Millionaire Trend Trader: FBM KLCI - marginally higher on technical rebound

Tuesday, April 26, 2011

FBM KLCI - marginally higher on technical rebound

Stocks on Bursa Malaysia closed mixed yesterday with the market barometer buoyed by gains from selected blue-chips. The FBM KLCI ended 1.3 points or 0.09% higher at 1,524.05 after opening at 1,523.46. Losers led gainers by 441 to 313 while 320 counters were unchanged. Turnover declined to 1.043 billion shares, valued at RM1.026 billion, from 1.157 billion shares, valued at RM1.173 billion, recorded last Friday.

The FBM KLCI opened 0.71 point higher at 1,523.46 and climb to the intra-day high of 1,526.83 within the first hour of trading before profit-taking activities pulled the key index to close off high at 1,524.05. Chart-wise, the FBM KLCI formed a white inverted hammer candlestick in Harami position, which indicates consolidation. The key index is currently trapped in a support and resistance zone formed of various moving averages (MA). It will have to break above the 1,537 resistance level posted by the 20-day MA in order to resume its short term uptrend.

MACD continued to slide lower, but the histogram has turned slightly shorter upward, indicating a reduction in the downward momentum and consolidation. RSI (14) has hooked up to 47.6, and is still in the bearish bias neutral zone. Stochastic is at 19.2, and has turned downward into the oversold zone, indicating weak market strength. Readings from the indicators showed that the FBM KLCI is currently weak and the consolidation is likely to prolong.

The short term trend of the FBM KLCI has turned sideways and so is the medium term trend. The long term uptrend, nonetheless, is still up. Immediate overhead resistance zone is at 1,527 to 1,537, while the downside support zone is at 1,519 to 1,514. Looking at the technical conditions, the FBM KLCI is likely to extend its consolidation, while the second and third liners may remain active in rotational play.

Overnight, the Dow fell -26.11 or -0.21% to close at 12,479.88. Today, the FBM KLCI is likely to trade within a range of 1,518 to 1,531.

This week's expected range: 1493 – 1556
Today’s expected range: 1518 – 1531

Resistance: 1527, 1529, 1531
Support: 1518, 1520, 1522

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Tuesday, April 26, 2011

FBM KLCI - marginally higher on technical rebound

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