Millionaire Trend Trader: FBM KLCI - bullish close on 31-month high

Wednesday, September 1, 2010

FBM KLCI - bullish close on 31-month high

Stocks on Bursa Malaysia closed mixed on Monday while the benchmark FBM KLCI index continued to chart new high. The FBM KLCI rose 11.44 points or 0.81% to close at 1422.49 on Monday, a 31-month high, since February 2008, driven by strong buying interest in key heavyweights like Genting, Maybank and Sime Darby. Market breadth was negative with losers led gainers by 377 to 334 while 281 counters were unchanged. Turnover increased to 769 million shares valued at RM1.759 billion compared with last Friday's 762 million shares worth RM1.532 billion. Bursa Malaysia was closed for the National Day celebration yesterday.

The FBM KLCI opened 1.93 points higher at 1412.98 and surged to the intra-day high of 1428.44 within the first half an hour and corrected itself on profit-taking activities. However, the key index was trading in the positive territory throughout the day, and traded higher after the intra-day correction. Chart-wise, it formed a bullish white candlestick which marked a continuation of the uptrend, and is likely to test the next level of resistance at 1436.

Daily MACD continued to climb higher and so is its histogram, signifying a strong upward momentum. RSI(14) at 79.9 is moving higher into the very bullish zone, and is short term overbought. Stochastic at 95.5 has hooked up and crossed above its slow stochastic, remained in the short term overbought zone, indicates very strong market strength.

The underlying uptrend of the FBM KLCI remained intact, with the short term 5 and 10-day moving averages providing support at 1410 and 1400 level. Immediate overhead resistance zone is at 1428 to 1445, while support zone is at 1400 to 1410.

In view of the announcement of corporate results has just ended and a lack of fresh leads, while weak external economic indicators might continue to influence sentiment on the local bourse, the market is likely to consolidate.

Overnight, the Dow rose +4.99 points or +0.05% higher to close at 10,014.72 after losing 141 points on Monday. Today, the FBM KLCI is likely to trade within a range of 1399 to 1444.

This week's expected range: 1370 – 1445
Today’s expected range: 1399 – 1444

Resistance: 1429, 1436, 1444
Support: 1399, 1406, 1414

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Wednesday, September 1, 2010

FBM KLCI - bullish close on 31-month high

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