FBM KLCI - fraction of a point below 1,500

Stocks on Bursa Malaysia ended mostly lower yesterday but modest gains in finance heavyweights Maybank and CIMB managed to push the benchmark index into the positive territory. Lack of follow-through support after the market barometer crossed the 1,500-mark in early trade, kept the benchmark index in the red most of the day. Investors were cautious and the global markets were volatile ahead of the US Federal Reserve's monetary policy meeting next week. The benchmark FBM KLCI ended almost unchanged at 1499.44, making a marginal gain of 0.33 of a point or 0.02%. Decliners led advancers by 427 to 350 while 287 counters were unchanged. Turnover was lower at 1.137 billion shares worth RM1.634 billion from 1.169 billion shares worth RM1.636 billion on Wednesday.

The FBM KLCI opened 1.08 points higher at 1500.19 and climb to the intra-day high of 1501.57 in the first hour of trade, heavy profit-taking activities that appeared pressed the key index to the intra-day low of 1495.55, before bargain hunting activities that surfaced in the afternoon lift the key index off low to closed at 1499.44. Chart-wise, the FBM KLCI formed a Doji candlestick with a long lower shadow which indicates the key index was taking a pause, and was undecided to move further. Hence, the key index might goes into consolidation before making its move to challenge the historical high level of 1524.69.

MACD continued to slide lower but in a much reduced pace and is turning almost flat, its histogram, however, is getting shorter upward, indicating a reduction in the bearish momentum. RSI (14) at 68.9 is marginally higher, but is tapering off, indicating a slow down in the upward momentum. Stochastic at 79.5 continued to climb higher, signifying the short term up cycle is still intact. Mixed signals of the indicators are indicating a possible consolidation of the FBM KLCI.

The FBM KLCI is currently still in a bullish state as it stays above all its short, medium and long term moving averages. However, from the readings of the indicators, it shows sign of tiredness, hence, might goes into consolidation before picking up steam to challenge the historical high of 1524.69. Overnight, the Dow fell -12.33 points or -0.11% lower to close at 11,113.95. Today, the FBM KLCI is likely to trade within a range of 1490 to 1508.

This week's expected range: 1459 – 1516
Today’s expected range: 1490 – 1508

Resistance: 1503, 1505, 1508
Support: 1490, 1493, 1496

Stocks to watch: GHLSYS, KFC, VS

FBM KLCI - retreated from new high on heavy profit-taking

Stocks on Bursa Malaysia ended mixed yesterday with gains seen in the finance counters amid weak performances of the overseas market, following the slump at the Hong Kong and China stock markets. The FBM KLCI closed 2.17 points or 0.14% higher at 1499.11, after briefly touching 1504.19. Decliners outnumbered advancers by 497 to 328 while 283 counters were unchanged. Turnover was lower at 1.169 billion shares worth RM1.636 billion from Tuesday’s 1.374 billion shares worth RM1.874 billion.

The FBM KLCI opened 0.74 point lower at 1496.20 but surged to the intra-day high of 1504.37 within the first half an hour after market opened. Heavy profit-taking activities immediately appeared which sent the key index down to 1496.73 before late afternoon bargain hunting activities lift the key index to close off low at 1499.11, just 0.89 points below the 1,500-point key psychological resistance level. Chart-wise, the FBM KLCI formed a shooting-star candlestick, which is a bearish top reversal signal, hence, the key index is likely to correct downward further. Immediate support zone for the key index is found at 1493 to 1478, while the overhead resistance zone is at 1500 to 1505.

MACD continued to slide lower, however, its histogram continued to turned shorter upward, indicating a slow down in the bearish downward momentum, and the building up of positive momentum. RSI (14) continued to climb higher into the bullish zone and is now at 68.7. Stochastic is at 70.5, and has started to move higher, indicating the beginning of an up cycle. Signals from the indicators are signaling a bullish outlook for the FBM KLCI in the short term.

The underlying uptrend of the FBM KLCI remained intact, and as the FBM KLCI has made an attempt in testing the 1500-point level, it is expected to continue testing the level in the near term. Overnight, the Dow fell -43.18 points or -0.39% lower to close at 11,126.28. Today, the FBM KLCI is likely to trade within a range of 1487 to 1513.

This week's expected range: 1459 – 1516
Today’s expected range: 1487 – 1513

Resistance: 1504, 1508, 1513
Support: 1487, 1491, 1495

Stocks to watch: DNP, KFC, CSCSTEEL, SAPCRES, YTLLAND, KIANJOO

FBM KLCI - marching towards 1,500-points level

Stocks on Bursa Malaysia ended higher yesterday with the benchmark FBM KLCI marched near the 1,500-point psychological level, boosted by gains in plantation counters and selected heavyweights. The FBM KLCI gained 5.50 points or 0.37% to close at 1496.94 after opening 2.46 points higher at 1493.90. Market breadth was positive with gainers led losers by 454 to 361 while 284 counters were unchanged. Turnover was higher at 1.375 billion shares worth RM1.874 billion from 1.131 billion shares worth RM1.470 billion on Monday.

The FBM KLCI opened with an up gap of 2.46 points at 1493.90 and moved to the morning session’s high of 1495.10 before profit-taking activities sent it to the intra-day low of 1491.81 at mid day. The key index, however, recovered gradually in the afternoon session, and a last minute buying of selected heavyweights helped push the key index to close at the day’s high at 1496.94. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were taking control after a few days of suppression by the bear. Hence, the key index is expected to continue its march towards the 1500-point psychological resistance level.

MACD starts to turn flat indicating a slow down in the bearish momentum, and a first sign of upswing from its histogram which has already turned shorter upward. RSI (14) at 67.6 has moved higher into the bullish zone from the mildly bullish zone the day before, and is expected to continue its momentum to move higher. Stochastic at 64.8 has started to turn upward slightly, and is above its slow stochastic, is getting ready for an up move.
Signals from the indicators are indicating that the short term consolidation of the FBM KLCI is nearing an end, and is getting ready for an attack of the higher targets.

The FBM KLCI is gradually turning bullish for the short term as the 5-day moving average (MA) has just crossed above the 10-day MA, while the medium to longer term uptrend remained intact.

With the substantial positive leads on the domestic front, including the Economic Transformation Programme projects and the pre-election hypes, these factors will help to push the market higher till end of this year.

Overnight, the Dow rose +5.41 points or +0.05% higher to close at 11,169.46. Today, the FBM KLCI is likely to trade within a range of 1488 to 1503.

This week's expected range: 1459 – 1516
Today’s expected range: 1488 – 1503

Resistance: 1499, 1501, 1503
Support: 1488, 1490, 1493

Stocks to watch: DXN, TSM

FBM KLCI - consolidation

Stocks on Bursa Malaysia ended higher yesterday as gains in plantation counters and key heavyweights sustained the market's positive trend, and keen participation of retail investors also lifted the share prices of lower liners. However, profit taking narrowed overall gains. The benchmark FBM KLCI rose 0.80 of a point or 0.05% to 1491.44 after opening 2.89 points higher at 1493.53. Gainers led losers by 511 to 268 while 310 counters were unchanged. Turnover decreased to 1.131 billion shares worth RM1.470 billion from the1.225 billion shares worth RM1.596 billion on last Friday.

The FBM KLCI opened with an up gap of 2.89 points at 1493.53, and surged to the intra-day high of 1495.74 within the first thirty minutes of the day. Profit-taking activities immediately appeared and sent the key index to the intra-day low of 1491.25. Some late afternoon buying did lift the key index off low, nevertheless, the bear appeared at last minute and sent the key index down to close near the day’s low. Chart-wise, the FBM KLCI formed a bearish Harami candlestick which indicates sellers were more dominant. Hence, the key index is likely to continue its range-bound consolidation. Immediate overhead resistance remained at 1496 to 1503 while the immediate downside support zone is at 1480 to 1476, where 1476 is provided by the 30-day moving average (MA).

MACD continued to slide lower with its histogram growing longer into the negative zone, indicating the downward momentum is building up, albeit the MACD line is still above its zero line. RSI (14) at 64.7 has turned up slightly, reflecting the current sideways condition of the key index, and the RSI reading is still in the mildly bullish zone. Stochastic is basically flat, reflecting the current consolidation mode of the key index, and it may either move up or downward after this.

The 5-day MA is currently below the 10-day MA, indicating a downward bias for the immediate short term. Signals from the indicators are pointing toward more consolidation for the FBM KLCI with a downward bias for the short term. The medium to longer term uptrend, nonetheless, remained intact.

The overall market is expected to remain in a rotational play mode with lower liners taking the centre stage while key heavyweights consolidate. Plantation stocks are expected to continue their uptrend. Overnight, the Dow rose +31.49 points or +0.28% higher to close at 11,164.05. Today, the FBM KLCI is likely to trade within a range of 1485 to 1502.

This week's expected range: 1459 – 1516
Today’s expected range: 1485 – 1502

Resistance: 1494, 1497, 1502
Support: 1485, 1488, 1490

Stock to watch: KINSTEL, INCKEN, MUHIBAH, TDM

FBM KLCI - likely to remain range-bound

Stocks on Bursa Malaysia ended last Friday easier amid cautious underlying sentiment. Key heavyweight stocks basically went into consolidation after the Budget 2011 announcement. The benchmark FBM KLCI lost 0.38 point or 0.03% to close at 1490.64 after opening 3.57 points higher at 1494.59. The key index, nonetheless, gained 0.78 point or 0.05%, week-on-week, from 1489.86 the previous Friday. Weekly volume rose to 6.971 billion shares valued at RM8.674 billion compared with the 5.76 billion shares worth RM9.33 billion the previous week.

The FBM KLCI staged a continued correction last Monday following the two days losses on the previous week to close 9.61 points lower at 1480.70. Tracking the steadier performance in the regional indexes, the FBM KLCI rebounded to close 7.95 points higher to 1488.65 on Tuesday. In a knee-jerk reaction to the steep 165 points drop of the DJIA overnight, the FBM KLCI gapped down 8.33 points to 1480.32 in early trading on Wednesday and touched the intra-week low of 1476.56, losing as much as 12.09 points at its worst, but recovered much of its lost ground to close a marginal 1.87 points lower to 1486.78. Taking cue from the 129 points rebound on Wall Street overnight, the key index rose 4.24 points to 1491.02 on Thursday, and on Friday, the key index lost 0.38 point on heavy profit-taking to 1490.64 after opening 3.57 points higher at 1494.59, and touched the intra-week high of 1496.48.

On the weekly chart, the FBM KLCI formed a Doji candlestick with long lower shadow which indicates indecision of the market to move further and was subjected to heavy profit-taking activities. However, the long lower shadow also indicates good buying support by bargain hunters when the key index corrects downward. The medium to longer term uptrend remained intact as the key index continued to close above the 5-week moving average (MA). Immediate support for the FBM KLCI on the weekly chart is at 1476, provided by the 5-week MA.

On the daily chart, the FBM KLCI formed a dark-cloud-cover like candlestick on last Friday, which indicates heavy profit-taking activities. With this candlestick pattern formation, the key index is likely to continue its sideways consolidation or range-bound trade in the coming week. Immediate overhead resistance zone is at 1496 to 1503 while the immediate downside support zone is at 1474 to 1480. If the key index is able to breakthrough the 1500 psychological resistance level, there is a strong likelihood that it will move further the test the historical high of 1524.69.

Weekly MACD continued to climb higher, however, its histogram is getting shorter, indicating a slow down in the medium term upward momentum. In stark contrast, daily MACD continued to move lower, indicating the continuous loss in the key index’s upward momentum and is moving into a range-bound mode.

Weekly RSI (14) at 78.4 has continued to move higher, but is tapering off. The key index has moved into the overbought zone for ten weeks already, hence, is likely to correct itself. Daily RSI (14) at 64.3 has hooked down slightly and continued to stay in the mildly bullish zone.

Weekly Stochastic at 94.5 has turned flat, and continued to stay in the overbought zone. Daily Stochastic at 64.1 too has turned flat, reflecting the sideways mode of the FBM KLCI. Signals from the indicators are pointing towards a strong likelihood of further consolidation or range-bound trade for the FBM KLCI.

For the coming week, stocks prices on Bursa Malaysia are expected to be range-bound amid an underlying cautious sentiment on concerns over a slowdown in China and the outcome of the Group of 20 (G20) meeting. The Economic Transformation Programme (ETP) roadmap will be announced today, and this may give some boost to the construction sectors. The overall market is expected to remain in rotational play with those companies that benefit from the ETP continued to shine.

The Dow fell -14.01 points or -0.13% lower to close at 11,132.56 on last Friday. This week, the FBM KLCI may trade within a range of 1459 to 1516, and for today it is likely to trade within a range of 1480 to 1503.

This week's expected range: 1459 – 1516
Today’s expected range: 1480 – 1503

Resistance: 1495, 1499, 1503
Support: 1480, 1485, 1488

FBM KLCI - resumed its short term uptrend

Stocks on Bursa Malaysia ended broadly higher today with continued buying in heavyweights such as CIMB, but some of the bourse's earlier gains were trimmed on profit taking. The FBM KLCI rose 4.24 points or 0.29% at 1491.02 after opening 3.46 points higher at 1490.24. Gainers led losers by 459 to 301 while 316 counters were unchanged. Volume declined to 1.429 billion shares worth RM1.847 billion from Wednesday’s 1.488 billion shares worth RM1.802 billion.

Taking cue from the hefty rise on Wall Street overnight, the FBM KLCI opened with an up gap of 3.46 points and climb to the intra-day high of 1495.84 in early morning trade. However, profit-taking activities that surfaced sent the key index to the intra-day low of 1488.44, wiping out much of the gains, before late afternoon buying in heavyweights lift the key index off low to close at 1491.02.

Chart-wise, the key index formed a Doji-like candlestick with a longer upper shadow, which indicates the bear was still actively trying to block the bull from advancing further. However, the bull still managed to gain grounds by advancing 4.24 points to close above the 1490-point level. The key index is now closing above the 5 and 10-day moving average (MA), and is likely to continue moving higher to re-test the 1500 psychological level.

MACD continued to slide lower, but its histogram has started to turn shorter, indicating a slow down in the downward momentum. RSI (14) has hooked up, and the current reading of 64.7 indicates the key index is still in the bullish zone. Stochastic at 64.2 has curved up and touched the slow stochastic line, indicating that the short term correction is probably over and may resume its up cycle. Signals from the indicators are indicating that the short term correction of the FBM KLCI has taken a pause for the time being, and may continue to remain range-bound with an upward bias.

The FBM KLCI has resumed its short term uptrend, and may continue to move higher to re-test the 1500 psychological resistance level, nonetheless, it will still face active challenges from the bear which try to block its way up. Immediate overhead resistance zone is at 1496 to 1503, while the immediate downside support zone is at 1480 to 1472.

As the week ends, investors are likely to take a cautious approach heading into the weekend, and the market is likely to remain active with rotational play on second and third liner stocks while the heavyweights consolidate. Overnight, the Dow rose +38.60 points or +0.35% higher to close at 11,146.57. Today, the FBM KLCI is likely to trade within a range of 1480 to 1503.

This week's expected range: 1461 – 1524
Today’s expected range: 1480 – 1503

Resistance: 1495, 1499, 1503
Support: 1480, 1484, 1488

Stock to watch: YTLLand

FBM KLCI - counter attack!

Stocks on Bursa Malaysia ended off its low yesterday with buying in Genting, AirAsia and DiGi helping to lift the market amid bearish sentiment and declines across regional bourses, following Dow’s loss of more than 1% overnight. The FBM KLCI fell a marginal 1.87 points or 0.13% to 1486.78. It had opened lower by 8.33 points at 1480.32 and dropped as much as 12 points earlier in the day. Decliners outnumbered advancers by 408 to 385, while 293 counters were unchanged. Overall volume declined to 1.488 billion shares worth RM1.802 billion from Tuesday’s 1.499 billion shares worth RM1.819 billion.

The FBM KLCI opened with a down gap of 8.33 points at 1480.32 following DJIA’s loss of 165 points or 1.48% overnight. It plunged to the intra-day low of 1476.56, losing as much as 12.09 points at its worst, but recovered gradually as the day progressed and touched the intra-day high of 1490.03 before late profit-taking sent the key index to close off high.

Chart-wise, the FBM KLCI formed a piercing-line candlestick which indicates the fight back of the bull after retreating on the bear’s attack. As mentioned in yesterday’s analysis, the resistance at 1490.51 posted by the 5-day moving average (MA) has indeed stopped the key index from advancing further, and the key index had continued to close below the short term 5 and 10-day MAs.

MACD continued to slide lower, indicating the continued increase in downward momentum. RSI (14) at 62.6 has again hooked downward, nonetheless, it is still in the mildly bullish zone. Stochastic at 57 also continued to slide lower, indicating a continued weakening of the short term momentum and the down cycle is still in force. Signals from the indicators are pointing towards a likely further consolidation and range-bound for the FBM KLCI. Having said so, the candlestick on the other hand, actually signaled a probable continuation of its counter attack to move higher.

For the immediate short term, the FBM KLCI is likely to remain range-bound with its immediate overhead resistance zone remained at 1490 to 1500, with 1500 being the key resistance level, while the immediate support zone is at 1476 to 1470 provided by the 20 and 30-day MAs. The longer term uptrend remained intact.

With the overall volume maintaining above the 1 billion shares level, the market is expected to remain buoyant with rotational play continued to remain active. Overnight, the Dow rebounded strongly by +129.35 points or +1.18% higher to close at 11,107.97. Today, the FBM KLCI is likely to trade within a range of 1465 to 1503.

This week's expected range: 1461 – 1524
Today’s expected range: 1465 – 1503

Resistance: 1493, 1498, 1503
Support: 1465, 1471, 1478

Stock to watch: MUHIBAH

FBM KLCI - technical rebound

Stocks on Bursa Malaysia ended higher yesterday in a rotational play on heavyweights and lower liners while regional markets were largely mixed. The FBM KLCI rose 7.95 points or 0.54% to 1488.65, after opening higher by 3.04 points at 1483.74. Gainers led losers by 438 to 369 while 276 counters were unchanged. Volume jumped to 1.499 billion shares worth RM1.819 billion from Monday’s 1.33 billion shares worth RM1.61 billion.

The FBM KLCI rebounded to opened 3.04 points higher at 1483.74, and climb to the intra-day high of 1488.77 in early morning trade before profit-taking activities sent the key index down to its intra-day low of 1483.04. The late afternoon bargain hunting of selected heavyweights helped push the key index up to close near the day’s high at 1488.65. Chart-wise, the FBM KLCI formed a bullish Harami candlestick pattern, which indicates a counter-attack by the bull after falling for three consecutive days from the recent high of 1503.82. The key index has rebounded to close above its 10-day moving average (MA), however, is still below the 5-day MA which is currently at 1490.51, if the key index is able to break above this immediate resistance, then it might continue its up move to re-test the 1500 level.

MACD continued to slide lower, indicating an increased in the downward momentum. RSI (14) at 64.1 has hooked up, and is still in the bullish zone. Stochastic at 60.8 has continued its downward slide, indicating a continuation in the down cycle and the loss of market momentum. Mixed signals from the indicators are pointing toward a likely consolidation of the key index with a downward bias.

For the short term, The FBM KLCI is likely to be range-bound with a downward bias, while the medium to longer term uptrend still remained intact. Immediate overhead resistance zone is at 1490 to 1500, while the downside support zone is at 1480 to 1468.

Overnight, the Dow fell -165.07 points or -1.48% lower to close at 10,978.62. Today, the FBM KLCI is likely to trade within a range of 1479 to 1495.

This week's expected range: 1461 – 1524
Today’s expected range: 1479 – 1495

Resistance: 1491, 1493, 1495
Support: 1479, 1481, 1484

Stock to watch: MKLAND, EQUINE

FBM KLCI - a healthy correction

Stocks on Bursa Malaysia ended broadly lower yesterday with the market dragged down by losses registered mainly in heavyweight counters, including PLUS. Continuous losses in most heavyweight counters across the board offset gains in the plantation related stocks. The FBM KLCI fell 9.61 points or 0.61% to 1480.7 after opening higher at 1491.23. Losers outnumbered gainers by 468 to 299 with 298 counters unchanged. Turnover jumped to 1.33 billion shares worth RM1.61 billion from 1.02 billion shares worth RM1.65 billion last Friday.

As expected, the FBM KLCI continued its corrective move southward. The key index opened 1.37 points higher at 1491.23 and climb to the intra-day high of 1494.96 before selling pressure sent it down to the intra-day low of 1478.90, losing 10.96 points at its worst before late bargain hunting lift the key index off low to close at 1480.70. Chart-wise, the key index formed a bearish long black candlestick which indicates sellers were dominant throughout the day. The key index found its support at the 1480 level when it rebounded to close above it. However, the key index is now closing below the 5 and 10-day moving averages (MA), and is expected to slide lower towards the next support level at 1474 provided by the 20-day MA and next at 1467 by the 30-day MA.

MACD continued to slide lower, indicating a pick up in downward momentum. RSI (14) at 60.2 continued its slide downward, and is now at the edge of the mildly bullish zone, indicating the market strength is turning weak. Stochastic at 67.8 has slide below the 80 mark, indicating the continuation of the down cycle. Signals from the indicators are painting a short term bearish outlook, and the key index is likely to further consolidate.

For the short term, the FBM KLCI has started to turn downtrend. However, the medium to longer term uptrend still remain intact. The current correction is viewed as a healthy correction, technically, as the key index should take a breather after rallying upward for almost two months before it plan for its next attack to the level above 1500. For the longer term investors, this correction should be view as an opportunity to accumulate quality stocks at lower price level.

Overnight, the Dow rose +80.91 points or +0.73% higher to close at 11,143.69. Today, the FBM KLCI is likely to trade within a range of 1458 to 1501.

This week's expected range: 1461 – 1524
Today’s expected range: 1458 – 1501

Resistance: 1491, 1501, 1511
Support: 1458, 1468, 1474

Stock to watch: KINSTEL, LIONDIV, ANNJOO, INCKEN, DUTALND, PELIKAN

FBM KLCI - expect more correction and consolidation ahead

Stocks on Bursa Malaysia ended broadly lower last Friday on profit-taking ahead of the 2011 Budget announcement. The market started the day on a negative note as investors trimmed their positions amid a weaker overnight close on Wall Street. The Budget, however, did not bring much of surprise goodies to the market, and the benchmark index has indeed discounted whatever positive news from the budget as it had a good run up before the budget announcement. The benchmark FBM KLCI ended last week with a gain of 8.45 points or 0.57%, week-on-week, to 1489.86, from 1481.41 the previous Friday. Weekly volume increased to 5.76 billion shares valued at RM9.33 billion compared with 5.23 billion shares worth RM8.05 billion last week.

The FBM KLCI opened last week with an up gap of 4.73 points at 1486.14, taking cue from the positive closing on Wall Street with the Dow closing above the 11,000 mark on speculation the latest data would push the Federal Reserve to launch another round of economic stimulus, and the key index closed 6 points higher at 1487.41 on Monday.

On Tuesday, the FBM KLCI opened higher with an up gap of 2.88 points at 1490.20, and surged to the intra-day high of 1493.29, however, profit-taking activities pressed it lower to close 0.84 of a point lower at 1486.57.

With the positive close on Wall Street overnight, coupled with steadier key regional markets spurred buying interest in the local market, led by gains in plantation-related stocks amid higher crude palm oil (CPO) prices, the benchmark FBM KLCI rose 10.40 points to close Wednesday at 1496.97.

The key index extended its upward momentum on Thursday, hitting a new 33-month high of 1503.82 in early trade, encouraged by gains in overseas bourses before reversing downward owing to strong profit-taking activities to close 0.59 point lower to 1496.38 on Thursday. Continuing the profit-taking activities ahead of the Budget announcement, coupled with the generally weak overseas market, the FBM KLCI loss 6.52 points or 0.44% to close Friday at 1489.86.

On the weekly chart, the FBM KLCI formed a shooting-star candlestick which is a top reversal candle pattern. It indicates heavy selling activities which pressed the key index off high after touching the year high of 1503.82. On the daily chart, the key index formed a black candlestick which is a confirmation to the bearish dark-cloud-cover or hanging-man like candlestick formed on Thursday. With the bearish signals on both the weekly and daily chart, the key index is expected to further corrects downward or consolidate in the coming week. Immediate downside supports for the Key index are found at 1483, 1474 and 1465 provided by the 10, 20 and 30-day moving average (MA), while immediate overhead resistance zone remained at 1500 to 1524. The key index is expected to re-test the 1500 zone level after the correction.

Weekly MACD continued to move higher, albeit its weekly histogram has turned shorter, indicates the medium to longer term upward is still positive. Daily MACD, however, has turned downward, after briefly crossing its signal-line, indicating the short term momentum has again turned southward and the key index will goes into a short term correction or consolidation mode.

Weekly RSI (14) continued to move higher and is currently at 78.3, indicates a very bullish state of the medium term strength, albeit is in the overbought zone. Daily RSI (14) at 68 has moved lower into the bullish zone from the short term overbought or very bullish zone, reflecting the current correction of the key index, nonetheless, the key index is still bullish.

Weekly Stochastic continued to move higher, is currently at 94.5, and is above its weekly slow Stochastic, indicates a very strong medium term market momentum. Daily Stochastic at 85.2, however, has crossed below its slow stochastic and continued to move lower, reflecting the current correction of the key index.

Signals from the indicators are indicating that the medium to longer term technical conditions of the FBM KLCI is still bullish, whilst the short term is likely to go into a correction or consolidation. Having said so, the underlying medium to longer term trend of the FBM KLCI is still positive and remained in the uptrend direction. The short term uptrend may be challenged, as the key index is currently closing below the 5-day MA and may continue to move lower to test the support by the 10, 20 and 30-day MA. The key index is expected to re-challenge the 1500 level when the correction is over.

The overall market is expected to remain in a rotational play mode, with those companies that benefit from the budget continue to shine, whilst the key index takes a breather after a long up move for almost three months.

The Dow fell -31.79 points or -0.29% lower to close at 11,062.78 on last Friday. This week, the FBM KLCI may trade within a range of 1461 to 1524, and for today it is likely to trade within a range of 1476 to 1503.
This week's expected range: 1461 – 1524
Today’s expected range: 1476 – 1503

Resistance: 1494, 1499, 1503
Support: 1476, 1481, 1485

FBM KLCI - marginally lower on profit-taking

Stocks on Bursa Malaysia ended lower yesterday with the benchmark index giving up its earlier gains on profit-taking activities. Continued buying of key plantation stocks helped the index break the 1,500-points psychological barrier earlier in the day. Speculation of potential budget goodies coupled with positive sentiment in the US and regional markets prompted buying interest in the local market. The FBM KLCI fell a marginal 0.59 point or 0.04% lower at 1496.38, off its intra-day high of 1503.82 after opening 3.87 points higher at 1500.84. Losers led gainers by 455 to 348 while 302 counters were unchanged. Turnover rose to 1.274 billion shares worth RM2.041 billion, from Wednesday’s 1.119 billion shares valued at RM2.03 billion.

The FBM KLCI opened with an up gap of 3.87 points at 1500.84 and surged to the intra-day high of 1503.82 within the first five minutes, profit-taking activities immediately set in which sent the key index to its intra-day low of 1490.57 before the last hour bargain hunting activities which lifted the key index to close just 0.59 point lower at 1496.38. Chart-wise, the FBM KLCI formed a bearish dark-cloud-cover candlestick which is a top reversal pattern, and the key index is likely to further correct downward, and remain volatile around the 1500-points level before it can stay firm above it, as many investors will take opportunity to sell into strength when the key index reach this historical height level.

MACD continued to move higher, and has just crossed its signal-line to make a “golden- cross”, as shown by the histogram which is above the zero-line now. This indicates the momentum has again tuned positive and likely to continue moving upward. RSI (14) at 74.7 has, however, hooked down reflecting the correction to the key index, nevertheless, it is still remained in the very bullish zone. Stochastic at 90.4 has hooked downward and just crossed below its slow stochastic indicating a consolidation.

The underlying trend of the FBM KLCI continued to remain bullish, as it is still above all its short, medium and long term moving averages. Immediate support zone for the key index now lies at 1490 to 1481 provided by the 5 and 10-day moving averages, while its overhead resistance zone remained at 1500 to 1524.

The market is expected to remain active before the Budget 2011 announcement at 4.00 pm today. Overnight, the Dow fell -1.51 points or -0.01% lower to close at 11,094.57. Today, the FBM KLCI is likely to trade within a range of 1476 to 1517.

This week's expected range: 1445 – 1520
Today’s expected range: 1476 – 1517

Resistance: 1503, 1510, 1517
Support: 1476, 1483, 1490

FBM KLCI - marching towards 1500

Stocks on Bursa Malaysia closed higher yesterday, led by gains in plantation-related stocks amid higher crude palm oil (CPO) prices. The positive close on Wall Street overnight, coupled with steadier key regional markets spurred buying interest in the local market. The benchmark FBM KLCI rose 10.40 points or 0.70% to close at 1496.97 after opening 2.99 points higher at 1489.56. Gainers beat losers by 577 to 235 while 256 counters were unchanged. Volume rose to 1.199 billion shares valued at RM2.026 billion from 1.169 billion shares worth RM1.90 billion on Tuesday.

The FBM KLCI opened 2.99 points higher at 1489.56 and continued to move higher throughout the day with intermittent profit-taking activities along the way. A last minute buying in selected heavyweights pushed the key index to close at the high of the day at 1496.97. Chart-wise, the key index formed a bullish Marubozu candlestick which indicates buyers were in control throughout the day. The FBM KLCI is now charting another new high for the year and marching steadily towards the 1500 mark. The market sentiment is very bullish and the key index is expected to challenge the historical high of 1524.69 charted on January 14, 2008 soon if it is able to breakthrough the 1500 point psychological resistance level.

MACD has turned upward after falling for one day, is approaching its signal-line, albeit still below it, which indicates a pick up in the upward momentum. RSI (14) at 75.3 has hooked upward strongly and moved higher up into the short term overbought zone, indicating a very bullish state of the key index. Stochastic at 93.5 too has turned upward, indicating a continuation of the bullish up cycle. Signals from the indicators are indicating a very bullish state of the FBM KLCI, hence, it is likely to continue its current uptrend to move higher.

The underlying uptrend of the FBM KLCI remained very bullish as indicated by the short, medium and long term moving averages (MA) that are well separated. Immediate overhead key resistance levels are found at 1500, 1516 and 1524, while the immediate downside support zone is at 1486 to 1477 provided by the short term 5 and 10-day MAs.

With the Budget 2011 to be tabled tomorrow, the overall market is expected to remain buoyant with rotational play continue to be the main theme. Overnight, the Dow rose +75.68 points or +0.69% higher to close at 11,096.08. Today, the FBM KLCI is likely to trade within a range of 1484 to 1505.

This week's expected range: 1445 – 1520
Today’s expected range: 1484 – 1505

Resistance: 1499, 1502, 1505
Support: 1484, 1487, 1491

FBM KLCI - a healthy profit-taking correction

Stocks on Bursa Malaysia ended lower yesterday in line with a weaker regional markets. The local market started the day in positive territory boosted by strong buying in plantation-related stocks following a surge in crude palm oil (CPO) prices on Monday. However, weaker performance in key regional markets led investors to trim their position. The FBM KLCI closed 0.84 of a point or 0.06% lower at 1486.57 after opening 2.88 points higher at 1490.29. Losers led gainers by 420 to 327 while 306 counters were unchanged. Volume rose to 1.17 billion shares worth RM1.90 billion from 1.09 billion shares valued at RM1.72 billion on Monday.

The FBM KLCI opened higher with an up gap of 2.88 points at 1490.20, and surged to the intra-day high which is also the current year high at 1493.29 within the first fifteen minutes. Thereafter, heavy profit-taking activities set in and sent the key index to its intra-day low of 1484.30, and the index was bouncing between the high and low till closing. Chart-wise, the key index formed a bearish dark-cloud-cover candlestick pattern which indicates active profit-taking activities at the current index level. As mentioned before, the 1490 to 1500 points level is a strong resistance zone which will attract heavy selling activities by the investors and is not easy to break through.

MACD turned downward slightly after climbing for the past five days, and is still below its signal-line, indicates the upward momentum is still weak. Hence, the key index may consolidate to move sideways. RSI (14) at 71.3 has hooked down, nonetheless, is still in the bullish zone, and Stochastic at 90.5 too has tuned downward from 93.7, reflecting the correction of the key index. Signals from the indicators are indicating weak momentum of the FBM KLCI and is short term overbought, hence, it is likely to further correct downward.

The underlying uptrend of the FBM KLCI is currently still intact as indicated by the short, medium and long term moving averages that are well separated. Immediate overhead resistance zone for the key index is now at 1490 to 1500 while its immediate downside support zone is at 1483 to 1474 provided by the short term 5 and 10-day moving average. Having said so, the undertone of the key index is still bullish for the time being, and any corrections should be viewed as an opportunity to collect quality shares at lower price level.

Overnight, the Dow rose +10.06 points or +0.09% higher to close at 11,020.40. Today, the FBM KLCI is likely to trade within a range of 1473 to 1502.

This week's expected range: 1445 – 1520
Today’s expected range: 1473 – 1502

Resistance: 1492, 1497, 1502
Support: 1473, 1479, 1482

FBM KLCI - remain bullish

Stocks on Bursa Malaysia ended broadly higher yesterday in line with the firmer regional markets on strong buying in selected heavyweights in the plantation and banking sectors. Speculation on the US Federal Reserve would inject fresh money into the US economy spurred buying interests in the regional markets. The benchmark FBM KLCI rose 6.0 points, or 0.41%, to close at 1487.41 after opening 4.73 points higher at 1486.14. Gainers outnumbered losers by 479 to 287 while 293 counters were unchanged. Volume rose to 1.09 billion shares valued at RM1.72 billion from 1.08 billion shares valued at RM1.66 billion last Friday.

The FBM KLCI opened with 4.73 points up gap at 1486.14 and surged to the intra-day high of 1490.10 within the first twenty minutes of the day. Profit-taking activities set in and sent the key index to the intra-day low of 1484.57. A last minute buying of selected heavyweights helped lift the key index to close off low at 1487.41. Chart-wise, the key index formed a spinning-top candlestick which indicates indecision of the market to move higher, however, the bull still have an upper hand.

Daily MACD continued to move higher, albeit still below its signal-line, indicates a gradual pick up in upward momentum, as shown by the increasing shorter histogram. RSI (14) at 72.3 has move into the short term overbought zone, indicates the key index is turning more bullish. Stochastic at 93.8 continued to move higher into the overbought zone, and is tapering off. Signals from the indicators are indicating a gradual pick up in the upward momentum, and may continue its rise towards the 1500 point level.

The underlying uptrend of the FBM KLCI as indicated by the short, medium and long term moving averages remained firmly intact. Immediate overhead resistance zone is at 1491 to 1500; with the 1500 point level being the key psychological resistance level to be watch out. Immediate short term support zone lies at 1471 to 1480 provided by the 5 and 10-day short term moving average.

The FBM KLCI is expected to remain buoyant before the announcement of the Budget 2011 this coming Friday, and the market will continue to be active with rotational play. Overnight, the Dow rose +3.86 points or +0.04% higher to close at 11,010.34. Today, the FBM KLCI is likely to trade within a range of 1479 to 1496.

This week's expected range: 1445 – 1520
Today’s expected range: 1479 – 1496

Resistance: 1490, 1493, 1496
Support: 1479, 1481, 1484

FBM KLCI - bullish uptrend

Stocks on Bursa Malaysia closed mixed last Friday on profit-taking amid lack of strong leads. However, buying interest in selected heavyweights managed to help the benchmark index stay above the 1,480-point level. The FBM KLCI loss a marginal 0.04 point to close last Friday at 1481.41, week-on-week, it was up 15.09 points or 1.03%, from 1466.32 the previous Friday. Weekly volume increased to 5.23 billion shares worth RM8.05 billion from 5.066 billion shares valued at RM7.61 billion the previous week.

The FBM KLCI opened last Monday with an up gap of 3.19 points higher at 1469.51 and surged to the intra-day high of 1474.90. However, selling pressure that emerged in the late afternoon pushed it to close at the low of the day at 1462.27. The key index rebounded on Tuesday to close 9.92 points higher at 1472.19 after consolidating below the 1470 level for more than a week. On Wednesday, the key index opened with a big up gap of 6.13 points and touched the intra-day high of 1483.25 before closing off high at 1479.61, registering a gain of 0.02 point above the recent high of 1479.56. The key index was trading in the negative zone for most part of last Thursday before late buying of selected heavyweights reversed the downtrend to close above the 1480-point barrier at 1481.59, and on Friday, the key index went into a consolidation mode and traded in a narrow range before closing almost unchanged with a marginal loss of 0.04 point at 1481.41.

On the weekly chart, the FBM KLCI formed a bullish white candlestick which indicates continuation of the uptrend. The key index is closing above the recent high of 1479.59 and continued to stay above the 5-week moving average. On the daily chart, the key index formed a Doji candlestick which indicates indecision and a pause to the up move.

Weekly MACD continued to move higher, but at a slower pace, as shown by the shorter histogram, indicates the medium term upward momentum is slowing down. Daily MACD turned downward slightly and is below its signal-line, nonetheless, its daily histogram continued to turn shorter, indicates a reduction in the daily downward momentum. The difference in the weekly and daily MACD signal indicates the medium to longer term upward momentum is intact while for the short term, it is slowing down.

Weekly RSI (14) at 77 continued to move higher, is in the very bullish or overbought zone. Daily RSI (14) at 70.6 is turning flat, and is at the borderline of the very bullish zone.

Weekly Stochastic at 92 has hooked up, but is still below its weekly slow Stochastic, and is in the overbought zone. Daily Stochastic at 92.5 continued to move higher into the overbought zone, nonetheless, it indicates the up cycle is still intact.

Signals from the indicators are indicating that medium to longer term momentum of the FBM KLCI is still strong, whereas, for the short term the mixed signal might indicates consolidation with an upward bias.

The underlying short, medium and longer term trend of the FBM KLCI remained a strong uptrend as the key index is staying above all the moving averages.

For the coming week, the focus will be on the Budget 2011 which will be tabled on the coming Friday, October 15. However, the effect could have been discounted as the key index has been moving up to the current level steadily for the past weeks. The key index is likely to challenge the higher target level of 1491 in the coming week en route to 1500 with rotational play on the key component stocks.

The Dow rose +57.90 points or +0.53% higher to close at 11,006.48 on last Friday. This week, the FBM KLCI may trade within a range of 1445 to 1520, and for today it is likely to trade within a range of 1473 to 1491.

This week's expected range: 1445 – 1520
Today’s expected range: 1473 – 1491

Resistance: 1484, 1487, 1491
Support: 1473, 1476, 1479

FBM KLCI - closing above 1480

Stocks on Bursa Malaysia ended mixed yesterday with the benchmark index closed marginally higher on last-minute buying in key heavyweights which pushed the benchmark index through the 1,480-point barrier. The FBM KLCI which slipped into the red after opening 1.98 points higher at 1481.59, recovered to close 1.84 points or 0.12% steadier at 1481.45. Market breadth was negative with losers leading gainers by 410 to 299 while 303 counters were unchanged. Turnover was lower with 841 million shares worth RM1.52 billion changed hands compared with Wednesday’s 954 million shares worth RM1.66 billion.

The FBM KLCI opened 1.98 points higher at 1481.59 and surged to touch the intra-day high of 1481.93 at the beginning of the day, and thereafter profit-taking activities set in to push the key index southward to hit the intra-day low of 1476.25. A last-minute buying of selected heavyweights help pushed the key to close above the resistance level of 1480 to close at 1481.59. Chart-wise, the price action of the key index formed a dragon-fly Doji candlestick which indicates the bear was initially in control but the bull fought back to take control of the key index. The key index is currently closing at the highest level of the year. It may continue its upward move to challenge higher level targets at 1491 and 1500, but will continue to face heavy profit-taking activities.

MACD continued to curve upward, albeit still below its trigger-line, and its histogram is getting shorter, indicates a gradual pick up in the upward momentum. RSI (14) at 70 is beginning to turn very bullish, nonetheless, has entered the short term overbought zone. Stochastic at 88.3 continued to move high, indicates the key index is gaining its upward strength. Signals from the indicators are indicating a continuation of the upward move and a gradual gain in momentum.

The underlying uptrend of the FBM KLCI remained intact, and as the key index is now closing above the 1480 level, it is poised to challenge the higher target levels of 1491 and 1500 in the near term. The market is expected to remain buoyant with the upcoming 2011 Budget to be unveiled next Friday.

Overnight, the Dow loss -19.07 points or -0.17% lower to close at 10,948.58. Today, the FBM KLCI is likely to trade within a range of 1472 to 1488.

This week's expected range: 1445 – 1491
Today’s expected range: 1472 – 1488

Resistance: 1483, 1485, 1488
Support: 1472, 1474, 1477

FBM KLCI - poise to challenge new high

Stocks on Bursa Malaysia ended higher yesterday with the benchmark index staying firmly above the 1470 level on continuous follow-through buying in heavyweights like Genting, Tenaga and Axiata. The market took cue from the hefty rise on Wall Street overnight and tracks the gains in regional bourses. The FBM KLCI rose 7.42 points or 0.50% to 1479.61, a new high for the year, after opening 6.13 points higher at 1478.32, it touched an intra-day higher of 1483.25. Gainers thumped losers by 443 to 330 while 283 counters were unchanged. Turnover was slightly lower at 954 million shares worth RM1.66 billion compared with Tuesday’s 985 million shares worth RM1.51 billion.

The FBM KLCI opened with a big up gap of 6.13 points and surged to the intra-day high of 1483.25 within the first five minutes, profit-taking activities immediately surfaced which capped further gains and pressed the key index downward. The key index was trading southward throughout the day with intermittent rebound to hit the intra-day low of 1476.05 under heavy profit-taking activities. However, last minutes buying of selected heavyweights help pushed the key index to close off low at 1479.61, registering a gain of 0.02 point above the recent high of 1479.56.

Chart-wise, the key formed a spinning-top candlestick, which indicates hesitation of the market to move up further. In fact, the price action of the key index actually indicates heavy-profit taking activities at current level which curb gains. The key index may continue its attempt to challenge the overhead resistance zone of 1480 to 1500, with immediate resistance level at 1483 and 1491.

MACD had started to curve up, indicating a change in the momentum from down to up. RSI (14) at 69.4 continued to climb upward and is moving towards the very bullish zone. Stochastic at 73.5 has move out of its consolidation range, and indicates the possible beginning of another up cycle of the FBM KLCI. Readings from the indicators are indicating that the FBM KLCI is again turning bullish and the possible beginning of another round of up cycle.

The FBM KLCI is now closing at the year high and is above its recent high of 1479.56, and is expected to continue its up move. The underlying uptrend remained intact and the market is in a bullish condition getting ready to challenge the 1500 psychological resistance level.

Overnight, the Dow rose +22.93 points or +0.21% higher to close at 10,967.65. Today, the FBM KLCI is likely to trade within a range of 1468 to 1491.

This week's expected range: 1445 – 1491
Today’s expected range: 1468 – 1491

Resistance: 1483, 1487, 1491
Support: 1468, 1472, 1476

FBM KLCI - ready to re-test recent resistance at 1479

Stocks on Bursa Malaysia ended yesterday higher with the benchmark index closing above the 1470 level. The FBM KLCI rebounded to close 9.92 points or 0.68% at 1472.19 after opening 5.75 points higher at 1468.02. Losers led gainers by 411 to 319 today while 290 counters were unchanged. Turnover was lower at 985 million shares valued at RM1.51 billion, compared with Monday’s 1.37 billion shares worth RM1.71 billion.

The FBM KLCI opened 5.75 points higher at 1468.02 and continued to trade in the positive territory throughout the day within a six points range. Continued buying of selected blue-chips helped pushed the key index to close near the high of the day. Chart-wise, the key index formed a bullish outside bar, which indicates the bull was in control of the day. After consolidating below the 1470 level for more than a week, the key index has finally stood above the 1470 level again, and is ready to re-test the recent high of 1479.59. If the key index is able to break through this tough resistance level, it is expected to challenge the next target level of 1491.

MACD continued to move lower, but is tapering off, as shown by the shorter histogram, indicating a slow down in the downward momentum. RSI (14) at 66.9 has hooked up, nonetheless, is still in the mildly bullish zone. Stochastic at 65 has rebounded and crossed above its slow stochastic, but still trapped in a sideways range as it has been see-sawing in the current level. Signals from the indicators are indicating a sideways or range-bound market with an upward bias.

With the rebound yesterday, the FBM KLCI has again stood above the short term 5 and 10-day moving averages (MA), and is expected to continue moving higher. The underlying medium to longer term uptrend remained intact. Immediate overhead resistance zone is at 1480 to 1500 while the downside support zone is at 1445 to 1456.

The overall market is expected to remain buoyant leading to the announcement of the Budget 2011 on 15 October. Rotational play on second and third liners will remain active. Overnight, the Dow rose +193.45 points or +1.80% higher to close at 10,944.72. Today, the FBM KLCI is likely to trade within a range of 1463 to 1481.

This week's expected range: 1445 – 1491
Today’s expected range: 1463 – 1481

Resistance: 1474, 1476, 1481
Support: 1463, 1465, 1468

Stock to watch: Handal, Homeriz, SDRED, IJMLand

FBM KLCI - reversal signal

Stocks on Bursa Malaysia ended mixed yesterday with the benchmark FBM KLCI slipped into the red, led by DiGi and British American Tobacco (BAT). The FBM KLCI fell 4.05 points or 0.28% to 1462.27 after opening 3.19 points higher at 1469.51. It moved between 1474.90 and 1462.27 throughout the trading session. Gainers led losers by 501 to 295 while 258 counters were unchanged. Turnover was higher with 1.369 billion shares worth RM1.71 billion transacted compared with 973 million shares worth RM1.47 billion last Friday.

The FBM KLCI opened with an up gap of 3.19 points higher at 1469.51 and surged to the intra-day high of 1474.90. It was hovering around 1472 to 1474 for a major part of the day before selling pressure that emerged in the late afternoon pushed it to close at the low of the day. The price action of the key index led to the formation of a black inverted hammer like candlestick with its body engulfing the previous day’s candle, which is a bearish reversal signal. The key index is now closing below the 5 and 10-day short term moving averages, together with the bearish candlestick signal, the key index is likely to continue its down move today. Immediate support for the key index is at 1456 and 1450.

MACD continued to slide lower extending its down move, indicating the downward momentum is picking up. RSI (14) at 62.2 has hooked downward and is at the mildly bullish zone with a downward bias. Stochastic at 61 has also turned downward crossing below its slow Stochastic. Signals from the indicators are indicating a high probability of continued correction and consolidation of the FBM KLCI.

The short term trend of the FBM KLCI is now sideways or range-bound with a downward bias while the medium to longer term trend remained up. Immediate support zone for the key index is at 1445 to 1456 with 1450 being an important psychological support, while immediate overhead resistance zone is at 1475 to 1480.

The FBM KLCI is expected to continue its range-bound consolidation today, while second and third liners will still be in rotational play. Overnight, the Dow fell -78.41 points or -0.72% lower to close at 10,751.27. Today, the FBM KLCI is likely to trade within a range of 1445 to 1480.

This week's expected range: 1445 – 1491
Today’s expected range: 1445 – 1480

Resistance: 1471, 1475, 1480
Support: 1445, 1453, 1458

FBM KLCI - range-bound with an upward bias

Stocks on Bursa Malaysia ended last Friday on a firmer note with the key index supported by strong institutional funds buying in selected heavyweights. The overall market traded within a tight range amid mild profit-taking in selected heavyweights and lower liners after recent gains. The benchmark FBM KLCI closed 2.82 points or 0.19% higher at 1466.32; week-on-week, it was up 15.13 points or 1.04% from the previous Friday’s close of 1451.19. Turnover was slightly lower at 5.066 billion shares, worth RM7.610 billion, from 5.958 billion shares, worth RM7.865 billion the previous week.

The FBM KLCI opened last Monday with an up gap of 7.54 points at 1458.73, taking cue from the hefty rise of 197 points on the DJIA the previous Friday, the key index moved higher on renewed bargain hunting interest to close 13.52 points higher at 1464.71. It corrected on Tuesday in line with the weaker performance of the regional markets to close 5.07 points or 0.35% lower at 1459.64. On Wednesday, the key index rebounded to close 2.14 points or 0.15% higher at 1461.78, as market sentiment was underpinned by the rally in the regional bourses. The key index continued its rebound on Thursday and Friday to close last week on a positive note at 1466.32

On the weekly chart, the FBM KLCI formed a bullish Harami candlestick which indicates a positive outlook for the key index. It is, however, trapped within the overhead resistance of 1480 and the downside support of 1445. A breakout from either one level will see it moving in the direction of the breakout. The short term 5-week moving average (MA) is now at 1451 and is expected to provide support to the key index. The underlying medium to longer term trend as indicated by the longer term MAs still remained in the up direction.

On the daily chart, the FBM KLCI formed four black candlesticks but rose gradually, indicated the strong underlying buying support despite selling pressure which tries to cap gains. After getting trapped between the 5 and 10-day MAs for three days, the key index has moved out of it on Friday, and is now staying above all the MAs, indicating the uptrend is unspoiled. Nonetheless, the key index is still range-bound with a upward bias.

Weekly MACD continued to move higher, but at a slower pace, as indicated by its shorter histogram formation which indicates a gradual loss of the medium term upward momentum. Daily MACD continued to slide lower, however, its daily histogram has begun to turn upward, indicating a slow down in the daily downward momentum.

Weekly RSI (14) at 75.6 has hooked up, the reading indicates that the medium term outlook for the key index is still bullish. Daily RSI (14) at 65.4 continued to climb higher, albeit in a slow pace, is still in the bullish zone.

Weekly Stochastic at 90.2 continued to slide lower and is below its slow Stochastic, indicates consolidation in the medium term perspective. Daily Stochastic at 65.6 has hooked up slightly, reflecting the consolidation mode of the key index.

Signals from the indicators indicated that the medium term perspective of the FBM KLCI is still bullish with a gradual slow down in upward momentum. For the short term, it is range-bound with an upward bias. Immediate overhead resistance zone is at 1480 to 1500 while the downside support zone is at 1440 to 1456.

For this week, the market is expected to remain buoyant, backed by improved market sentiment, as investors look forward to incentives from the government under the budget 2011. Rotational play is likely to prevail as the key heavyweights continue to consolidate.

The Dow rose +41.63 points or +0.39% higher to close at 10,829.68 on last Friday. This week, the FBM KLCI may trade within a range of 1445 to 1491, and for today it is likely to trade within a range of 1458 to 1478.

This week's expected range: 1445 – 1491
Today’s expected range: 1458 – 1478

Resistance: 1469, 1473, 1478
Support: 1458, 1461, 1463

Stock to watch: Gamuda, MAS, Tebrau, E&O

FBM KLCI - range-bound with a downward bias

Stocks on Bursa Malaysia ended mixed yesterday in range-bound trade with the benchmark index rising marginally, spurred by strong buying in finance counters led by MAYBANK and RHB Capital. The FBM KLCI rose by 1.72 points to close at 1463.50 after opening 4.06 points higher at 1465.84. Losers led gainers by 399 to 329 while 280 counters were unchanged. Volume rose to 1.052 billion shares worth RM1.718 billion compared with 905 million shares worth RM1.449 billion on Wednesday.

The FBM KLCI opened 4.06 points higher at 1465.84 and touched the intra-day high of briefly before profit-taking activities sent it to the intra-day low of 1461.20, and was hovering between the high and low for the rest of the day. Chart-wise, it formed a small black candlestick which indicates the selling activities were more dominant despite the key index ending higher. The key index is still basically moving in a range-bound or sideways direction in a narrow range with the overhead resistance zone at 1467 to 1480 and immediate support zone at 1440 to 1456.

MACD continued to slide lower, indicating the continuous loss of momentum. RSI (14) at 64.2 is basically flat, reflecting the sideways mode of the key index. Stochastic at 63.5 has hooked down despite the index climbing higher, indicating the downward move is not over yet.

The FBM KLCI is now bound on top by the 10-day moving average (MA) and below by the 5-day MA, and has gone into sideways consolidation for the immediate short term, a breakout in either direction will see the index continue to move in that direction. From the weak readings of the indicators, the key index has a stronger downward bias. Nonetheless, the underlying medium to longer term uptrend still remained intact.

The overall market is expected to continue its current trend of rotational play on the second and third liners while the heavyweights consolidate. Overnight, the Dow fell -47.23 points or -0.44% lower to close at 10,788.05. Today, the FBM KLCI is likely to trade within a range of 1456 to 1471.

This week's expected range: 1403 – 1514
Today’s expected range: 1456 – 1471

Resistance: 1466, 1469, 1471
Support: 1456, 1459, 1461