Millionaire Trend Trader: FBM KLCI - another fresh high for the year

Wednesday, August 18, 2010

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

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Wednesday, August 18, 2010

FBM KLCI - another fresh high for the year

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