worth RM1.34 million on Monday.

The FBM KLCI opened 1.07 point higher at 1404.77 and surged to the intra-day high of 1406.95 within the first fifteen minutes, it was followed by heavy profit-taking which sent the key index to the intra-day low of 1399.77. The key index was hovering around 1401 level for a major part of the day and last minute buying on selected key heavyweights helped push the index to close near the day high. Chart-wise, the key index formed a hangman-like candlestick which is a top reversal signal, hence, the index is expected to correct downward.

MACD continued to climb higher indicating the upward momentum is still strong. RSI(14) is higher at 81.5, is seriously overbought, and is tapering off. Stochastic at 98.7 continued to slide lower from yesterday’s reading of 99.3, indicating a loss in upward strength. Signals from the indicators are indicating a seriously overbought situation of the key index, and a correction is expected.

The FBM KLCI is staying above all its short, medium and long term moving averages, and the moving averages are all pointing northeast, indicating a very strong uptrend and very bullish state of the benchmark index, technically. However, do beware of the bear that might have creep in quietly, moreover, regional key indexes were already in correction mode.

As the underlying longer term trend of the FBM KLCI is still strongly pointing up, a short term correction should be viewed as an opportunity to accumulate quality stocks at lower price level. Overnight, the Dow fell -133.96 points or -1.32% lower to close at 10,040.45. Today, the FBM KLCI is likely to trade within a range of 1394 to 1414.

This week's expected range: 1347 – 1436
Today’s expected range: 1394 – 1414

Resistance: 1408, 1411, 1414
Support: 1394, 1397, 1401

FBM KLCI - closing above 1400

Stocks on Bursa Malaysia ended mixed yesterday with the benchmark index continued to advance higher above the 1400 point level, supported by buying interest in banking stocks and heavyweight counters, fuelled by liquidity and expectations of better corporate earnings. The FBM KLCI rose 8.13 points or 0.58% to close at 1403.15 after opening 4.85 points higher at 1399.87. Decliners led advancers by 465 to 291 while 270 counters were unchanged. Turnover was lower at 805 million shares worth RM1.338 billion from 834 million shares worth RM1.341 billion last Friday.

The FBM KLCI opened with an up gap of 4.85 points at 1399.87 and profit-taking activities sent it to the intra-day low of 1396.87, it then climb higher to touched the intra-day high of 1404.31, and was bouncing between the high and low of the day. Last minute buying of selected heavyweights again pushed the key index higher to close at 1403.15. Chart-wise, the key index formed a bullish white candlestick which indicates the bull was very much in control and reflected the strong support for index-link counters. The benchmark index is expected to face immediate heavy resistance at 1408 level.

MACD continued to climb higher indicating the continued picking up in upward momentum. RSI(14) at 80.8 is seriously overbought, nonetheless, it indicates the index is exceptionally strong. Stochastic at 99.3 is also overbought, has hooked down slightly, is indicating a very strong up uptrend. Signals from the indicators are indicating very strong market strength of the key index, and the overbought situation might give the bear an excuse for correction.

The underlying short, medium and long term trend of the FBM KLCI remained in a strong uptrend direction. Immediate overhead resistance zone is at 1408 to 1436 while the immediate support lies at 1390 to 1396. In view of the strong market strength, any correction downward should be viewed as an opportunity to accumulate quality stocks at lower prices.

Overnight, the Dow fell -39.21 points or -0.38% lower to close at 10,174.41. Today, the FBM KLCI is likely to trade within a range of 1391 to 1412.

This week's expected range: 1347 – 1436
Today’s expected range: 1391 – 1412

Resistance: 1406, 1409, 1412
Support: 1391, 1394, 1398

FBM KLCI - Bullish with a high potential of correction ahead

Stocks on Bursa Malaysia had a good run last week with the benchmark index continuously charting new high over the last five days while second and third liners were in rotational play, fueled by good corporate results and the stronger-than-expected second quarter GDP growth of 8.9% announced on Wednesday. The FBM KLCI advanced 34.87 points or 2.56 %, week-on-week, to 1395.02 compared with previous week's closing of 1360.15. Weekly volume increased to 4.9 billion shares worth RM7.78 billion from 3.94 billion shares worth RM5.81 billion the previous week.

The FBM KLCI opened 0.29 point lower at 1359.86 on last Monday and touched the intra-week low of 1358.95 on mild profit-taking, but reversed up to close at 1370.58, charting a new high for the year. It continued to scale new high daily from Tuesday onwards and closed the week at the highest point of 1395.02, which is a fresh 31-month high since February 2008. On the weekly chart, the benchmark index formed a bullish Marubozu candlestick which indicates the bull was in full control, hence, the key index is expected to continue its momentum to climb higher in the coming week to test the 1400 psychological resistance level. If successful, the key index may extend its run towards the next higher target level at 1428.

Weekly MACD continued to climb higher, indicating the medium term upward momentum is gaining strength, and so is the short term daily MACD which indicates a strong upward momentum. Weekly RSI(14) at 70.6 is indicating that the medium term market strength of the key index is turning very bullish, and its daily RSI(14) at 78.3 is also very bullish but has advanced far into the overbought zone. Weekly Stochastic at 94.9 has again hooked up, reflecting the continued up move of the key index. Its daily Stochastic at 99.99 is indicating a very strong up trend, but is also short term overbought. Signals from the indicators are indicating a strong underlying upward strength of the key index with short term overbought sign; hence, a pull-back or correction is expected anytime soon.

The FBM KLCI is now staying above all its short, medium and long term moving averages, indicating a strong uptrend and a very bullish state of the key index, as confirmed by readings from the oscillators. The immediate overhead resistance zone now is at 1400 to 1428, while its immediate downside support lies at 1370 to 1385 provided by the 5 and 10-day MA.

In view of the strong second quarter economic growth and the continue release of corporate results, which is expected to be generally good in the coming week, the market is expected to remain firm. However, the result of Sime Darby which is due to be released on Thursday, 26th August will be the center of focus, and it may have a strong impact to the short term direction of the market.

The Dow fell -57.59 points or -0.56% lower to close at 10,213.62 on last Friday. This week, the FBM KLCI may trade within a range of 1347 to 1436, and for today it is likely to trade within a range of 1385 to 1405.

This week's expected range: 1347 – 1436
Today’s expected range: 1385 – 1405

Resistance: 1397, 1399, 1405
Support: 1385, 1387, 1391

Stock to watch: BSTEAD, INCKEN, IJMLAND

FBM KLCI - up for the fifth consecutive days

Stocks on Bursa Malaysia ended higher yesterday with the benchmark index hitting a 31-month high lifted by gains in finance stocks. The FBM KLCI rose 7.05 points or 0.51% higher to close at 1392.56 after opening 1.44 points better at 1386.95. Advancers led decliners by 407 to 321 while 293 counters were unchanged. Total volume dwindled to 983 million shares worth RM1.7 billion, compared with Wednesday’s 998 million shares worth RM1.62 billion.

The FBM KLCI opened with an up gap of 1.44 points and traded in the positive territory throughout the day with active profit-taking, nevertheless, the index continued to close the day at the highest point. The key index formed a bullish white candlestick which indicates the bull was very much in control for the day. It was up for the fifth consecutive days approaching the 1400 level, an immediate psychological resistance level.

MACD continued to climb higher, indicating the continuation of bullish upward momentum. RSI(14) at 77.5 continued to move higher into the very bullish zone, and is short term overbought. Stochastic at 97.8 is overbought and is tapering off indicating very strong market strength. Signals from the indicators are indicating a very bullish state of the benchmark FBM KLCI, but is short term overbought, hence, a pull-back is expected soon.

The underlying short, medium and long term trend of the FBM KLCI remained up. With the key index rising consecutively for five days, and the indicators in the overbought zone, a pull-back of the index is expected. However, with the stronger-than-expected economic figure for second quarter released on Wednesday, the market is expected to remain bullish, hence, any pull-back should be view as an opportunity to accumulate quality stocks at lower price.

Overnight, the Dow fell -144.33 points or -1.39% lower to close at 10,271.21. Today, the FBM KLCI is likely to trade within a range of 1381 to 1399.

This week's expected range: 1327 – 1395
Today’s expected range: 1381 – 1399

Resistance: 1395, 1397, 1399
Support: 1381, 1384, 1388

FBM KLCI - continued to close at fresh year high

Stocks on Bursa Malaysia closed mixed yesterday, with the benchmark index advancing for the fourth consecutive days due to gains in Maxis, CIMB and Sime Darby. Interests were seen in selected heavyweights ahead of their quarterly results. However, gains were capped as investors took profits after the recent gains. The FBM KLCI closed 7.04 points or 0.51% higher at 1385.51 after opening 2.12 points higher at 1380.59. Losers outpaced gainers by 377 to 334 while 312 counters were unchanged. Volume dwindled to 998 million shares worth RM1.615 billion compared with Wednesday’s 1.112 billion shares worth RM1.755 billion.

The FBM KLCI opened with an up gap of 2.12 points and surged to the morning session high of 1383.71, and profit-taking activities pulled it off high to consolidate around 1381, buying interest on selected heavyweights in the last hour pushed the index to close at 1385.51, the highest point of the day. The key index formed a bullish white candlestick which indicates continuation of the uptrend. After breaching through the resistance at 1383, the key index is expected to continue its upward journey to test the next level of resistance at 1395.

MACD continued to climb higher after making a golden-cross yesterday, indicating the picking up in the upward momentum. RSI(14) at 75 is very bullish, continued to move higher into the overbought zone. Stochastic at 97.4 is also short term overbought. Signals from the indicators are indicating a very bullish undertone of the FBM KLCI. However, the overbought signs may forewarn of a possible pull-back soon.

The underlying short, medium and long term trend of the FBM KLCI remained up, and a rally towards the 1400 level is expected. The overhead resistance zone now lies at 1390 to 1400 while the immediate downside support zone is at 1360 to 1370.

In view of the bullish undertone and strong uptrend of the key index, any correction downward to the support level should be viewed as an opportunity to accumulate quality shares at lower price. Overnight, the Dow rose +9.69 points or +0.09% higher to close at 10,415.54. Today, the FBM KLCI is likely to trade within a range of 1376 to 1391.

This week's expected range: 1327 – 1395
Today’s expected range: 1376 – 1391

Resistance: 1387, 1389, 1391
Support: 1376, 1378, 1382


Stock to watch: UKB, KEURO, KIANJOO

FBM KLCI - another fresh high for the year

Stocks on Bursa Malaysia ended mixed yesterday with the benchmark index continued to scale fresh high, while second and third liners undergo profit-taking corrections. Sentiment was boosted by optimism that the country's second-quarter economic growth would remain positive. The FBM KLCI rose 7.89 points or 0.58% to close at 1378.47, charting another fresh high for the year. Gainers led losers by 391 to 367 while 292 counters were unchanged. Turnover increased to 1.112 billion shares worth RM1.755 billion, from Monday’s 973 million shares worth RM1.362 billion.

The FBM KLCI opened with a 0.99 point up gap and traded higher to touch the intra-day high of 1381.41, it tested the intra-day high twice before profit-taking activities sent the index to close off high. The key index formed a bullish white candlestick which indicates continuation of the uptrend and is expected to meet strong resistance when it comes into the resistance zone of 1380 to 1400.

MACD continued to move higher, and has just made a golden-cross, which is a bullish buy signal, indicates the upward momentum is picking up. RSI(14) at 72.2 is turning very bullish and has entered the overbought zone. Stochastic at 86.4 continued to move higher into the overbought indicating the up cycle is turning strong. Signals from the indicators are indicating a very bullish state of the FBM KLCI, however, the overbought signals may forewarn of an impending correction or pull-back of the key index.

The underlying short, medium and long term trend of the FBM KLCI remained up, and a rally towards the 1400 level is expected. The overhead resistance zone now lies at 1380 to 1400 while the immediate downside support is at 1350 to 1360.

In view of the bullish undertone of the key index and the strong uptrend, any correction downward to the support level should be viewed as an opportunity to accumulate quality shares at lower price. Overnight, the Dow rose +103.84 points or +1.01% higher to close at 10,405.85. Today, the FBM KLCI is likely to trade within a range of 1363 to 1391.

This week's expected range: 1327 – 1395
Today’s expected range: 1363 – 1391

Resistance: 1383, 1387, 1391
Support: 1363, 1367, 1373

Stock to watch: SDRED, INGRESS, LANDMRK, OGAWA

FBM KLCI - closed at 30-month fresh high

Stocks on Bursa Malaysia ended higher yesterday led by strong gains in GENTING and MAYBANK. The FBM KLCI closed at a fresh 30-month high of 1370.58 with a gain of 10.43 points or 0.77% after opening 0.29 point lower at 1359.86. The 1370 level was last seen in February 2008. Gainers led losers by 404 to 320 while 261 counters were unchanged. However, volume was lower at 973 million shares worth RM1.362 billion compared with last Friday's 996 million shares worth RM1.360 billion.

The FBM KLCI opened 0.29 point lower and touched the intra-day low of 1358.95 before it breakout from the short profit-taking consolidation to move higher and closed at the highest point of the day at 1370.58. This formed a bullish long white candlestick which indicates the bull was in total control for a major part of the day. With this bullish move, the key index is expected to move higher to challenge the next level of resistance at 1383.

MACD has turned upward as shown by its shorter histogram, indicating a change in momentum direction from down to up. RSI(14) at 68.5 continued to move higher and is turning more bullish. Stochastic at 63.4 has hooked up and crossed above its slow stochastic line indicating a change in the short term cycle direction from down to up. Signals from the indicators are pointing towards a bullish outlook, and the FBM KLCI is expected to move higher.

With the strong close yesterday, the short term correction of the FBM KLCI is considered over, as the key index is again staying above all its short, medium and long term moving averages. The overhead resistance zone is now at 1375 to 1383, while the downside support zone is at 1350 to 1360.

Overnight, the Dow fell -1.14 points or -0.01% lower to close at 10,302.01. Today, the FBM KLCI is likely to trade within a range of 1355 to 1383.

This week's expected range: 1327 – 1395
Today’s expected range: 1355 – 1383

Resistance: 1375, 1378, 1383
Support: 1355, 1360, 1365

FBM KLCI - short term choppy, long term bullish

Stocks on Bursa Malaysia went through a week of roller-coaster ride last week with the benchmark FBM KLCI falling from 1360 level to the intra-week low of 1342.07 and recovered to close the week at 1360.15 on Friday. The FBM KLCI lost 0.3 of a point or 0.02%, week-on-week, to 1,360.15 compared with previous Friday's closing of 1,360.45. Weekly volume dropped to 3.939 billion shares worth RM5.813 billion from 4.741 billion shares valued at RM6.766 billion the previous week.

The FBM KLCI opened last week on a weak note with the key index in a correction mode and traded in a narrow range on Monday and Tuesday, where it still hang around the 1360 level. It lost 6.8 points to close at 1352.91 on Wednesday, and plunged almost 10 points to the intra-week low of 1342.07 on Thursday before recovering strongly to close last Friday at 1360.15.

The price action of the key index led to the formation of a dragon-fly Doji candlestick with long lower shadow on the weekly chart, which indicates strong buying support of index-linked counters at levels below 1360. On the daily chart, the key index formed a bullish Marubozu candlestick which confirmed the reversal signal issued by the Hammer candlestick formed on last Thursday. The FBM KLCI is, thus, expected to continue moving higher in the coming week, however, strong resistance is expected at 1370 level.

Weekly MACD continued to climb higher, indicating the medium term momentum of the key index remained positive. Daily MACD, however, continued to move lower, but is tapering off as indicated by the shorter histogram, indicating the short term downward momentum is waning. Weekly RSI(14) at 64.4 is flat, but remained in the bullish zone. Daily RSI(14) at 62.2 has hooked up, indicating the turn in market strength to the positive direction. Weekly Stochastic at 94.5 has hooked down, but remained above its slow stochastic, indicating the medium term market strength is still strong; while daily Stochastic at 43.2 continued to move lower, indicating the short term down cycle is not over yet. Mixed signals from the indicators is indicating that the medium to longer term market remained bullish, while the short term could be choppy.

The FBM KLCI is currently staying above all its short, medium and long term moving averages which indicates a bullish state of the key index. However, the appearance of a shooting-star candlestick the week before followed by a long lower shadow Doji last week indicates a possible top, unless the key index could break through the 1370 level in weeks to come. The overhead resistance zone remained at 1370 to 1383, while the immediate downside support zone is at 1340 to 1350.

The market may extend its rally this week on continued buoyant sentiment from last Friday's up move but it could fast fizzle out, as key data released in the US showed hints of possible economic softness, which could trigger another round of cautious sentiment among investors. In view of a lack of fresh market leads locally, the FBM KLCI will continue to track the performance of regional key indexes, while rotational play on second and third liners will continue to prevail.

The Dow fell -16.80 points or -0.16% lower to close at 10,303.15 on last Friday. This week, the FBM KLCI may trade within a range of 1327 to 1395, and for today it is likely to trade within a range of 1346 to 1369.

This week's expected range: 1327 – 1395
Today’s expected range: 1346 – 1369

Resistance: 1363, 1366, 1369
Support: 1346, 1349, 1355

Stock to watch: ZELAN, BJASSET, BHIC

An update of stock to watch:

FBM KLCI - lower with the formation of Hammer candlestick

Stocks on Bursa Malaysia ended lower yesterday on continued selling, as investors were worried over the sustainability of the global economic recovery. The FBM KLCI fell 3.58 points or 0.27% to 1,349.33 after opening 4.19 points lower at 1,348.72. Losers led gainers by 383 to 298 while 261 counters were unchanged. Volume, however, increased to 798 million shares worth RM1.088 billion from 769 million shares worth RM1.169 billion on Wednesday.

The FBM KLCI opened with a down gap of 4.19 points and traded lower to the intra-day low of 1342.07, losing 10.84 points at the worst, on panic selling taking cue from the overnight hefty loss on Wall Street. The key index managed to recover some loss ground in the second half of the day and rebounded to close off high of 1350.20 at 1349.33. The price action of the key index led to the formation of a hammer pattern candlestick, which is a bottoming signal.

As mentioned in previous analysis, the 30-day moving average (MA) provided a strong support to the key index when it rebounded strongly off it. As the key index did not manage to close above the 1350 psychological resistance level, this resistance level will continue to post as a strong resistance to the up move of the key index.

MACD continued to slide lower, indicating the pick up in downward momentum. RSI(14) at 53.3 continued to slide lower into the neutral zone, indicating the continued loss in market strength. Stochastic at 48.2 continued to slide lower and has cross below the mid range indicating a weak market and the down cycle will continue.

For the short term, the FBM KLCI has turned downtrend, while the medium and long term remained in the uptrend. Now that the key index is closing below the critical 1350 psychological level, the next important lower support is at 1340 which coincide with the 30-day MA, if this level could not hold, then the key index might come down to the 1320 level. With the currently weak technical reading, the FBM KLCI is expected to remain in a correction and consolidation mode.

Overnight, the Dow fell -58.88 points or -0.57% to close lower at 10,319.95. Today, the FBM KLCI is likely to trade within a range of 1336 to 1358.

This week's expected range: 1339 – 1383
Today’s expected range: 1336 – 1358

Resistance: 1352, 1355, 1358
Support: 1336, 1339, 1344

FBM KLCI - short term trend turned down

Stocks on Bursa Malaysia ended broadly lower yesterday, dragged down by losses in heavyweights amid weaker regional bourses and lack of positive news locally. The FBM KLCI declined 6.8 points or 0.5% to 1352.91 after opening 0.12 point lower at 1359.59. Losers outnumbered gainers by 464 to 207 while 279 counters were traded unchanged. Volume, however, increased to 769 million shares worth RM1.169 billion from 675 million shares worth RM1.132 billion on Tuesday.

The FBM KLCI opened 0.12 point lower at 1359.59 and was trading in the negative territory throughout the day, heavy profit-taking activities sent the key index to the intra-day low of 1349.50 before bargain hunting activities lifted it to close off low at 1352.91. Chart wise, the key index formed a bearish black candlestick which indicates the bear was in control, and further weakness is expected ahead before any sign of bottoming is seen.

The key index tested the support of the 1350 psychological level and bounces off it, and a re-test is expected, if it cannot hold, the key index is then likely to come down to the 30-day moving average (MA) support level at 1340, which is a critical support level in order to maintain the current short term uptrend of the FBM KLCI.

MACD continued to slide lower after making the dead-cross yesterday, indicating the picking up in the downward momentum. RSI(14) at 57.5 plunged lower into the neutral zone indicating a weakening of the short term market strength. Stochastic at 63.5 continued to slide lower indicating the downward move is picking up steam. Signals from the indicators are pointing toward a bearish outlook of the key index, and more weaknesses are expected ahead.

As the 5-day MA has crossed below the 10-day MA, a short term down trend has begun. However, the medium and longer term trend remained up. Immediate downside support for the key index now lies at 1340 to 1350 while the overhead resistance zone is at 1360 to 1370.

In view of a lack of fresh market impetus, the FBM KLCI is expected to continue its correction and consolidation mode after the recent rally to the high of 1370, and will continue to track the performance of key regional indexes.

Overnight, the Dow fell -265.42 points or -2.49% to close lower at 10,378.83. Today, the FBM KLCI is likely to trade within a range of 1338 to 1364.

This week's expected range: 1339 – 1383
Today’s expected range: 1338 – 1364

Resistance: 1355, 1359, 1364
Support: 1338, 1343, 1348

Stock to watch: TMCLIFE

FBM KLCI - marginally lower on profit taking

Stocks on Bursa Malaysia ended broadly lower yesterday, dragged by profit-taking activities in selective heavyweights amid the lack of market moving impetus. The FBM KLCI ended 0.95 point or 0.07% easier at 1,359.71, after opening 0.01 point lower at 1,360.65. Losers outpaced gainers by 409 to 255 while 281 counters were unchanged. Volume declined further to 675 million shares worth RM1.132 billion, from 699 million shares worth RM1.065 billion on Monday.

The FBM KLCI opened 0.11 point higher and traded to the intra-day high of 1362.24, profit-taking activities sent it to the intra-day low of 1357.95 before last minute buying of selected heavyweights lifted it to close a marginal 0.95 point lower. It formed a black spinning-top candlestick which indicates consolidation with a downward bias. The key index is now closing below its short term 5 and 10-day moving average (MA), hence, it might continue to move lower on selling pressure. Immediate support for the key index is at 1355 and 1350 while its overhead resistance is at 1370.

MACD continued to slide lower indicating the gain in downward momentum, and the MACD has just made a dead-cross over its signal line, giving out a sell signal. RSI(14) at 66.7 continued to slide lower but is still in the bullish zone, is gradually losing its bullishness. Stochastic at72.7 continued to slide lower indicating the down cycle is in force. Signals from the indicators are pointing toward a weak outlook and further downward correction is expected of the FBM KLCI.

The short term trend is on the verge of reversing downward as indicated by the 5-day MA; while the medium and long term trend remained up. Immediate support zone is at 1350 to 1358 while the immediate overhead resistance zone remained at 1366 to 1370.

In view of the start of the Ramadan month today and a lack of market moving impetus, the FBM KLCI is expected to continue its sideways course. Rotational play on lower liners is expected to remain active.

Overnight, the Dow fell -54.50 points or -0.51% to close lower at 10,644.25. Today, the FBM KLCI is likely to trade within a range of 1353 to 1368.

This week's expected range: 1339 – 1383
Today’s expected range: 1353 – 1367

Resistance: 1362, 1364, 1367
Support: 1353, 1355, 1357

Stock to watch: XINQUAN, XDL, MSPORTS, REDTONE

FBM KLCI - marginally higher on lower volume

Stocks on Bursa Malaysia ended broadly lower yesterday, but last minute buying of selected heavyweights helped keep the benchmark index in the positive territory. The FBM KLCI rose a marginal 0.21 point or 0.02% to close at 1360.66, after opening 0.11 point higher at 1360.56. Losers outpaced gainers by 402 to 293 while 256 counters were unchanged. Volume declined to 699 million shares worth RM1.065 billion from 866 million shares worth RM1.256 billion last Friday.

The FBM KLCI was basically in a correction mood throughout the day with the index moving in and out of the positive and negative territory in a tight trading range. It hit the intra-day low of 1358.35 before rebounding to touch the intra-day high of 1362.04, but finally settled at 1360.66 to form a Doji candlestick, which indicates indecision in the direction of the key index. The fact that it continued to close above 1360 after touching the low of 1358.35 also indicates good support for the benchmark index at this level. Immediate support for the index remained at 1350 to 1358, while overhead resistance is at 1370.

MACD continued to slide lower indicating the loss in upward momentum for the short term. RSI(14) at 68 has turned flat and continued to stay in the bullish zone. Stochastic at 75.9 continued to slide lower indicating the continuation of a short term down cycle or correction. Signals from the indicators reflected the correction mode of the key index.

The benchmark FBM KLCI has gone into a correction mode since it hit the new high of 1370.52 last week. It is now closing below the 5-day moving average (MA) but above the 10-day MA, indicating a short term correction. A close of the index below the 10-day MA at 1360.01 might see the key index sliding lower to re-test the psychological support at 1350. Nonetheless, the short, medium and long term trend of the key index remained up.

Overnight, the Dow rose +45.19 points or +0.42% to close at 10,698.75. Today, the FBM KLCI is likely to trade within a range of 1353 to 1368.

This week's expected range: 1339 – 1383
Today’s expected range: 1353 – 1368

Resistance: 1363, 1365, 1368
Support: 1353, 1356, 1358

Stock to watch: CBIP, DXN, SCABLE

FBM KLCI - consolidation expected

Stocks on Bursa Malaysia traded mixed last week with active profit-taking on heavyweight counters after the benchmark index hit fresh high for the year, while rotational play continued to prevail on lower liners. The FBM KLCI registered a fresh 29-month high at 1370.52 but closed the week off high at 1360.45, losing 0.47 point or 0.12% week-on-week. Weekly volume rose to 4.741 billion shares worth RM6.766 billion from 4.347 billion shares valued at RM6.610 billion the previous week.

The FBM KLCI opened 3.31 points higher at 1364.23 on last Monday and surged to the intra-day high of 1368.43 but succumb to heavy profit-taking activities to close off high at 1363.60. On Tuesday, the key index continued to scale new high of 1370.52 but failed to sustain the gain and closed just marginally higher. The key index continued to face heavy profit-taking activities for the rest of the week from Wednesday to Friday and closed the week 0.47 point lower at 1360.45. However, good buying support was seen at level below 1360 while strong overhead resistance was encountered at 1366 level.

On the weekly chart, the FBM KLCI formed a bearish black shooting-star candlestick which indicates top distribution, as the weekly volume increased to above the 30-week average of 4.089 billion shares. On the daily chart, the key index was practically forming bearish black candlestick everyday the whole of last week, signifying heavy distribution at level above 1360. In view of the bearish signal, the benchmark FBM KLCI is likely to continue its correction and consolidation in the coming week.

Currently, the FBM KLCI has closed below its immediate short term 5-day moving average (MA) indicating the index might continued to face short term selling pressure, but remained above its 10-day MA. The medium term 30-day MA and the longer term 120-day MA is still pointing northeast, indicating a bullish undertone from the longer term perspective. If the key index continues to correct, it might get immediate support by the 10 and 30-day MA at 1336 to 1359 level, with 1350 being the critical support level. Immediate overhead resistance zone for the FBM KLCI is now at 1366 to 1383, while immediate downside support zone lies at 1350 to 1359.

Weekly MACD continued to climb higher after making a golden-cross last week, indicating the medium term upward momentum is still intact. Daily MACD has, however, continued to slide lower, reflecting the short term correction mode of the key index. Weekly RSI(14) at 64.5 has hooked downward, but still in the bullish zone. Daily RSI(14) at 67.9 has crossed below the 70 level, indicating a short term correction in action. Weekly Stochastic at 95.9 continued to climb higher, indicating the medium term market strength is still strong, while daily Stochastic at 78.6 has crossed below the 80 level, indicating a short term down cycle has probably begun. Signals from the indicators are indicating two different scenarios where for the immediate short term, the key index might go into a correction mode, but remained bullish for the medium to longer term time frame.

The market may extend its consolidation this week, as investors stay cautious following slower economic growth in the US while they also await the bulk of the corporate results due to be released in August. On Wall Street, stocks fell on Friday after government data showed a larger-than-expected drop in July non-farm payrolls, giving investors a stark reminder that the economic recovery remains slow. However, rotational play on lower liner stocks may continue to dominate the local market.

The Dow was down -21.42 points or -0.20% lower to close at 10,653.56 on last Friday. This week, the FBM KLCI may trade within a range of 1339 to 1383, and for today it is likely to trade within a range of 1353 to 1369.

This week's expected range: 1339 – 1383
Today’s expected range: 1353 – 1369

Resistance: 1363, 1366, 1369
Support: 1353, 1356, 1358

FBM KLCI - lower on mixed market

Stocks on Bursa Malaysia ended mixed yesterday with active trading in selected lower liners and heavyweights. The FBM KLCI ended 0.66 points or 0.05% lower to close at 1362.08 dragged down by SIME DARBY which faced heavy selling pressure. Market breadth was positive with gainers leading losers by 362 to 349 while 276 counters were unchanged. Volume rose to 993 million shares valued at RM1.575 billion from 811 million shares worth RM1.188 billion registered on Wednesday.

The FBM KLCI opened 1.42 points higher at 1364.16 and surged to the intra-day high of 1364.82 within the first fifteen minutes, but heavy profit-taking activities sent the key index down to the intra-day low of 1358.52 before last minute buying of selected heavyweights lifted the key index to close off low at 1362.08. This again leads to the formation of a hammer-like candlestick which indicates buying support of key component stocks at 1360 level.

MACD has turned downward, coupled with the shorter histogram indicates a slowing in the upward momentum. RSI(14) at 70.1 continued to slide downward, but remained in the bullish zone. Stochastic at 82 continued to move lower, but still in the overbought zone. Signals from the indicators are reflecting the current correction mode of the FBM KLCI.

The FBM KLCI is now closing marginally below the 5-day moving average (MA) but is above its 10-day MA. If the key index corrects further, the 10-day MA may lend some support at 1357. The medium and longer term trend remained up as indicated by the respective MAs. Immediate overhead resistance remained at 1370 while the support zone is at 1350 to 1358.

The local market is likely to remain buoyant with the pick up in trading volume, and rotational play in lower liner stocks will continue to dominate while the key index consolidates.

Overnight, the Dow fell -5.45 points or -0.05% to close at 10,674.98. Today, the FBM KLCI is likely to trade within a range of 1351 to 1371.

This week's expected range: 1340 – 1383
Today’s expected range: 1351 – 1371

Resistance: 1365, 1368, 1371
Support: 1351, 1355, 1358

FBM KLCI - lower on mild profit taking

Stocks on Bursa Malaysia ended lower for the second day yesterday in line with Wall Street’s weak performance overnight, led by finance and gaming counters while buying interest was seen in oil and gas as well as utilities counters. The FBM KLCI fell 1.09 point or 0.08% to close at 1362.74, snapping an eight-day gain, after opening 0.32 point lower at 1363.51. Losers led gainers by 363 to 322 while 286 counters were unchanged. Volume fell to 811 million shares worth RM1.1 billion from 1.1 billion shares worth RM1.4 billion on Tuesday.

The FBM KLCI opened 0.32 point lower and rebounded to the positive territory briefly to touch the intra-day high of 1364.05. The key index was trading in the negative territory for a major part of the day and hit the intra-day low of 1359.19, losing 4.64 points, before late buying lifted it to close 1.09 point lower at 1362.74. This leads to the formation of a hammer-like candlestick which is a bottom reversal signal, hence, the index might continue its rebound to move higher today. Immediate resistance is expected at 1371, while support is at 1359.

MACD has turned flat, with its histogram turning shorter, indicating a slow down in the upward momentum. RSI(14) at 71 has hooked down, remained in the overbought zone, indicating the underlying strength is still strong. Stochastic at 84.6 continued to move lower, but remained in the overbought zone. Signals from the indicators reflected the correction mode of the key index, nevertheless, the underlying strength of the index is still strong. After the correction is over, the key index is expected to continue its up move.

Despite the correction, the FBM KLCI continues to close above its very short term 5-day moving average (MA). The 10 and 30-day MA remained pointing northeast indicating the current uptrend was unspoiled. If the index were to correct further downward, it is expected to get support from the 10-day MA at 1355 level. Immediate overhead resistance zone is at 1370 to 1383, while the support zone is at 1350 to 1360.

The local market is expected to remain buoyant with rotational play on lower liners remain active, while the FBM KLCI is expected to continue tracking the performance of regional key indexes.

Overnight, the Dow rose +44.05 points or +0.41% to close at 10,680.43. Today, the FBM KLCI is likely to trade within a range of 1355 to 1370.

This week's expected range: 1340 – 1383
Today’s expected range: 1355 – 1370

Resistance: 1365, 1367, 1370
Support: 1355, 1357, 1360

Stock to watch: TIMECOM, TWSCORP

FBM KLCI - marginally higher amid heavy profit-taking

Stocks on Bursa Malaysia ended lower yesterday as investors locked in profits after seven consecutive days of rally. The FBM KLCI rose 0.23 point or 0.02% to close at 1363.83 after hitting the intra-day high at 1370.52, which is a fresh high for the year. Losers led gainers by 479 to 250 while 270 counters were unchanged. Volume rose to 1.105 billion shares worth RM1.462 billion from 963 million shares worth RM1.283 billion on Monday.

The FBM KLCI opened with an up gap of 2.56 points and surged to the intra-day high of 1370.52 within the first thirty minutes of the day, and heavy profit-taking or distribution activities set in which sent the key index to the intra-day low of 1359.55 before last minute buying of selected blue-chips lifted the index off low to close marginally higher at 1363.83. This resulted in the formation of a black spinning-top candlestick with long upper and lower shadows, which indicates high volatility and hesitation of the key index to move higher. Immediate strong resistance is met at 1370 level.

MACD continued to move higher but start to taper-off, as shown by the shorter histogram, which indicated a slow down in the upward momentum. RSI(14) at 72.4 is marginally higher and is tapering off, indicating the waning of the upward strength. It has entered the overbought zone since three days ago and a correction is impending with the first sign of weakness. Stochastic at 90.1 has crossed below its slow stochastic, giving out sign of a correction. Signals from the indicators are pointing towards a toppish market, and a correction is in the brewing.

The FBM KLCI is currently above all its short, medium and long term moving averages (MA), indicating a strong uptrend condition. However, a correction is expected to take place. The 5-day MA will provide support at 1360 and the 10-day MA support is at 1352, hence, immediate support zone for the key index lies at 1350 to 1360. Immediate overhead resistance zone is at 1370 to 1383.

The market is expected to remain buoyant with rotational play in lower liners, and the FBM KLCI is likely to continue tracking the performance of major regional indexes.

Overnight, the Dow fell -38.00 points or -0.36% to close at 10,636.38 after a strong rally yesterday. Today, the FBM KLCI is likely to trade within a range of 1348 to 1375.

This week's expected range: 1340 – 1383
Today’s expected range: 1348 – 1375

Resistance: 1368, 1371, 1375
Support: 1348, 1354, 1359

FBM KLCI - moving higher amid profit taking

Stocks on Bursa Malaysia closed higher on continued buying interest and rotational play in selected heavyweights and lower liners. The benchmark FBM KLCI rose for the seventh consecutive days to close 2.68 points or 0.20% higher at 1363.60, after touching the intra-day high of 1368.43. Gainers outnumbered losers by 494 to 280 while 243 counters were unchanged. Volume rose to 963 million shares worth RM1.283 billion from 918 million shares worth RM1.422 billion last Friday.

The FBM KLCI opened 3.31 points higher at 1364.23 and surged to the intra-day high of 1368.43 within the first half an hour. Heavy profit-taking activities sent the key index down to the intra-day low of 1361.37 before last minute buying in selected heavyweights which lifted the index to close off low at 1363.60. The price action led to the formation of a shooting-star like Doji candlestick, which indicates heavy distribution and is a top reversal signal. However, it still requires another candle for confirmation.

MACD continued to climb higher indicating the continuation of upward momentum. RSI(14) at 72.3 continued to inch higher and is very bullish, nonetheless, it has entered the short term overbought zone, and a pull-back is expected ahead. Stochastic at 94.8 is indicating very strong market strength, has hooked down, indicating a possible correction ahead. Signals from the indicators are indicating a very bullish state of the FBM KLCI, however, it might pull-back due to the overbought conditions.
The FBM KLCI is currently above all its short, medium and long term moving averages, and the moving averages are all in an uptrend direction, indicating a very bullish state of the benchmark index. Immediate overhead resistance zone is at 1370 to 1383, while immediate support zone is at 1340 to 1350.

In view of the improved sentiments and positive news flow, the local market is expected to be active in rotational play and will continue to scale new high targeting at 1400, with intermittent profit taking correction.

Overnight, the Dow rose +208.44 points or +1.99% to close at 10,674.38. Today, the FBM KLCI is likely to trade within a range of 1353 to 1375.

This week's expected range: 1340 – 1383
Today’s expected range: 1353 – 1375

Resistance: 1368, 1371, 1375
Support: 1353, 1357, 1361

Stock to watch: WASEONG, MKLAND

FBM KLCI - Bullish but overbought

Stocks on Bursa Malaysia extended gains for the fourth week with the benchmark index, FBM KLCI closing at the year high to a fresh 29-month high since the rally started in April 2009, as the rise on overseas markets after most European banks passed the stress tests and better-than-estimated second quarter earnings from blue-chip companies ranging from the US to Japan enhance the global economic recovery outlook. The FBM KLCI finished 15.24 points or 1.13% higher week-on-week to 1,360.92 from 1,345.68 the previous Friday. Weekly volume rose to 4.347 billion shares, valued at RM6.610 billion, from 4.175 billion shares, worth RM6.527 billion, traded the previous week.

The FBM KLCI opened last Monday with an up gap of 4.86 points at 1350.54, and continued to trade above the psychological resistance level of 1350. Profit-taking activities on Tuesday only managed to bring the key index down to 1348.29, the intra-week low, but the bull continued to push the index higher for the rest of the week with intra-day profit-taking activities continued to take place as the key index traded higher to close at the week high of 1360.92.

On the weekly chart, the FBM KLCI formed a white candlestick which is a bullish continuation signal to the current uptrend. On the daily chart, the key index was up for the sixth days consecutively and is in a bullish state, and the key index is expected to continue its up move to test the next higher level targets at 1370 and 1383.

Weekly MACD has made a bullish cross-over on its signal line, a golden-cross, which indicates the longer term momentum of the key index has turned upward. Daily MACD continued to move higher and is in a bullish state. Weekly RSI(14) at 64.6 continued to move higher and is in the bullish zone. Daily RSI(14) at 71 is very bullish, has nevertheless, entered the short term overbought zone. Weekly Stochastic at 94.7 continued to gain further, indicating the mid term strength is very strong, but is overbought. Daily Stochastic at 97.4 is very strong and continued to stay in the short term overbought zone. Signals from the indicators are pointing towards a strong short to medium term uptrend; with short term overbought situation flashing, hence, profit-taking activities is expected to continue to cap gains as the index move higher.

The FBM KLCI is currently above all its short, medium and long term moving averages. The immediate short term trend is up, medium term trend has started to turn upward while the longer term trend remained up, indicating a bullish state of the benchmark index. Immediate overhead resistance zone for the key index now lies at 1370 to 1383, while the immediate support zone is at 1345 to 1350.

In view of the improving economic climate, and the continued released the corporate results locally which are expected to be positive will continued to support the local market.

The Dow was down a marginal -1.22 points or -0.01% lower to close at 10,465.94 on last Friday. This week, the FBM KLCI may trade within a range of 1340 to 1383, and for today it is likely to trade within a range of 1350 to 1371.

This week's expected range: 1340 – 1383
Today’s expected range: 1350 – 1371

Resistance: 1363, 1365, 1371
Support: 1350, 1353, 1357