Millionaire Trend Trader: FBM KLCI - charting another new historical close

Wednesday, January 5, 2011

FBM KLCI - charting another new historical close

Stocks on Bursa Malaysia closed broadly higher yesterday with the benchmark FBM KLCI breaching the psychological mark to end at a new high for the second consecutive day, fueled mainly by gains in plantation stocks. Positive vibes from most regional equities market, supported by overnight gains on Wall Street has also prompted the momentum in the local bourse. The FBM KLCI gained 18.47 points or 1.2% to end at 1551.89 in brisk trading. Advancers thumped decliners by 637 to 233 while 262 counters were unchanged. Total volume surged to 2.011 billion shares, worth RM2.88 billion, from Monday’s 1.608 billion shares valued at RM2.09 billion.

The FBM KLCI opened 1.15 points higher at 1534.57 and continued moving higher throughout the day with intermittent mild profit-taking activities. It closed at the highest point of the day at 1551.89. Chart-wise, the FBM KLCI formed a bullish Marubozu candlestick which indicates buyers were in control throughout the day. With this bullish move, the key index is expected to continue with its upward momentum to move higher. Nevertheless, a long white candlestick appearing at the high level could also indicate distribution, and a pull-back is expected soon.

MACD continued to surge higher, indicating a strong upward momentum. RSI (14) jump to 71.8 from 65.2 a day earlier, is moving into the very bullish zone, and is a little overbought for the short term, a pull-back may be expected soon. Stochastic is at 90.8, and continued to climb higher into the overbought zone, which indicates very strong market strength. Readings from the indicators indicate a very bullish condition of the FBM KLCI, nevertheless, it is a little overbought, and a pull-back is expected soon.

With the strong up move over the last two days, the FBM KLCI has resumed its short term uptrend, and the medium and long term uptrend remained intact. The FBM KLCI is now moving into an uncharted territory, and is technically very bullish. Any pull-back shall be viewed as an opportunity to accumulate quality shares at lower level.

Overnight, the Dow rose +20.43 or +0.18% higher to close at 11,691.18. Today, the FBM KLCI is likely to trade within a range of 1522 to 1569.

This week's expected range: 1488 – 1550
Today’s expected range: 1522 – 1569

Resistance: 1558, 1564, 1569
Support: 1522, 1528, 1540

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Wednesday, January 5, 2011

FBM KLCI - charting another new historical close

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