Millionaire Trend Trader: FBM KLCI - continued to close at fresh year high

Thursday, August 19, 2010

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

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Thursday, August 19, 2010

FBM KLCI - continued to close at fresh year high

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