Millionaire Trend Trader: FBM KLCI - lower on mixed market

Friday, August 6, 2010

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

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Friday, August 6, 2010

FBM KLCI - lower on mixed market

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