Millionaire Trend Trader: FBM KLCI - marginally higher on lower volume

Wednesday, December 8, 2010

FBM KLCI - marginally higher on lower volume

Stocks on Bursa Malaysia closed mixed on Monday on mild buying interests in selected finance and plantation-related stocks which helped the benchmark index to stay in positive territory. The FBM KLCI rose by 0.76 point or 0.05% to close at 1501.74, after opening 4.68 points higher at 1505.66. Losers led gainers by 368 to 359 while 278 counters were unchanged. Total volume fell to 846 million shares valued at RM1.56 billion from 966 million shares valued at RM1.64 billion on last Friday. Bursa Malaysia was closed for public holiday yesterday.

The FBM KLCI opened with an up gap of 4.68 points but traded lower throughout the day; it touched the intra-day low of 1497.61 but rebounded to close off low on last minute buying in selected heavyweights. Chart-wise, the FBM KLCI formed a black hanging-man like candlestick which indicates sellers were dominant. The key index is now resting on the 20 and 30-day moving averages (MA) which has given the immediate support to the key index.

MACD is in the positive territory and continued to climb higher, albeit still below its signal-line, indicates a gradual gained in the upward momentum. RSI (14) at 53.6 has gently hooked up, and is still in the neutral zone. Stochastic at 75.7 has continued to climb higher, indicating the continuation of the short term up cycle. Readings from the indicators indicates the FBM KLCI is still generally weak in its momentum, and hence might continue to stay sideways.

The short term trend of the FBM KLCI is currently sideways, nonetheless, its medium to long term trend is still up. Immediate overhead resistance zone is at 1510 to 1532 while the downside support is at 1490 to 1474. With the volume shrinking to below 1 billion shares, the market is expected to remain slow and will be range-bound or sideways in the short term.

Overnight, the Dow fell a marginal -3.03 points or -0.03% lower to close at 11,359.16. Today the FBM KLCI is likely to trade within a range of 1489 to 1514.

This week's expected range: 1446 – 1532
Today’s expected range: 1489 – 1514

Resistance: 1506, 1510, 1514
Support: 1489, 1493, 1497

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Wednesday, December 8, 2010

FBM KLCI - marginally higher on lower volume

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