Millionaire Trend Trader: FBM KLCI - higher on lower volume

Friday, March 25, 2011

FBM KLCI - higher on lower volume

Stocks on Bursa Malaysia held on to their gains until the end of trade yesterday on continued buying interest in selected blue chips. The FBM KLCI gained 1.87 points or 0.12% to 1,513.84 after opening 1.12 points higher at 1,513.09. Gainers outpaced losers by 444 to 299 while 306 counters were unchanged. Turnover fell to 1.042 billion shares worth RM1.853 billion from Wednesday’s 1.295 billion shares worth RM1.779 billion.

The FBM KLCI opened 1.12 points higher at 1,513.09 but was sold down to the intra-day low of 1,510.00 on profit-taking in the first hour of trade. The key index, however, rebounded from there to climb to the intra-day high of 1,514.91 before closing off high at 1,513.84. Chart-wise, the FBM KLCI formed a hanging-man like candlestick which is a possible top reversal candlestick pattern. This goes to show that the key index is facing some selling pressure when it moves into the resistance zone of 1,510 to 1,530.

MACD continued to move higher, albeit in the negative zone, indicates that the momentum is picking up gradually. RSI (14) is higher at 52.9, and is still in the neutral zone with a bullish bias. Stochastic continued to climb higher to 68.2, which indicates a continuation of the short term up cycle and gradual gain in market strength. Readings from the indicators showed that the FBM KLCI is gaining is upward momentum gradually, and hence may continue to move higher.

The current short term trend of the FBM KLCI is up, as the key index continued to stay above it short term moving averages. The medium term trend has turned sideways as indicated by the 60-day MA which has turned flat, while the long term trend remained up. Immediate overhead resistance zone for the FBM KLCI is now at 1,515 to 1,530 while the downside support zone is at 1,500 to 1,474.

Overnight, the Dow rose +84.54 points or +0.70% to close at 12,170.56. Today, the FBM KLCI is likely to trade higher within a range of 1,506 to 1,520.

This week's expected range: 1457 – 1531
Today’s expected range: 1500 – 1519

Resistance: 1516, 1518, 1520
Support: 1506, 1508, 1510

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Friday, March 25, 2011

FBM KLCI - higher on lower volume

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