Millionaire Trend Trader: FBM KLCI - higher amid choppy trading

Thursday, May 26, 2011

FBM KLCI - higher amid choppy trading

Stocks on Bursa Malaysia finished mixed yesterday in choppy trading. The local market traded within a tight range as most investors remained sidelined amid the lack of market moving news. Sentiment was also dampened by the slump in regional stocks and commodities coupled with mounting concern over the European financial crisis. The FBM KLCI finished 12.05 points better at 1,528.98. Losers outpaced gainers by 422 to 294 while 334 counters were unchanged. Turnover decreased to 767.205 million shares, worth RM1.4 billion, from 812.197 million shares, worth RM1.54 billion, registered on Tuesday.

The FBM KLCI opened 1.12 points higher at 1,533.24 and fell to the intra-day low of 1,530.00 before rebounding to the intra-day high of 1,537.66. However, the rebound could not sustain and profit-taking activities pressed the key index to close off high at 1,533.57. Chart-wise, the FBM KLCI formed a white spinning-top candlestick which indicates indecision of market direction, where the bulls and the bears were in almost equal control for the day, with the bulls having a slight upper hand. The benchmark index is currently stuck in a sideways range-bound situation. The FBM KLCI will have to close above 1,538 in order for it to turn uptrend for the short term.

MACD continued to slide lower but is tapering off. It is sitting just right above the signal line, and a slight down move will lead to a dead-cross over the signal line. RSI (14) is slightly higher at 51.3, indicating the key index is currently in the neutral state. Stochastic is lower at 55.6, indicating the down cycle is still in force. Readings from the indicators showed that the FBM KLCI has lost its momentum and is currently in a state of consolidation.

The short and medium term trend of the FBM KLCI is currently sideways while the long term trend as indicated by the 200-day moving average is still up. Immediate overhead resistance zone is at 1,538 to 1,550, while the immediate downside support zone is at 1,530 to 1,525. With the volume getting smaller each day, the FBM KLCI is likely to remain in its current state of sideways consolidation.

Overnight, the Dow rebounded +38.45 points or +0.31% to close at 12,394.66. Today, the FBM KLCI is likely to trade within a range of 1,522 to 1,546.

This week's expected range: 1520 – 1565
Today’s expected range: 1522 – 1546

Resistance: 1538, 1542, 1546
Support: 1522, 1526, 1529

Stocks to watch: MBSB, CUSCAPI

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Thursday, May 26, 2011

FBM KLCI - higher amid choppy trading

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