FBM KLCI - likely to further consolidate

Stocks on Bursa Malaysia ended mixed last Friday with finance and plantation stocks leading the decliners, as the market remained concerned about the unrest in Middle East despite the release of upbeat earnings on Thursday. The FBM KLCI which made a solid move upwards earlier in the morning retreated to close 0.6 point or 0.04% lower at 1,489.27. Week-on-week, the key index declined by 28.29 points from 1,517.56 the previous week. Advancers led decliners by 524 to 300 while 256 counters were unchanged. Volume decreased to 1.38 billion shares worth RM1.79 billion from Thursday's 2.003 billion shares worth RM2.62 billion. The total weekly volume increased to 8.584 billion shares worth RM10.397 billion from 7.092 billion shares worth RM7.638 billion the previous week.

The FBM KLCI went through a volatile week last week, touching the intra-week high of 1,527.09 on Monday, but retreated strongly on heavy selling pressure for most of the week to close the week at the intra-week low of 1,489.27. On the weekly chart, the FBM KLCI formed a bearish engulfing candlestick pattern which reflects the heavy selling pressure experienced by the benchmark index last week. With this bearish formation, the FBM KLCI is likely to further consolidate or correct downward. Immediate support provided by the 30-week moving average (MA) is at 1,484.

On the daily chart, the FBM KLCI formed an inverted hammer-like black candlestick; however, as the upper shadow is relative short compared to its body, it shows that the index was still experiencing selling pressure on last Friday. The key index has now closed below the long term 120-day MA, and this indicates that the key index has started to turn bearish on the longer term perspective. In the near term, the key index will need to reverse to stay above the 1,500 level in order for it to remain its long term uptrend; otherwise, it may continue to slide lower.

Weekly MACD continued to slide lower, indicating a continuous loss in weekly momentum. Daily MACD also slide lower into the negative zone, indicating a pick up in the downward momentum. Weekly RSI (14) is at 51.1and has continued to plunge lower towards the neutral zone. Daily RSI (14) is at 35.5, and remained in the bearish zone. Weekly Stochastic had continued to plunge lower to 25.6, while daily Stochastic is at 12.6 and has fell into the short term oversold zone. Readings from the indicators, both weekly and daily, indicates that the FBM KLCI is very weak at the moment, and this weakness may continue in the near term until some solid reversal comes in.

With the FBM KLCI closing below the 120-day MA, the key index has technically turned bearish for the long term. Together with the occurrence of two lower highs and three lower lows, the trend is currently down. In order to reverse this downtrend, the FBM KLCI will need to close above the pivot high of 1,527 in the near term. Immediate overhead resistance zone is at 1,500 to 1,527, while the immediate downside support zone is at 1,484 to 1,474. The 1,474 support level is especially critical, if this level is breached, then the key index might slide lower to the 1,450 and 1,430 levels, fulfilling the target of the head-and-shoulder chart pattern.

Last Friday, the Dow rose +61.95 points or +0.51% to close at 12,130.45. This week, the FBM KLCI is expected to continue with its consolidation, and may trade within a range of 1,438 to 1,540, and for today it is likely to trade within a range of 1475 to 1510.

This week's expected range: 1438 – 1540
Today’s expected range: 1475 – 1510

Resistance: 1496, 1503, 1510
Support: 1475, 1482, 1485

FBM KLCI - very bearish on heavy sell down

Stocks on Bursa Malaysia ended lower across the board yesterday tracking a negative Wall Street as well as news of local inflation pressure. The bearish sentiment was driven primarily by negative external developments especially the light crude oil price due to escalating geopolitical tension in the Middle East. The FBM KLCI slipped further by 21.24 points or 1.41% to end at 1,489.87, after opening in red at 1,506.66. Losers beat gainers by 863 to 116 while 155 were unchanged. Volume rose to 2.003 billion shares worth RM2.623 billion from 1.695 billion shares worth RM2.046 billion on Wednesday.

The FBM KLCI opened 4.45 points lower at 1,506.66 but rebounded to the intra-day high of 1,511.39 at mid morning, and was marginally lower at noon. Heavy selling pressure which surfaced in the afternoon pushed the key index lower, breaking the psychological support level of 1,500 to close at the day’s low of 1,489.87. Chart-wise, the FBM KLCI formed a long black candlestick which indicates sellers were dominant throughout the day in pushing share prices lower. The key index has now broken its immediate critical support levels at 1,500 and 1,490, and is expected to slide lower to test the next critical lower support zone at 1,480 to 1,474. If the support at 1,474 could not hold, the key index is likely to slip down to the 1,450 level.

MACD continued to slide lower, indicating an increased in the downward momentum. RSI (14) slid lower to 35.7, has moved into the very bearish zone. Stochastic also slid lower to 27, indicating a pick up in the downward momentum and continuation of the down cycle. Readings from the indicators showed a very bearish condition of the FBM KLCI, and this is likely to continue for a while.

Now that the FBM KLCI has closed below the long term 120-day moving average (MA), technically, the key index is considered to have started to turn bearish for the long term. In the near term, if the key index is not able to rebound and close above the 120-day MA which is currently at 1,500, it is likely to slide lower to find its support from the 200 and 240-day MA currently at 1,431 and 1,413.

Overnight, the Dow fell -37.28 points or -0.31% to close at 12,068.50. Today, the FBM KLCI is likely to trade within a range of 1461 to 1505.

This week's expected range: 1474 – 1550
Today’s expected range: 1461 – 1505

Resistance: 1495, 1500, 1505
Support: 1461, 1475, 1482

FBM KLCI - close mixed on bargain hunting

Stocks on Bursa Malaysia which started the early session lower bounced back to close on a mixed note yesterday on bargain hunting. Pleasant surprises in earnings reports by blue-chip companies overshadowed the bearish Wall Street overnight and anxiety over the political unrest in the Middle East. The FBM KLCI ended 2.52 points or 0.17% lower at 1,511.11 after opening 9.37 points lower at 1,504.26. Gainers outpaced losers by 433 to 386, while 274 counters were unchanged. Volume increased to 1.695 billion shares worth RM2.046 billion from 1.655 billion shares worth RM1.875 billion on Tuesday.

The FBM KLCI opened with a big down gap of 9.37 points at 1,504.26 and traded lower to the intra-day low of 1,502.01 within the first ten minutes. The key index rebounded on bargain-hunting of blue-chip counters which gradually pushed the key index to the intra-day high of 1,516.52 before late profit-taking activities pressed it to close off high at 1,511.11. Chart-wise, the FBM KLCI formed a white candlestick in possible star position, which reflects the bargain-hunting activities by investors on quality blue-chip stocks. The key index has again closed below the neckline of the head-and-shoulder pattern, and is technically weak.

MACD has curved slightly downward and is still below its signal line, as well as below the zero-line, indicating a bearish condition. RSI (14) slid lower to 43.3 and is in the mildly bearish zone. Stochastic at 49 has hooked downward and has come below the 50 level, indicating a pull back of the recent rebound. Readings from the indicators indicated a short term bearish outlook for the FBM KLCI which will continue until clear signs of reversal is observed.

The short term trend of the FBM KLCI is down, and the medium term trend has turned sideways, while the long term uptrend remained intact. Immediate overhead resistance is at 1,515, the neckline level, while the downside support zone is at 1500 to 1490. The 120-day moving average is currently at 1,499, and will be a critical support level.

Overnight, the Dow fell -107.01 points or -0.88% to close at 12,105.78. Today, the FBM KLCI is likely to trade within a range of 1488 to 1525.

This week's expected range: 1474 – 1550
Today’s expected range: 1488 – 1525

Resistance: 1516, 1521, 1525
Support: 1488, 1495, 1503

FBM KLCI - turning bearish

Stocks on Bursa Malaysia closed lower across the board yesterday after a wave of selling as political unrest in the Middle East and North Africa continued to weigh down investor mood. The turmoil in the Middle East sent oil prices soaring with Brent crude rising as much as 2.7% to US$108.1 per barrel earlier yesterday because of fears of supply disruptions. The FBM KLCI dropped 12.22 points or 0.80% to 1,513.63. Decliners thumped advancers by 915 to 83 while 151 were unchanged. Volume decreased to 1.655 billion shares worth RM1.875 billion from Monday’s 1.842 billion shares worth RM2.064 billion.

The FBM KLCI opened with a down gap of 7.08 points at 1,518.77 and traded lower to hit the intra-day low of 1,510.18 at late morning. Bargain-hunting activities on selected blue-chips helped lift the key index to close off low at 1,513.63. Chart-wise, the FBM KLCI formed a black hammer-like candlestick with short lower shadow, which indicates sellers were dominant, and the big down gap indicated that the market was sold down on fear. The FBM KLCI is now closing right below the neckline of the head-and-shoulder pattern, and hence may continue to slide lower with the help of fear factor.

MACD has turned flat, indicating the upward momentum was taking a pause after rising for a few days. RSI (14) is at 44.4, and has again hooked downward, reflecting the pulled back of the key index to the mildly bearish zone. Stochastic, however, continued to climb higher to 53, but is tapering off, which indicates a slow down in the short term up cycle. Readings from the indicators showed that the FBM KLCI is still weak and have not shrugged off the short term bearishness.

The short term trend of the FBM KLCI remained range-bound but now with a downward bias. The medium term trend has turned sideways, while the long term uptrend remained intact. Immediate overhead resistance zone is at 1528 to 1545, while the downside support zone is at 1500 to 1490.

Overnight, the Dow fell -178.46 points or -1.44% to close at 12,212.79. Today, the FBM KLCI is likely to trade within a range of 1496 to 1528.

This week's expected range: 1474 – 1550
Today’s expected range: 1496 – 1528

Resistance: 1518, 1523, 1528
Support: 1496, 1505, 1509

FBM KLCI - momentum gradually picking up

Stocks on Bursa Malaysia ended broadly lower yesterday, while blue-chips, led by MAYBANK, which announced strong half-year results, helped the FBM KLCI jumped 0.55 percent at the close. The FBM KLCI rose by 8.29 points to close at 1,525.19 despite China's decision to tighten its monetary policy had weighed heavily on the market for most of the day. Decliners outnumbered advancers by 639 to 259 while 238 were unchanged. Turnover increased to 1.841 billion shares worth RM2.063 billion from 1.498 billion shares worth RM1.983 billion on last Friday.

The FBM KLCI opened 1.57 points higher at 1,519.13 and climb higher to the morning session high of 1523.90 within the first fifteen minutes. Selling pressure on blue-chips which surfaced suddenly sent the key index to the intra-day low of 1505.54 in early morning trade, losing 12.02 points at its worst. The key index gradually recovered lost ground to hit the intra-day high of 1527.09 after MAYBANK announced its strong results at mid-day. Chart-wise, the FBM KLCI formed a white hangman-like candlestick which indicates sellers were initially strong but buyers later fight back to push the key index higher. The FBM KLCI has now closed above the neckline of the head-and-shoulder pattern but still need to clear the resistance zone at 1528 to 1545 to reverse the short term down trend.

MACD continues to move higher albeit still below the zero-line, with its histogram also getting shorter indicates the short term momentum is gradually turning upward. RSI (14) continued to climb higher to 49.9, indicates the key index has moved back to the neutral zone after visiting the very bearish zone. Stochastic also continued to climb higher to 49.7, indicating a continuation of the up cycle and a gradual pick up in market strength. Signals from the indicators show that the FBM KLCI is gradually moving out of its short term bearish mode.

The short term trend of the FBM KLCI is still range-bound but with an upward bias. The medium term trend has turned sideways, while the long term uptrend remained intact. Immediate overhead resistance zone is at 1528 to 1545, while the downside support zone is at 1505 to 1490.

US market was closed yesterday for President’s Day holiday. Today, the FBM KLCI is likely to trade within a range of 1490 to 1549.

This week's expected range: 1474 – 1550
Today’s expected range: 1490 – 1549

Resistance: 1534, 1541, 1549
Support: 1490, 1497, 1511

FBM KLCI - range bound with an upward bias

Stocks on Bursa Malaysia ended firmer last Friday boosted by strong gains in most index-linked counters coupled with encouraging Gross Domestic Product (GDP) growth figures reported for 2010, overnight gains on Wall Street as well as stronger regional bourses. The benchmark FBM KLCI ended 9 points or 0.60% higher at 1,517.56 after opening 0.43 of a point better in the morning. On a weekly basis, the FBM KLCI gained 23.04 points, or 1.5%, from the previous week’s close of 1,494.52. Volume for the week decreased to 7.09 billion shares worth RM7.637 billion from 12.51 billion shares worth RM13.55 billion during the holiday-shortened week last week.

The FBM KLCI opened the week higher at 1,497.89 with a rebound and gradually moved higher for the week to touch the intra-week high of 1,521.15 before settling off high at 1,517.56. On the weekly chart, The FBM KLCI formed a bullish Harami candlestick, which is a bottom reversal candlestick pattern, and the key index is likely to continue with its upward momentum to move higher this week. However, the 10-week moving average (MA) at 1528 will post as a strong resistance to the up move, and the key index will need to climb above the previous week’s high of 1544.35 in order to reverse the downtrend.

On the daily chart, The FBM KLCI formed a bullish white candlestick which has successfully close above the neckline of the head-and-shoulder pattern. The key index might continue to move higher, but the overhead resistance to the up move is expected to be strong at the gap area of 1527 to 1533, and at 1541 posted by the 30-day MA.

Weekly MACD continued to slide lower, indicating the weekly momentum is still weak. Daily MACD, however, has curved upward, albeit still below the zero-line, coupled with shorter histogram, indicates that the daily momentum had started to pick up.

Weekly RSI (14) has hooked up, reflecting the technical rebound last week. Its weekly reading of 57.7 showed that the weekly strength of the key index is in the mildly bullish zone. Daily RSI (14) at 45.6 has continued to move upward from the low of 32.6 registered on February 11. It has moved out from the very bearish zone to the mildly bearish zone.

Weekly Stochastic is at 39.4, has continued to slide lower but is tapering off, indicating a slow down in the downward strength. Daily Stochastic, however, has crossed above its slow stochastic line and climb higher to 36.2 from the reading of 8.6 registered on February 14, indicating the FBM KLCI has move out from the oversold zone, and a short term up cycle has just started.

Technically, the FBM KLCI is just making a technical rebound at the moment, and readings from the indicators showed that the key index is still relatively weak in terms of its momentum, and the rebound could be short-lived. On the other hand, if the FBM KLCI is able to break above it recent pivot high of 1544.35, then the short term downtrend would be reversed.

Last Friday, the Dow rose +73.11 points or +0.59% to close at 12,391.25. This week, the FBM KLCI is expected to be range-bound with an upward bias, and may trade within a range of 1474 to 1550, and for today it is likely to trade within a range of 1497 to 1534.

This week's expected range: 1474 – 1550
Today’s expected range: 1497 – 1534

Resistance: 1523, 1529, 1534
Support: 1497, 1503, 1510

FBM KLCI - higher but lack of momentum

Stocks on Bursa Malaysia ended mixed yesterday on light foreign selling pressure. Mild selling from foreign funds was seen in the afternoon. The key index, however, remained in positive territory helped by gains in selected finance counters such as MAYBANK and CIMB. The FBM KLCI rose by 2.26 points or 0.15% to 1,508.56 in cautious trading after opening 2.23 points higher at 1,508.53. Decliners led advancers by 536 to 292 while 282 were unchanged. Volume fell to 1.738 billion shares worth RM1.760 billion from 1.878 billion shares worth RM2.029 billion on Wednesday.

The FBM KLCI opened 2.23 points higher at 1,508.53 and climb to the intra-day high of 1,512.85 before lunch break. The key index stated to slip lower in the afternoon session when foreign funds came in, and pulled back to close at 1508.56. Chart-wise, the FBM KLCI formed a Doji candlestick which indicates indecision and hesitation of the key index to move higher. The neckline of the head-and-shoulder chart pattern continued to post as a resistance to the key index’s up move. Immediate overhead resistance zone is at 1513 to 1544, while the downside support zone is at 1490 to 1474.

MACD continued to slide lower, but is tapering off, while the histogram is turning shorter, indicating a slow down in the downward momentum. RSI (14) was higher at 40.6, but is still in the bearish zone. Stochastic at 26.5 had crossed above its slow stochastic line to climb higher, indicating a possible short term up move is in the brewing. Signals from the indicators show that the downward momentum had slowed down and the FBM KLCI is in a consolidation mode.

The short term trend of the FBM KLCI remained down, nonetheless, a first sign of possible reversal was seen with the key index closing above the very short term 5-day MA. The medium term trend has turned sideways, while the long term uptrend still remained intact. The FBM KLCI is likely to continue with its consolidation in the near term.

Overnight, the Dow rose +29.97 points or +0.24% to close at 12,318.14. Today, the FBM KLCI is likely to trade within a range of 1499 to 1520.

This week's expected range: 1450 – 1530
Today’s expected range: 1499 – 1520

Resistance: 1513, 1516, 1520
Support: 1499, 1502, 1505

FBM KLCI - taking a breather

Stocks on Bursa Malaysia ended mixed yesterday with the key index gaining marginally to close above the psychologically crucial 1,500-point level. The market was consolidating around the 1,500-point level during the session, but saw a last-minute rebound with healthy participation from local institutions. The FBM KLCI added 0.97 point or 0.064% to 1,506.30, after opening 8.82 points lower at 1,496.51. Market breadth was negative with decliners led advancers by 493 to 342 while 259 were unchanged. Volume dwindled to 1.878 billion shares worth RM2.029 billion from Monday's 1.978 billion shares worth RM1.866 billion.

The FBM KLCI opened 8.82 points lower at 1,496.51 and fell to the intra-day low of 1,495.43 within the first fifteen minute. It then rebounded and moved upward gradually for the rest of the day to end at the highest point of the day. Chart-wise, the FBM KLCI formed a bullish Marubozu like candlestick which indicates the bulls were in control for the day. With no new low, the key index had probably found its temporary bottom at the 1,490 support level, and is now taking a breather at the 1,500 level. However, in order to reverse the downtrend, the key index must at least close above the neckline which is currently at 1,513 and the 10-day moving average at 1,519.

MACD continued to slide lower but at a slower pace, as shown by its shorter histogram, indicating a slow down in the downward momentum. RSI (14) was marginally higher at 39.3, and is still in the short term bearish zone. Stochastic is at 16.7, and has hooked up from its low at 8.6 but is still below its slow stochastic line, reflecting a weak rebound of the FBM KLCI. Signals from the indicators indicate that the FBM KLCI is currently still weak, and the downward move has slowed down and might make an upturn soon.

The short term trend of the FBM KLCI is still down, and the medium term trend has turned sideways, while the long term trend remained up. Immediate overhead resistance zone is at 1513 to 1519, while the downside support zone is at 1490 to 1474. The FBM KLCI may continue its consolidation, while the penny stocks may continue to remain active judging from the volume over the last two trading sessions.

Overnight, the Dow rose +61.53 points or +0.50% to close at 12,288.17. Today, the FBM KLCI is likely to trade within a range of 1488 to 1518.

This week's expected range: 1450 – 1530
Today’s expected range: 1588 – 1518

Resistance: 1510, 1514, 1518
Support: 1488, 1491, 1499

Stocks to watch: FITTERS, HEVEA, ASB, EKOWOOD, DIGISTA

FBM KLCI - a technical rebound

Stocks on Bursa Malaysia ended Monday on a firmer note with sentiment supported by local funds as well gains in key regional markets. The benchmark FBM KLCI rose 10.81 points or 0.72% to 1,505.33, pushed by gains mostly in TENAGA and CIMB, after opening 3.37 points higher at 1,497.89. Gainers outpaced losers by 546 to 268, while 285 counters were flat. Turnover was higher at 1.978 billion shares worth RM1.866 billion from last Friday’s 1.679 billion shares worth RM2.410 billion. Bursa Malaysia was closed for Prophet Muhammad’s birthday yesterday.

The FBM KLCI opened 3.37 points higher at 1,497.89 and gradually climbed to the intra-day high of 1,513.29, before profit-taking activities that surfaced in mid afternoon pressed the key index to close off-high at 1,505.33. Chart-wise, the FBM KLCI formed a bullish Harami candlestick, which indicates counter-attack by the bulls after three consecutive days of sell down by the bears. As mentioned in Monday’s analysis, the neckline of the head-and-shoulder pattern at 1,512 had post as a resistance to the up move of the key index. The key index will have to close above this neckline in order to reverse the downtrend. The FBM KLCI has rebounded off the long term 120-day moving average, which is currently at 1,492, and this is an important level to watch. If the key index breaks below this level, it is likely to slide lower to test the next lower support at 1,474.

MACD continued to slide lower; however, the histogram is shorter, indicating the downward momentum is slowing down slightly. RSI (14) made a hooked up to 38.8, is still in the bearish zone. Stochastic is at 8.6, and has continued to slide lower into the short term oversold zone, indicating very weak market strength. Readings from the indicators shows that the FBM KLCI is still in a bearish condition, and is likely to continue its consolidation.

The short term trend of the FBM KLCI remained down, while the medium term trend has turned sideways. Nevertheless, the long term uptrend still remained intact. Overnight, the Dow fell -41.55 points or -0.34% to close at 12,226.64. Today, the FBM KLCI is likely to trade within a range of 1476 to 1533.

This week's expected range: 1450 – 1530
Today’s expected range: 1576 – 1533

Resistance: 1515, 1524, 1533
Support: 1476, 1485, 1495

FBM KLCI - to further consolidate

Stocks on Bursa Malaysia ended the first week of the Golden Rabbit Year on negative note after started the week positively. The FBM KLCI lost 9.47 points or 0.63% to close last Friday at 1,494. 52. On a weekly basis, the FBM KLCI declined 37.3 points to 1,494.52 from 1,531.82. Total weekly volume increased to 12.51 billion shares worth RM13.55 billion from the previous week’s 2.95 billion shares valued at RM3.78 billion recorded during the holiday-shortened week.

The FBM KLCI made a positive start on last Monday after the Chinese New Year holiday, led by gains in plantation-related counters amid strong crude palm oil prices to close 3.78 points higher at 1,535.60 after opening 7.42 points higher at 1,539.24. Total volume surged to 3.24 billion shares. The key index continued to rise on Tuesday, registering a gain of 3.95 points to 1,539.55, after opening 6.74 points higher at 1,542.34, and total volume declined to 3.18 billion shares. However, it retreated into negative territory on Wednesday, losing 3.48 points to 1,536.07 after opening 2.08 points higher at 1,541.63, with losses in blue-chips as sentiment turned cautious amid news of China's latest rate hike. On Thursday, the FBM KLCI lost 30.08 points to 1,503.99 in line with declines in regional Asian markets. The key index continued its decline to close near the lowest point on Friday.

On the weekly chart, the FBM KLCI formed a bearish engulfing candlestick pattern which indicates sellers were dominant throughout the week in pushing the key index lower, and this is in line with the foreign funds sell down on banking and plantation stocks. With the occurrence of this bearish pattern, the FBM KLCI is expected to slide further southward. The next lower target level is expected at 1,474, provided by the 30-week moving average (MA), which coincides with the pivot low formed on November 29, 2010. If the support at 1,474 couldn’t hold, then the key index is likely to visit the psychological support level at 1,450.

On the daily chart, the FBM KLCI had already breached the neckline of the head-and-shoulder (H&S) pattern, which is a longer term top reversal chart pattern. The break of the H&S neckline would give the key index a downside target of 1427, which is also where the 200-day MA is now. On the other hand, in order for the key index to reverse the downtrend, it must at least close above the neckline which is currently at 1512.

Weekly MACD had continued to slide lower, indicating a continuous loss in weekly momentum, and nonetheless, the weekly MACD is still above the zero-line. Daily MACD had also continued to slide lower, and is below its zero-line, indicating a pick up in the bearish momentum. Weekly RSI (14) dropped rapidly to 53 from 63.6 the previous week, and has moved into the neutral zone. Daily RSI (14) is at 32.6, and continued to slide lower into the very bearish zone. Weekly Stochastic had continued to slide lower, and is at 40.8; while the daily Stochastic is at 15.7, and had slid lower into the short term oversold zone. Both weekly and daily indicators’ readings indicate that the FBM KLCI is bearish in the short term and the bearishness may continue for a while. Hence, the FBM KLCI may continue to consolidate this week.

The FBM KLCI is currently closing below its short and medium term moving averages, and hence, the short to medium term trend has turned down. However, the long term uptrend is still intact, but may be challenged soon. From a bigger picture, the FBM KLCI is undergoing a healthy correction, as there was no major correction since the bull-run started in April, 2009. A 23.6% correction on the Fibonacci retracement taking from the pivot low on March 12, 2009 to the pivot high formed on January 16, 2011 would bring the FBM KLCI to 1402 level.

Last Friday, the Dow rose +43.97 points or +0.36% to close at 12,273.26. This week, the FBM KLCI may trade within a range of 1450 to 1530, and for today it is likely to trade within a range of 1470 to 1515.

This week's expected range: 1450 – 1530
Today’s expected range: 1570 – 1515

Resistance: 1500, 1505, 1515
Support: 1470, 1480, 1487

FBM KLCI - bearish outlook

Stocks on Bursa Malaysia closed sharply lower yesterday on extended losses in finance counters and blue-chips. Declines on regional Asian markets on news of China’s latest rate hike, and the still fragile economic outlook in the United States have kept investors on the sidelines. The FBM KLCI lost 30.08 points or 2.09% to 1,503.99, its lowest level, since Dec 21st last year. Losers beat gainers by 752 to 158 while 223 counters were unchanged. Total volume increased to 2.22 billion shares worth RM3.13 billion from 2.196 billion shares worth RM2.66 billion on Wednesday.

The FBM KLCI opened with a down gap of 11.68 points at 1,524.39 and plunged to the morning session’s low of 1,517.77, and the key index rebounded gradually but lack momentum. Heavy selling pressures that appeared in mid afternoon pushed the key index to close at the lowest point of the day. Chart-wise, the FBM KLCI formed a bearish long black candlestick which indicates sellers were dominant throughout the day, and the large down gap also indicates investors were selling-out on fear factor. The key index has now closed below the recent low or support of 1,505.36, and hence is likely to slide lower to test the psychological support at 1,500 and the next lower supports at 1,493 and 1,474.

MACD has hooked downward abruptly, indicating a sudden increase in the downward momentum. RSI (14) plunged to a new low of 35.5, and this indicates the key index has turned very bearish. Stochastic has turned downward, crossing below its slow stochastic line, signaling an end to the recent rebound and a continuation of the down cycle. Signals from the indicators indicate that the FBM KLCI has turned bearish for the short term, and this bearishness is likely to continue for a while.

The FBM KLCI has turned downtrend in the short term, and now that the key index has closed below the 60 and 100-day moving averages, the medium term outlook is also turning bearish. The long term uptrend, however, is still intact. With the down move yesterday, the FBM KLCI has already formed the Head-and-Shoulder chart pattern, and this is a long term bearish pattern. The break of the neckline yesterday gives a possible downside target of 1,427 for the FBM KLCI in the longer term. Immediate downside support at 1,493 and 1,474 are critical levels to watch.

Overnight, the Dow fell -10.60 points or -0.09% to close at 12,229.29. Today, the FBM KLCI is likely to trade within a range of 1472 to 1550.

This week's expected range: 1482 – 1567
Today’s expected range: 1472 – 1550

Resistance: 1519, 1535, 1550
Support: 1472, 1488, 1496

FBM KLCI - technical correction

Stocks on Bursa Malaysia closed mostly lower yesterday on continued losses in blue-chips counters, as sentiment turned cautious amid news of China’s latest rate hike. The weak performance of the local market was also influenced by declines in regional Asian markets. However, gains in telecommunication counters such as Axiata and Maxis narrowed overall losses. The FBM KLCI declined 3.48 points or 0.23% to 1,536.07 after opening 2.08 points higher at 1,541.63. Losers beat gainers by 493 to 347 while 286 counters were unchanged. Total volume declined to 2.196 billion shares worth RM2.660 billion from Tuesday’s 3.178 billion shares worth RM2.736 billion.

The FBM KLCI opened 2.08 points higher at 1541.63 and surged to the intra-day high of 1541.98 within the first five minutes after market opened, heavy profit-taking activities that follow pushed the key index to the intra-day low of 1533.38, before bargain hunting on selected blue-chips helped push the key index to close off low at 1536.07. Chart-wise, the FBM KLCI formed a black hangman-like candlestick which confirmed the potential reversal signal issued by the black spinning-top candlestick formed a day earlier. With this candlestick pattern formation, the FBM KLCI is likely to correct further downward.

MACD has turned flat and is still below the zero-line, indicating weak momentum and continued bearish outlook for the FBM KLCI. RSI (14) is at 49.4 and has hooked downward, returning to the mildly bearish zone. Stochastic is at 44.6 and continued to climb higher, but is tapering off, indicating a slow down in the up cycle. Readings from the indicators show that the FBM KLCI is still in a relatively weak and mildly bearish condition for the short term, and hence may continue to drift sideways.

The short term trend of the FBM KLCI is currently sideways with a downward bias and is likely to consolidate further. The medium to long term uptrend, however, remained intact. Immediate overhead resistance zone is at 1541 to 1550, while the downside support zone is at 1532 to 1523. With the diminishing volume, the overall market is likely to turn slower in the near term.

Overnight, the Dow rose +6.74 points or +0.06% to close at 12,239.89. Today, the FBM KLCI is likely to trade within a range of 1523 to 1550.

This week's expected range: 1482 – 1567
Today’s expected range: 1523 – 1550

Resistance: 1541, 1546, 1550
Support: 1523, 1528, 1532

Stocks to watch: AEM, CBSTECH, EKOWOOD, RGB, MWE

FBM KLCI - gradually turning positive

Stocks on Bursa Malaysia closed higher yesterday, lifted by gains in telecommunication counters and selective interest in blue chip stocks. Interest in telecommunication counters helped to keep the local market steady despite mild profit taking. The FBM KLCI increased 3.95 points or 0.26% to 1,539.55, after opening 6.74 points higher at 1,542.34. The overall market sentiment was positive with gainers thumping losers by 506 to 379 while 257 counters were unchanged. Total volume declined to 3.18 billion shares valued at RM2.74 billion from 3.24 billion shares worth RM2.62 billion on Monday.

The FBM KLCI opened with an up gap of 6.74 points and climb to the intra-day high of 1544.35 at late morning. Profit-taking activities which surfaced pressed the key index to the intra-day low of 1538.76 before rebounding to close off low at 1539.55. Chart-wise, the FBM KLCI formed a black spinning-top candlestick which indicates mild selling pressure and the bears were in action despite the key index closing higher. The key index continued to stay below the 20 and 30-day moving averages (MA) which continued to act as barriers to the key index’s up move. If the FBM KLCI is able to clear the resistance and close above 1550, then it would re-gain its bullishness.

MACD has curved upward, albeit still below the zero-line, and together with the shorter histograms indicate a mild pick up in the momentum. RSI (14) at 51.5 has crossed above the 50 mark, and is moving back to the mildly bullish zone. Stochastic is at 42.6, and is continuing the up cycle which indicates the key index is gradually gaining its upward strength. Readings from the indicators show that the correction phase of the FBM KLCI is gradually over, and the key index is gradually re-gaining its upward momentum.

The short term trend of the FBM KLCI is currently sideways with an upward bias, while the medium and long term uptrend remained intact. Immediate overhead resistance zone is at 1540 to 1550, while the downside support zone is at 1520 to 1505. The FBM KLCI may continue its up move slowly, while the second and third liners will remain active on rotational play judging from the high volume registered over the last two days.

Overnight, the Dow rose +71.52 points or +0.59% to close at 12,233.15. Today, the FBM KLCI is likely to trade within a range of 1531 to 1550.

This week's expected range: 1482 – 1567
Today’s expected range: 1531 – 1550

Resistance: 1543, 1547, 1550
Support: 1531, 1535, 1537

FBM KLCI - higher but lack momentum

Stocks on Bursa Malaysia closed higher yesterday led by plantation-related counters amid the strong crude palm oil (CPO) prices. Gains on the Wall Street last Friday prompted investors to take position after the long Chinese New Year break. The benchmark FBM KLCI rose 3.78 points or 0.25% to close at 1,535.60. It had opened 7.42 points higher at 1,539.24. Decliners outnumbered advancers by 567 to 287 while 240 counters were unchanged. Total volume surged to 3.24 billion shares valued at RM2.62 billion from the 1.53 billion shares worth RM1.7 billion recorded last Wednesday.

The FBM KLCI opened with an up gap of 7.42 points at 1,539.24 and climb to the intra-day high of 1,541.43 within the first hour of trading. Profit-taking activities then push the key index to the intra-day low of 1,533.75 before rebounding to close at 1,535.60. The key index was trading in the positive territory throughout the day. Chart-wise, the FBM KLCI formed a black spinning-top candlestick which indicates the bears have a slight upper hand and indecision of the market to move higher. As mentioned in yesterday analysis, 1539 to 1552 will be a strong resistance zone for the key index to clear. The key index has now closed above the 5 and 10-day moving average (MA) but is still below the 20 and 30-day MAs. The FBM KLCI would have to close above the 20-day MA at 1551 for it to re-gain its bullishness.

MACD continued to slide lower, but at a slower pace, as show by its shorter histogram, which indicates a reduction in the downward momentum. Nevertheless, MACD is still in the negative territory, indicating the key index is still bearish in the short term. RSI (14) continued to climb higher to 49.3, is in the mildly bearish to neutral zone. Stochastic at 33.4 has continued to move higher, indicating the short term up cycle is continuing its trend. Readings from the indicators indicated that the FBM KLCI has staged a rebound, is about to turn bullish again if it can move above the 1550 psychological level.

The short term trend of the FBM KLCI is currently sideways with an upward bias, while the medium and long term uptrend remained intact. Immediate overhead resistance zone is at 1540 to 1550, while the downside support zone is at 1520 to 1505. The FBM KLCI may continue its sluggish up move but the second and third liners will remain active judging from the high volume registered yesterday.

Overnight, the Dow rose +69.48 points or +0.57% to close at 12,161.63. Today, the FBM KLCI is likely to trade within a range of 1524 to 1549.

This week's expected range: 1482 – 1567
Today’s expected range: 1524 – 1549

Resistance: 1540, 1545, 1549
Support: 1524, 1529, 1532

Stocks to watch: RAMUNIA, BENALEC, ASB

FBM KLCI - likely to re-gain momentum

Stocks on Bursa Malaysia ended the Year of the Tiger on a positive note last Wednesday, 2nd Feb 2011, before the arrival of the Year of the Rabbit. The benchmark FBM KLCI ended the holiday-shortened week to close 11.88 points higher at 1,531.82 from Monday’s close of 1519.94, after the half-day trading on the eve of Lunar New Year. Week-on-week, it gained 9.93 points from the previous Friday’s close of 1,521.89. Gainers led losers by 674 to 138 while 172 counters were unchanged. Turnover increased to 1.532 billion shares worth RM1.702 billion, despite half a day trading, from 1.415 billion shares worth RM2.08 billion on Monday.

Taking cue from the bearish performance of Wall Street the previous Friday, the FBM KLCI opened with down gap of 14.22 points at 1507.67 on last Monday and plunged to the intra-day low of 1505.85 before rebounding strongly to close at 1,519.94, losing only 1.95 points. Bursa Malaysia was closed for Federal Territory Holiday on Tuesday. The benchmark index continue to move higher Wednesday on investors’ optimism that the market may rally after the long Chinese New Year holiday break, following better-than-expected manufacturing data from the US and China.

On the weekly chart, the FBM KLCI formed a bullish piercing-line candlestick which indicates counter-attack by the bulls after three consecutive weeks of profit-taking correction, and the key index may continue to move higher. The key index had bounced off the 20-week moving average (MA), but is below the 5-week MA which is currently at 1548.65, and this may act as a barrier to the key index’s up move.

On the daily chart, The FBM KLCI formed a bullish white candlestick with an up gap, which indicates a bullish rebound. It hit the intra-day high of 1536.26 but pulled back on mild profit-taking. The key index is currently closing above the 5 and 60-day MAs but is still below the 10 and 30-day MAs at 1538, and the 20-day MA at 1552 may together act as strong resistances to the up move of the FBM KLCI.

Weekly MACD continued to slide lower, indicating a continued loss of weekly momentum. Nevertheless, it is still in the positive zone, and hence, the current weakness may just be a short term correction from the weekly perspective. Daily MACD has, however, crossed below the zero line, indicating the key index has turned bearish for the short term from the daily perspective. Weekly RSI (14) has hooked up, and its reading of 63.6 indicates the key index is still bullish on the weekly chart. However, daily RSI (14) at 47.1 is still bearish. Weekly Stochastic continued to slide lower to 57.9, while daily stochastic has continued to climb higher, albeit in a slow pace. Readings from the indicators gave a mixed picture of the FBM KLCI, which indicates the key index is likely to continue its sideways consolidation.

The short term trend of the FBM KLCI remained down as the key index is still closing below the 10, 20 and 30-day MAs. The medium term uptrend is at test now as the index continues to hover around the 60-day MA. The long term uptrend however, is still intact. Immediate overhead resistance zone is at 1539 to 1552, while the immediate downside support zone is at 1520 to 1505.

With the long Chinese New Year holiday break officially over today plus the positive close of the Dow last week, the FBM KLCI is expected to pick up its momentum again. Last Friday, the Dow rose +29.89 points or +0.25% to close at 12,092.15. This week, the FBM KLCI may trade within a range of 1482 to 1567, and for today it is likely to trade within a range of 1514 to 1548.

This week's expected range: 1482 – 1567
Today’s expected range: 1514 – 1548

Resistance: 1538, 1543, 1548
Support: 1514, 1519, 1525

Stocks to watch: MAHSING, EKOVEST, HEXAGON, OLYMPLIA, MPHB

Gong Xi Fa Cai

Millionaire Trend Trader wishes all our readers Gong Xi Fa Cai and hopes that the Year of the Rabbit will bring prosperity, joy and wealth to all. Remember to drive safely!

FBM KLCI - sideways consolidation

Stocks on Bursa Malaysia ended broadly lower on Monday with share prices recovered some of its losses in eleventh hour buying but the benchmark FBM KLCI still finished in the minus territory. The market barometer, FBM KLCI, closed 1.95 points easier at 1,519.94 after opening 14.22 points lower at 1,507.67. Decliners outpaced advancers by 428 to 300 while 280 counters were unchanged. Volume rose to 1.42 billion shares, worth RM2.08 billion, from 1.35 billion shares, valued at RM1.98 billion, registered last Friday. The market was closed yesterday for the Federal Territory Day and will be trading for only half a day today ahead of the CNY.

The FBM KLCI opened with a down gap of 14.22 points at 1507.67 and plunged to the low of 1505.85 within the first fifteen minutes of the day, losing 16.04 points at its worst, but the key index recovered gradually after the fear to close only 1.95 points lower, near the high of the day. Chart-wise, the FBM KLCI formed a white Marubozu like candlestick in possible star position, which indicates bargain hunters were buying into weakness, and the key index may continue with its rebound today. Immediate strong overhead resistance zone is at 1528 to 1538, while the critical downside support is at 1505 and 1500.

MACD continued to slide lower, and has just crossed below the zero line, indicating the FBM KLCI is turning bearish, and the correction may prolong. RSI (14) dipped lower to 39.8, is moving into the very bearish zone, and is a little oversold. Stochastic is flat at 24.7. Readings from the indicators show that the short term technical conditions of the FBM KLCI is relatively bearish, and may continue its consolidation.
The short term trend of the FBM KLCI is currently down, and the key index has also closed below the important medium term 60-day moving average, giving a first sign that the medium term uptrend is being challenge now. The long term uptrend is, however, still intact.

As the market is only open for half a day trading today, it may stay quiet in terms of volume, however, the second and third liners may stay active in rotational play. Overnight, the Dow rose +148.23 points or +1.25% to close at 12,040.16. Today, the FBM KLCI is likely to trade within a range of 1500 to 1530

I wish all my readers a Happy and Prosperous CNY!

This week's expected range: 1501 – 1547
Today’s expected range: 1500 – 1530

Resistance: 1525, 1530, 1535
Support: 1495, 1500, 1510

Stocks to watch: MAHSING, HWGB, HEVEA, MPHB, HEXAGON