Millionaire Trend Trader: FBM KLCI - marginally lower and likely to rebound

Thursday, April 7, 2011

FBM KLCI - marginally lower and likely to rebound

Stocks on Bursa Malaysia closed mixed yesterday on mild profit-taking in selected blue chips. The FBM KLCI shed 0.18 of a point to 1,552.89 after opening flat at 1,553.07. Gainers led losers by 490 to 310 while 325 counters were unchanged. Turnover declined to 1.572 billion shares worth RM2.066 billion compared with 1.600 billion shares valued at RM1.970 billion on Tuesday.

The FBM KLCI opened flat at 1,553.07 and surged to the intra-day high of 1,553.90 within the first fifteen minutes. Profit-taking activities which surfaced pressed the key index to the intra-day low of 1,549.84, and the index hovers in the negative territory throughout the day before last minute buying of selected blue-chips lift it to close off low. Chart-wise, the FBM KLCI formed a Doji candlestick which indicates indecision of the index to move lower, and its longer lower shadow also showed buying support. Hence, the FBM KLCI is likely to rebound today.

MACD continued to climb higher, but its histogram is shorter for a second day, indicating a loss in the upward momentum. RSI (14) is marginally lower at 68.9, reflecting the mild correction of the key index, and nevertheless, it is still in the bullish zone. Stochastic oscillator is lower at 86.3 after crossing over its slow stochastic line, reflecting the pullback correction of the FBM KLCI. Signals from the indicators showed that the FBM KLCI is currently undergoing a mild pullback correction after the recent run-up, and the key index is expected to resume its upward move after the correction is over.

The FBM KLCI is undergoing a short term mild pullback correction which has not spoil the short term uptrend, and the key index is likely to re-test its recent high of 1,565 follow by the historical high of 1,577 once the correction is over. The medium term trend remained sideways, while the long term uptrend remained intact. Immediate overhead resistance zone is at 1,557 to 1,577, while the immediate downside support zone is at 1,550 to 1,544. The overall market is likely to remain active with rotational play on second and third liners while blue-chip stocks may continue its consolidation.

Overnight, the Dow rose +32.85 points or +0.27% to close at 12,426.75. Today, the FBM KLCI is likely to trade within a range of 1,546 to 1,560.

This week's expected range: 1483 – 1599
Today’s expected range: 1546 – 1560

Resistance: 1555, 1557, 1560
Support: 1546, 1548, 1550

Stocks to watch: DIGISTA, MEGB, BJFOOD, BENALEC, LINGUI

1 comment:

rajabrooke said...: interesting to note that we are coming up to trendline resistance on rsi,macd.; April 7, 2011 at 1:04 PM

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Thursday, April 7, 2011

FBM KLCI - marginally lower and likely to rebound

1 comment:

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