Millionaire Trend Trader: FBM KLCI

Wednesday, December 29, 2010

FBM KLCI - a strong rebound

Stocks on Bursa Malaysia closed firmer yesterday as investors bought into selected index-linked counters, mostly banking and plantation. The FBM KLCI which opened 0.74 of a point lower at 1510.98, moved between 1509.55 and 1525.99 before ending 5.72 points or 0.38% higher at 1517.44. Advancers led decliners by 390 to 370 while 294 counters were unchanged. Turnover improved to 822 million shares worth RM1.22 billion from Monday’s 773 million shares valued at RM868 million.

The FBM KLCI opened 0.74 point lower at 1510.98 and touched the intra-day low of 1509.55 within the first five minutes, it rebounded strongly and rallied to the intra-day high of 1525.99, profit-taking activities which emerged after that pressed the key index lower for the rest of the day to settle at 1517.44. Chart-wise, the FBM KLCI formed a white candlestick with long upper shadow, which indicates the bull was initially very strong in pushing the index up, but the bear which emerged later pushed it lower. From the price action, it shows that the resistance zone at 1519 to 1532 remained a tough barrier to the up move.

MACD has turned upward, indicating a pick up in the upward momentum. RSI (14) has hooked up and is at 58.8, moving higher into the mildly bullish zone. Stochastic at 66.2 too has hooked upward and is now above its slow stochastic line. Readings from the indicators indicate an initial pickup in the FBM KLCI’s momentum, and is likely to continue its upward trend.

With the strong up move yesterday, the short term trend of the FBM KLCI has turned upward from sideways. However, the 1519 to 1532 remained a strong barrier zone to the up move. The medium to long term uptrend remained intact. Immediate downside support zone is at 1509 to 1500.

Overnight, the Dow rose +20.51 points or +0.18% higher to close at 11,575.54. Today, the FBM KLCI is likely to trade within a range of 1492 to 1542.

This week's expected range: 1471 – 1544
Today’s expected range: 1492 – 1542

Resistance: 1526, 1534, 1542
Support: 1492, 1501, 1509

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Wednesday, December 29, 2010

FBM KLCI - a strong rebound

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