Millionaire Trend Trader: FBM KLCI - a good start of the pre-Lunar New Year Rally

Tuesday, January 4, 2011

FBM KLCI - a good start of the pre-Lunar New Year Rally

Stocks on Bursa Malaysia ended broadly higher yesterday, the first trading day of the New Year. The FBM KLCI gained 14.51 points or 0.96% to end at a historic high of 1533.42 backed by gains mainly in plantation and key heavyweight stocks. The benchmark index touched a new all-time intra-day high of 1535.02, after opening 5.62 points higher at 1524.53. Gainers thumped losers by 664 to 195 while 229 counters were unchanged. Total volume surged to 1.608 billion shares, worth RM2.09 billion, from last Thursday’s 1.119 billion shares valued at RM1.872 billion.

The FBM KLCI opened with an up gap of 5.62 points at 1524.53 and continued moving higher on strong buying momentum amid intermittent mild profit-taking activities. It touched an intra-day high of 1535.02 before retracing slightly to close off high. Chart-wise, the FBM KLCI formed a bullish white candlestick with short upper shadow which indicates the bulls were in control of the day. The key index is now in the uncharted territory, and is expected to continue its upward momentum to scale new high.

MACD continued to surge higher, as shown by the long histogram, indicates a pick up in the upward momentum. RSI (14) rebounded to 65.2, and is back to the bullish zone. Stochastic is at 86.4, and has continued to climb higher, indicating the continuation of the up cycle in the market strength. Readings from the indicators show a pick up in the market momentum, and the FBM KLCI is expected to move higher on the back of this upward momentum.

The short term trend of the FBM KLCI again turned upward, as shown by the wider distance of the short term moving averages. The medium and long term uptrend remained intact. Immediate overhead resistance zone is now at 1535 to 1550, while the downside support zone is at 1521 to 1500. With the strong pick up in trading volume, the overall market is expected to remain buoyant and mark the beginning of the pre-Lunar New Year rally.

Overnight, the Dow rose +93.24 or +0.81% higher to close at 11,670.75. Today, the FBM KLCI is likely to trade within a range of 1515 to 1546.

This week's expected range: 1488 – 1550
Today’s expected range: 1515 – 1546

Resistance: 1538, 1542, 1546
Support: 1515, 1519, 1526

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Tuesday, January 4, 2011

FBM KLCI - a good start of the pre-Lunar New Year Rally

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