Millionaire Trend Trader: FBM KLCI - continued moving higher

Thursday, December 23, 2010

FBM KLCI - continued moving higher

Stocks on Bursa Malaysia closed higher yesterday on mild buying interest in selected heavyweights as investors reacted positively towards several active changes in the corporate scene. The FBM KLCI rose 9.87 points or 0.66% higher to close at 1515.05, after opening 0.69 of a point higher at 1505.87. Gainers led losers by 394 to 374, while 284 counters were unchanged. Total volume declined to 1.253 billion shares worth RM1.664 billion from Tuesday’s 1.361 billion shares valued at RM1.87 billion.

The FBM KLCI opened 0.69 point higher at 1505.87 and moved higher to the morning session high of 1513.39. The key index pullback to consolidate before a last minute buying on selected key heavyweights sent it to close at the day’s high of 1515.05. Chart-wise, the FBM KLCI formed a bullish Marubozu candlestick which indicates the bull was in control for the day. With this bullish close, the FBM KLCI is expected to continue moving higher to challenge the next higher resistance level at 1523.

MACD continued to move higher and made a golden-cross over its signal line, which is a buy signal, and indicates the short term momentum is turning positive. RSI (14) is at 57.8 and continued to move higher into the mildly bullish zone. Stochastic has hooked upward and made a cross over its slow stochastic line, indicating the end of the short term down cycle and possibly the beginning of another up cycle. Signals from the indicators indicated that the short term consolidation of the FBM KLCI is possibly over, and a new uptrend is in the making.

The FBM KLCI is now closing above all its short, medium and long term moving averages (MA), which is a bullish sign. However, its immediate short term 5-day MA is still below the 10-day MA, which indicates the short term trend, is still sideways, until the 5-day MA crosses above the 10-day MA. The medium and long term uptrend remained intact. Immediate overhead resistance zone lies at 1523 to 1532, while the immediate downside support is at 1500 to 1493.

Overnight, the Dow rose +26.33 points or +0.23% higher to close at 11,559.49. Today the FBM KLCI is likely to trade within a range of 1498 to 1525.

This week's expected range: 1469 – 1539
Today’s expected range: 1498 – 1525

Resistance: 1518, 1522, 1525
Support: 1498, 1501, 1508

Stocks to watch: MUHIBAH, KNM, SEG, MASTEEL, BPURI, PMETAL, MAA

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Thursday, December 23, 2010

FBM KLCI - continued moving higher

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