Millionaire Trend Trader: FBM KLCI - lower in quiet trading

Friday, June 10, 2011

FBM KLCI - lower in quiet trading

Stocks on Bursa Malaysia ended lower yesterday, dragged down by losses in selected blue-chips in tandem with the regional bourses following the bearish sentiment in US market. The FBM KLCI fell by 0.9 point to close at 1,550.89. Losers outpaced gainers by 374 to 330 while 347 counters were unchanged. Turnover fell to 697.436 million shares worth RM1.362 billion from Wednesday’s 852.144 million shares worth RM1.636 billion.

The FBM KLCI opened with an up gap of 2.31 points at 1,554.10 and surged to the intra-day high of 1,555.49 within the first fifteen minutes. The key index then pulled back and fluctuated in a narrow range in the positive zone for a major part of the day. However, last hour profit-taking on selected key heavyweights pushed the key index to close in the negative territory. Chart-wise, the FBM KLCI formed a dark-cloud-cover candlestick pattern, which is a top reversal pattern, and the key index might continue to move lower today. The key index is now sitting right on the psychological support level of 1,550, and a break below this level is likely to see the key index sliding lower towards the next level of support at 1,548 and 1,544.

MACD continued to slide lower, indicating a continuous loss of momentum; nonetheless, it is still above the signal line, thus, the present weakness should be viewed as just a correction. RSI (14) fell marginally to 56.4, indicating a continued loss in the market strength. Stochastic is marginally lower at 63.6, indicating the short term down cycle is still in force. Readings from the indicators showed that the FBM KLCI is currently undergoing a short term consolidation process, the underlying market strength is, nonetheless, still positive.

The short and medium term trend of the FBM KLCI is currently sideways, while the long term uptrend is still intact. Immediate overhead resistance zone is at 1,556 to 1,566, and the immediate downside support zone is at 1,548 to 1,540. With the volume continued to stay low, the FBM KLCI is likely to continue with its consolidation, while the second and third liners may continue to be in rotational play.

Overnight, the Dow rose +75.42 points or +0.63% to close at 12,124.36. Today, the FBM KLCI is likely to trade within a range of 1,544 to 1,558.

This week's expected range: 1520 – 1591
Today’s expected range: 1544 – 1558

Resistance: 1554, 1556, 1558
Support: 1544, 1546, 1549

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Friday, June 10, 2011

FBM KLCI - lower in quiet trading

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