Millionaire Trend Trader: FBM KLCI

Tuesday, November 9, 2010

FBM KLCI - New record high!

Stocks on Bursa Malaysia ended firmer yesterday amid buoyant sentiment for plantation stocks amid a rally in crude palm oil price but profit taking capped further gains. The FBM KLCI gained 8.1 points or 0.54% to close at 1519.84 after opening 5.27 points higher at 1517.01, it had touched an intra-day high of 1522.77, up by 11.03 points. Advancers outnumbered decliners by 592 to 289 while 253 counters were unchanged. Turnover increased to 1.520 billion shares worth RM2.252 billion from last Thursday’s 1.278 billion shares worth RM1.61 billion.

The FBM KLCI opened with an up gap of 5.27 points at 1517.01 and surged to the intra-day high of 1522.77 in the morning. Profit-taking activities set in and pushed the key index to the intra-day low of 1517.01 before last minute buying of selected key heavyweights lift the benchmark index to close at 1519.84, a new record close for the FBM KLCI. Chart-wise, the FBM KLCI formed a possible shooting-star candlestick which indicates heavy selling pressure encountered by the key index. With the bullish sentiments remained intact, the key index is expected to test the record high of 1524.69 anytime this week.

MACD moved higher and made a golden-cross, which is a strong buy signal. The golden-cross also indicates a resumption of the upward momentum. RSI (14) climb higher into the overbought zone, a reading of 76.3 indicates the key index is very bullish. Stochastic is at 93 and has hooked up, indicates very strong underlying market strength. Readings from the indicators signalled a very bullish state of the FBM KLCI, and it is expected to continue its bullish up move in the near term.

The underlying uptrend of the FBM KLCI remained very strong. Immediate strong resistance is expected at the 1524 level, while the immediate downside support zone is at 1500 to 1516. If the key index is able to breach the 1524-point level successfully, it is expected to test the next target level of 1550.

Overnight, the Dow fell -37.24 points or -0.33% lower to close at 11,406.84. Today, the FBM KLCI is likely to trade within a range of 1511 to 1529.

This week's expected range: 1492 – 1527
Today’s expected range: 1511 – 1529

Resistance: 1523, 1526, 1529
Support: 1511, 1514, 1517

Stocks to watch: CEPAT, DAYA, GHLSYS, GUNUNG, IJMPLNT, MASTEEL, TDM

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Tuesday, November 9, 2010

FBM KLCI - New record high!

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