Stocks on Bursa Malaysia ended mixed on last Thursday, Dec 30 2010, the last trading day of year 2010, as last Friday was declared a public holiday by the Prime Minister to celebrate Malaysia's maiden victory in the Asean Football Federation (AFF) Suzuki Cup championship on Wednesday. The FBM KLCI rose 7.33 points to 1518.91 compared to the previous week's closing of 1511.58. Year-on-year, the benchmark index was up 246.13 points or 16.2% compared with 1272.78 recorded on Dec 31, 2009. The FBM KLCI charted an all time record highest close of 1528.01 and a record intra-day high of 1531.99 on Nov 10, 2010.
The FBM KLCI kicked off last Monday on a cautious note with the key index up 0.14 point at 1511.90, trading was slow, as many people were already on vacation and those still in the market were not taking any chance after China raised its interest rate by 25 basis points. On Tuesday, the key index shrugged off the cautious mood on Monday and added 5.72 points to 1517.44 after touching an intra-day high of 1525.99. The benchmark index continued to move higher on Wednesday, closing 6.9 points higher at 1524.34, as investors continued to pick up selected heavyweight stocks. The FBM KLCI gave back 5.43 points to 1518.91 after touching an intra-week high of 1529.95 amid profit-taking activities on Thursday, also the last trading day for the year.
On the weekly chart, the FBM KLCI formed a white inverted hammer candlestick which is a top reversal candlestick formation; it indicates buyers were initially strong in pushing the index higher but the sellers which emerged later push it back down. As it is a white candlestick, it is not so bearish, and may just indicates strong profit-taking activities ahead a long weekend. On the daily chart, the FBM KLCI, however, formed a bearish engulfing candlestick pattern, which indicates heavy selling pressure by the bears to lock-in profit before a long weekend. The key index was in the red on a day-on-day basis, but was still in the green on a weekly basis.
Weekly MACD continued to slide lower, indicating a continued loss in weekly momentum. Daily MACD, however, continued to move higher, but its histogram turned shorter, giving out a first sign of weakening in the daily upward momentum.
Weekly RSI (14) continued to climb higher into the bullish zone and is at 73.1. Daily RSI (14), however, has hooked down sharply from 62.5 to 58.1, reflecting the heavy profit-taking activity on the last trading day, and is back to the mildly bullish zone.
Weekly Stochastic turned upward and has just made a cross over its weekly slow stochastic line, indicating a probable beginning upward cycle in the weekly momentum of the FBM KLCI. Daily Stochastic has continued to climb higher, indicating the daily up cycle is still intact despite a weak close of the key index last Thursday.
Readings from the indicators indicate that the weekly technical of the FBM KLCI is still bullish despite in a consolidation mode, while the daily technical indicators readings indicate a consolidation mode with an upward bias.
The FBM KLCI is currently above all its short, medium and long term moving averages (MA), which indicates a bullish state of the benchmark index. Immediate overhead resistance zone is at 1519 to 1532, while the immediate downside support zone is at 1516 to 1500.
Stocks on Bursa Malaysia are likely to show good momentum this week as most investors return from their year end holiday with a "feel good factors" towards the New Year. Last Friday, the Dow closed +7.80 or +0.07% higher to end year 2010 at 11,577.51. This week, the FBM KLCI may trade within a range of 1488 to 1550, and for today it is likely to trade within a range of 1503 to 1541.
This week's expected range: 1488 – 1550
Today’s expected range: 1503 – 1541
Resistance: 1526, 1533, 1541
Support: 1503, 1511, 1515
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