Millionaire Trend Trader: FBM KLCI - gradually turning bullish

Wednesday, March 30, 2011

FBM KLCI - gradually turning bullish

Stocks on Bursa Malaysia ended higher yesterday despite a lukewarm regional market with heavyweights Petronas Chemicals and Sime Darby lifting buying sentiment. The FBM KLCI finished 5.84 points or 0.39% higher at 1,520.09 after opening 2.78 points better at 1,517.03. Advancers outpaced decliners by 543 to 264 while 269 counters were unchanged. Turnover rose to 1.756 billion shares worth RM2.182 billion from 1.280 billion shares worth RM1.613 billion on Monday.

The FBM KLCI opened with an up gap of 2.78 points at 1,517.03 but was sold down to hit the intra-day low of 1,514.05 on profit-taking within the first half an hour of trading. The key index rebounded from there and gradually climbed higher to finish the day at the highest point of 1,520.09. Chart-wise, the FBM KLCI formed a bullish white candlestick which breakout from the consolidation, and hence is likely to move higher to challenge the next level of resistance at 1,525 posted by the 60-day moving average (MA) and the critical resistance level at 1,530. If the FBM KLCI is able to close above the 1,530 level, the recent correction which started on 18-Jan-2011 would be considered over, and the key index would start a new uptrend.

MACD continued to move higher, and has just crossed the zero-line, signifying the FBM KLCI has just turned bullish. RSI (14) has turned upward to hit 56.4, moving into the mildly bullish zone. Stochastic continued to move higher and is at 82.5, signifying a continued gain in the key index’s strength. Readings from the indicators showed that the FBM KLCI is gradually turning bullish and is expected to continue to move higher.

The short term trend of the FBM KLCI remained up, and the 10-day MA has also just made a golden cross above the 30-day MA, confirming the short term uptrend. The medium term trend is sideways while the long term uptrend remained intact. Immediate resistance zone is at 1,525 to 1,530, while the downside support zone is now at 1,510 to 1,500.

Overnight, the Dow gained +81.13 points or +0.67% to close at 12,279.01. Today, the FBM KLCI is likely to trade within a range of 1,510 to 1,527.

This week's expected range: 1483 – 1539
Today’s expected range: 1510 – 1527

Resistance: 1523, 1525, 1527
Support: 1510, 1512, 1516

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Wednesday, March 30, 2011

FBM KLCI - gradually turning bullish

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