Millionaire Trend Trader: FBM KLCI

Wednesday, June 22, 2011

FBM KLCI - marginally higher

Stocks on Bursa Malaysia ended mixed yesterday with the benchmark FBM KLCI climbing back to the crucial 1,560-point level. Overall, the market sentiment was weak with most investors sidelined awaiting new leads and the outcome of US Federal Open Market Committee meeting today. The FBM KLCI rose 1.60 points, or 0.1%, to close at 1,560.79 after opening 1.08 points higher at 1,560.27. Losers led gainers by 473 to 268 while 320 counters were unchanged. Turnover increased to 952.98 million shares worth RM1.56 billion from 849.81 million shares worth RM1.4 billion on Monday.

The FBM KLCI opened 1.08 points higher at 1,560.27 and slipped to the intra-day low of 1,557.68 within the first forty five minutes of trade. The key index rebounded and was moving in and out of the positive and negative zone for a major part of the day before ending in the positive territory. Chart-wise, the FBM KLCI formed a white hammer candlestick which indicates buying support from the bulls after being beaten down in early trade. The key index is at a critical level now and is searching for its direction; a breakout above 1,566 could see it rally towards the historical high of 1,576.95, while a break below 1,556 will see it falling back to the consolidation zone.

MACD was marginally higher, indicating positive but weak upward momentum. RSI (14) hooked up slightly to 59.3, indicating the short term relative strength of the key index is still mildly bullish. Stochastic continued to climb higher to 83.2, indicating the short term up cycle is still intact. Nonetheless, the stochastic reading showed that the key index is moving into the short term overbought zone and faces risk of pullback. Readings from the indicators showed that the FBM KLCI is in positive in strength but weak in momentum.

The underlying short, medium and long term trend of the FBM KLCI is currently up. However, the key index is lacking in momentum, as can be seen from the volume traded which has been staying below the 1 billion shares mark. Without any fresh leads, the FBM KLCI, and the market in general, is likely to continue drifting sideways.

Overnight, the Dow rose +109.63 points or +0.91% to close at 12,190.01. Today, the FBM KLCI is likely to trade within a range of 1,554 to 1,566.

This week's expected range: 1529 – 1585
Today’s expected range: 1554 – 1566

Resistance: 1563, 1564, 1566
Support: 1554, 1556, 1558

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Wednesday, June 22, 2011

FBM KLCI - marginally higher

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