Millionaire Trend Trader: FBM KLCI - higher on improved sentiment

Thursday, March 10, 2011

FBM KLCI - higher on improved sentiment

Stocks on Bursa Malaysia ended firmer yesterday as investors' interest stayed focused on sectors related to the Economic Transformation Programme (ETP) initiatives, primarily plantation and oil and gas. Market sentiment was positive following fresh positive corporate developments and upbeat outlook on the investments while the firmer Wall Street overnight provided an additional boost. The FBM KLCI rose 6.03 points or 0.40% to 1,523.69 after opening 1.52 points higher at 1,519.18. Gainers outpaced losers by 575 to 211 while 267 counters were unchanged. Turnover rose to 1.50 billion shares worth RM2.24 billion from 1.17 billion shares worth RM1.75 billion on Tuesday.

The FBM KLCI opened 1.52 points higher at 1,519.18 and traded higher on a gradual pace throughout the day to touch the intra-day high of 1,525.69 before late profit-taking activities caused it to close off high at 1,523.69. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates an attempt to breakout from the consolidation. The key index is now closing right above the neckline of the head-and-shoulder pattern and is re-testing the resistance zone of 1,520 to 1,528. If it can breakthrough this zone successfully, then it might rally towards the next target of 1,545.

MACD continued to climb higher, albeit below the zero-line, indicates a gradual gain in upward momentum. RSI (14) is higher at 54, and moving towards the mildly bullish zone. Stochastic is marginally higher at 81.1, entering the short term overbought zone and is tapering off, indicating a slow down in the upward strength. Readings from the indicators showed a gradual gain in the upward momentum and market strength of the FBM KLCI.

The short term trend of FBM KLCI has turned up, and its medium term trend is sideways as indicated by the medium term 60-day moving average which has basically turned flat, while the long term uptrend remained intact. Immediate overhead resistance zone is at 1,525 to 1,530, while the downside support zone is at 1,510 to 1,500.

Overnight, the Dow fell a marginal -1.29 points or -0.01% to close at 12,213.09. Today, the FBM KLCI is likely to be range-bound within a range of 1,513 to 1,532.

This week's expected range: 1453 – 1584
Today’s expected range: 1513 – 1532

Resistance: 1527, 1529, 1532
Support: 1513, 1516, 1520

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Thursday, March 10, 2011

FBM KLCI - higher on improved sentiment

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