Millionaire Trend Trader: FBM KLCI - higher on strong buying momentum

Friday, December 10, 2010

FBM KLCI - higher on strong buying momentum

Stocks on Bursa Malaysia surged yesterday led by CIMB and Petronas Chemicals spurred by positive sentiment in regional markets as well as the country's manufacturing sales figures. The FBM KLCI gained 11.23 points or 0.74% to 1521.29 after opening 2.73 points better at 1512.79. Gainers led losers by 494 to 307 while 267 counters were unchanged. Total volume rose to 1.525 billion shares, valued at RM2.481 billion, from Wednesday’s 1.084 billion shares, valued at RM2.176 billion.

The FBM KLCI opened with an up gap of 2.73 points at 1512.79 and surged to the early high of 1515.85 within the first twenty minutes. Profit-taking activities surfaced and pressed the key index down to the intra-day low of 1511.01. However, strong buying interest which surfaced near noon continuously pushed the key index higher to close at the intra-day high of 1521.29. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates continuation of the reversal pattern formed on Wednesday. With the bullish move, the key index is expected to continue with its upward momentum to re-test the recent historical high of 1528.01 and 1531.99 soon.

MACD continued to move higher after making the golden-cross on Wednesday, indicating the change in the momentum to the positive side. RSI (14) moved higher to 63.5, and is back to the bullish zone. Stochastic at 90.6 also continued to surge higher into the short term overbought zone, which indicates the market strength is turning strong. Signals from the indicators indicate that the underlying short term momentum of the FBM KLCI is again turning bullish after the recent correction.

The FBM KLCI is now above all its moving averages which indicate the trend change from short term sideways consolidation to bullish uptrend. The medium and long term uptrend remained intact. Immediate overhead resistance zone is at 1528 to 1532 while the downside support zone is at 1510 to 1500. With the improving volume, the market is expected to remain buoyant.

Overnight, the Dow loss a marginal -2.42 points or -0.02% lower to close at 11,370.06. Today the FBM KLCI is likely to trade within a range of 1504 to 1532.

This week's expected range: 1446 – 1532
Today’s expected range: 1504 – 1532

Resistance: 1524, 1528, 1532
Support: 1504, 1507, 1514

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Friday, December 10, 2010

FBM KLCI - higher on strong buying momentum

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