Millionaire Trend Trader: FBM KLCI - bullish Harami, poised to move higher.

Thursday, May 19, 2011

FBM KLCI - bullish Harami, poised to move higher.

Stocks on Bursa Malaysia closed mixed yesterday with profit-taking activities as well as bargain-hunting on selected key index-linked counters. Although stocks like Axiata, Public Bank and Digi were bearish, losses were capped by gains in CIMB, Sime Darby and Maxis. The FBM KLCI finished 5.0 points up or 0.32% better at 1,541.27, after opening 1.94 points higher at 1,538.21. Decliners outpaced advancers by 415 to 360 while 295 counters were unchanged. Turnover rose to 993.7 million shares valued at RM1.912 billion from 811.79 million shares worth RM1.23 billion recorded on Monday.

The FBM KLCI opened 1.94 points higher at 1,538.21 and surged to the intra-day high of 1,543.35 within the first thirty minutes of trading, but profit-taking which appeared quickly erode gains and pressed the key index towards the intra-day low of 1,537.33 before late buying on selected blue-chips lifted the index to close off low. Chart-wise, the FBM KLCI formed a bullish Harami candlestick pattern which is a one day reversal pattern, and hence the key index is poised to move higher. Immediate overhead resistance is at 1,545, at which the key index had failed to cross in the past two sessions. If the index is able to break above this level, it is likely to move higher to challenge the 1,550 psychological level and the recent high of 1,565.

MACD continued to climb higher, indicating a continuation in the upward momentum. RSI (14) has hooked up to 57.5, moving higher into the mildly bullish zone. Stochastic has turned upward to 84.4, indicating a pick up in the market strength and continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI is gradually turning more bullish, and hence may continue with its upward momentum to climb higher in the near term.

The short term trend of the FBM KLCI is currently up, while the medium term trend remained sideways, and the long term uptrend is still intact. The benchmark FBM KLCI has built its first base at the 1,474 to 1,500 level, and its second base at the 1,507 to 1,520 level, and looks poised to re-test its historical high. Immediate overhead resistance zone is at 1,545 to 1,565, while the immediate downside support zone is at 1,530, to 1,520.

Overnight, the Dow rose +80.60 points or +0.65% to close at 12,560.18. Today, the FBM KLCI is likely to trade within a range of 1,531 to 1,550.

This week's expected range: 1492 – 1575
Today’s expected range: 1531 – 1550

Resistance: 1544, 1547, 1550
Support: 1531, 1534, 1537

I can't access blogger.com or gmail at all while in China, Google was being blocked totally.

Some of the magnificent scenery photos of Mount Taishan, Shandong Province, China. Hope you enjoy it. (Double click on photo to enlarge)

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Thursday, May 19, 2011

FBM KLCI - bullish Harami, poised to move higher.

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