FBM KLCI - lower on bearish sentiment

Stocks on Bursa Malaysia ended broadly lower yesterday, weighed on by concerns over US debt talks and a downgrade of its credit rating. The uncertain situation in the US kept the market under selling pressure, and investors were getting nervous over whether US lawmakers would be able to reach an agreement to prevent a government default and allow the country to maintain its “AAA” credit rating. The FBM KLCI fell 6.26 points, or 0.4%, to 1,551.91, after hitting an intra-day low of 1,544.96. Losers overwhelmed gainers by 480 to 290 while 274 counters closed unchanged. Volume increased to 1.06 billion shares valued at RM1.74 billion compared with 1.05 billion shares worth RM1.7 billion on Wednesday.

Taking cue from the weak performance of the Dow overnight, the FBM KLCI opened with a down gap of 2.45 points at 1,555.72, and slid to the intra-day low of 1,544.96 at mid morning, before staging a rebound to close at 1,551.91. Chart-wise, the FBM KLCI formed a black hammer candlestick, which is a bottom reversal candlestick formation. It indicates the bears were initially strong in driving down the share prices, but the bulls later emerged to buy up stocks at low levels. As mentioned in previous analysis, if the FBM KLCI breaks below the 1,550-point psychological level, it is likely to slide towards the 1,540 area, and it did. The key index is now standing on the edge of the cliff, and as the candle formed yesterday is a black one, it indicates the sentiment is still bearish. If the 1,550-point psychological support level cannot be defended, it will continue its downtrend journey to the next lower support level at 1,538.

MACD continued to slide lower into the negative zone, indicating an increase in the downward momentum. RSI (14) is lower at 38.3, indicating the FBM KLCI has turned bearish. Stochastic continued to slide lower to 15.2, indicating the market strength is becoming weaker and the down cycle is in continuation. Readings from the indicators showed that the FBM KLCI is technically bearish for the short term, and the correction or consolidation may prolong until there are clear signs of bottoming.

The short term trend of the FBM KLCI continued to be down, while the medium term trend has just turned bearish as the key index has now closed below the 60-day moving average (MA). The long term uptrend is still intact. However, it maybe subjected to test very soon. The downside support zone provided by the cluster of long term MAs is at 1,538 to 1,512-point levels, and the key index should be able to see strong support when it approaches this zone.

Overnight, the Dow fell -62.44 points or -0.51% to close at 12,240.11. Today, the FBM KLCI is likely to trade within a range of 1,535 to 1,567.

This week's expected range: 1529 – 1600
Today’s expected range: 1535 – 1567

Resistance: 1557, 1562, 1567
Support: 1535, 1540, 1546

FBM KLCI - pullback on profit taking

Stocks on Bursa Malaysia ended mixed yesterday with investor interest confined to selective sectors and stocks, including telecommunication and plantation counters. The market was concerned over progress in the plan to lift the US debt ceiling that has triggered a broad sell-off in risky assets worldwide. The FBM KLCI fell 3.6 points, or 0.23%, to 1,558.17. Market breadth was positive with advancers leading decliners by 383 to 320 while 343 counters closed unchanged. Volume rose to 1.05 billion shares worth RM1.7 billion from 1.04 billion shares valued at RM1.54 billion on Tuesday.

The FBM KLCI opened 0.18 point firmer at 1,561.95 but was sold down to the intra-day low of 1,557.26 within the first ten minutes. It rebounded and touched the intra-day high of 1,565.00 before late sell off which sent the key index to close near the low of the day. Chart-wise, the FBM KLCI formed a dark-cloud-cover candlestick pattern which is a reversal pattern. The price action of the key index indicates that it is likely to continue with its current downtrend and consolidation. It is likely to test the medium term 60-day MA support which is currently at 1,556-point, a break below this level is likely to see the key index sliding lower to test the psychological support level of 1.550.

MACD continued to slide lower into the negative zone, but the histogram is shorter upward, indicating the downward momentum is slowing down, reflecting the current consolidation mode. RSI (14) is lower at 42.3, indicating the short term relative strength of the key index is getting more bearish. Stochastic is at 16.1, and has fallen back to the oversold zone which indicates weak market strength and the down cycle is likely to continue. Readings from the indicators showed that the FBM KLCI is currently very weak and bearish, and the consolidation process is likely to continue.

The short term trend of the FBM KLCI remained down, while the medium term uptrend is at test. Nonetheless, the long term trend is still up. Immediate downside support zone is at 1,556 to 1,550, and a break below the 1,550-point level is likely to see the key index slide toward the 120-day MA support at 1,538. Overhead resistance zone is at 1,558 to 1,570.

Overnight, the Dow fell -198.75 points or -1.59% to close at 12,302.55. Today, the FBM KLCI is likely to trade within a range of 1,547 to 1,572.

This week's expected range: 1529 – 1600
Today’s expected range: 1547 – 1572

Resistance: 1563, 1568, 1572
Support: 1547, 1552, 1555

Stocks to watch: AIRASIA, SCABLE, SOP, TDM, KULIM-WC, TM,

FBM KLCI - possible bottom reversal

Stocks on Bursa Malaysia closed higher yesterday on active buying of blue-chips, particularly finance and plantation, and in line with gains on regional markets. The market took the cue from the US market’s overnight weak close and started out in negative territory due to selling pressure. The FBM KLCI closed higher by 2.17 points or 0.14% to 1,561.77 after opening 2.13 points easier at 1,557.47. Market breadth was positive with advancers leading decliners by 374 to 334 while 325 counters closed unchanged. Volume rose to 1.04 billion shares valued at RM1.54 billion from 810.53 million shares worth RM1.57 billion registered on Monday.

Taking cue from the weak overnight close of the US market, the FBM KLCI opened with a down gap of 2.13 points at 1,557.47 and slipped to the intra-day low of 1,554.58 within the first fifteen minutes. The key index rebounded and climbs upward gradually to hit the intra-day high of 1,561.91 before ending the day slightly off high at 1,561.77. Chart-wise, the FBM KLCI formed a piercing-line candlestick, which is a bottom reversal pattern. However, a confirmation of the bottom reversal can only be established if the key index is able to close above the 1,566-point level, otherwise, it may just turn out to be a technical rebound, and the downtrend will continue.

MACD continued to slide lower and crossed below the zero-line, sending out a bearish sell signal for the short to medium term. RSI (14) has hooked upward to 44.9, indicating the short term relative strength of the key index is mildly bearish. Stochastic is at 21.3, and has again crossed below its slow stochastic line, flashing out a sell signal, and indicating a possible continuation of the current down cycle. Readings from the indicators signaled that the FBM KLCI is currently weak and the momentum is negative bias, and hence the current correction is likely to prolong.

With the FBM KLCI continued to close below all the short term moving averages (MA), the short term trend remained down. The key index had tested the support of the medium term 60-day MA at 1,555 yesterday and rebounded off it. As the key index is staying just slightly above the 60-day MA, it is critical to see whether the key index is able to hold well above it. The long term uptrend, nonetheless, is still intact. Immediate support zone is at 1,554 to 1,550, while the overhead resistance zone is at 1,566 to 1,570.

Overnight, the Dow fell another -91.50 points or -0.73% to close at 12,501.30. Today, the FBM KLCI is likely to trade within a range of 1,549 to 1,570.

This week's expected range: 1529 – 1600
Today’s expected range: 1549 – 1570

Resistance: 1565, 1567, 1570
Support: 1549, 1552, 1556

FBM KLCI - reversed downward

Stocks on Bursa Malaysia ended broadly lower yesterday in line with the weak performance of regional bourses, with the FBM KLCI slipped below the 1,560-point level as regional markets were pulled down by the debt impasse in Washington which may trigger the first-ever US debt default. The FBM KLCI fell 5.46 points or 0.35% to 1,559.60 after opening 0.4 point better at 1,565.46. Market breadth was negative with losers outnumbering gainers by 505 to 203 while 291 were unchanged. A total of 857.415 million shares valued at RM1.361 billion changed hands compared with 1.166 billion shares worth RM1.993 billion last Friday.

The FBM KLCI opened 0.4 point higher at 1,565.46 and slipped lower throughout the day with intermittent weak rebound to hit the intra-day low of 1,558.51 before ending off low at 1,559.60. Chart-wise, the FBM KLCI formed a bearish black candlestick which indicates sellers were in control for the day. The appearance of this candlestick has served as a confirmation to the reversal signal generated by the hanging-man candlestick formed last Friday, and the FBM KLCI is likely to slide further downward. Immediate support for the key index is expected at 1,555-point level provided by the 60-day moving average (MA), and at 1,552-point level. The psychological support level at 1,550 is a critical support level, as a break below this level will likely see the FBM KLCI sliding towards the 1,543 to 1,537 area.

MACD continued to slide lower towards the zero-line and is currently just staying slightly above it, and a slip below the zero-line would officially mean the FBM KLCI has turned bearish for the medium term. RSI (14) has slipped lower to 42.9, indicating the short term relative strength of the key index is turning bearish. Stochastic is at 24.3 and has hooked downward, albeit still above the slow stochastic line, indicating weak market strength and a possible continuation of the down cycle. Readings from the indicators showed a weak and bearish looking FBM KLCI, and the weakness is likely to continue for the short term with extended consolidation.

The short term trend of the FBM KLCI remained down, and the medium term uptrend is facing a challenge. The long term uptrend, however, is still intact. Immediate downside support zone is at 1,555 to 1,550 while the overhead resistance zone is at 1,566 to 1,570. In view of a lack of catalyst locally coupled with a bearish external environment, the FBM KLCI is likely to further consolidate itself for the short term with more downsides to come.

Overnight, the Dow fell -88.36 points or -0.70% to close at 12,592.80. Today, the FBM KLCI is likely to trade within a range of 1,549 to 1,572.

This week's expected range: 1529 – 1600
Today’s expected range: 1549 – 1572

Resistance: 1564, 1569, 1572
Support: 1549, 1554, 1556

FBM KLCI - likely to further consolidate

Stocks on Bursa Malaysia ended last week on a firmer note boosted by buying interest from investors, although the benchmark FBM KLCI closed in the red on Friday. The market barometer remained in negative territory for the day weighed by the easing of selected heavyweight stocks and concerns of inflation. The FBM KLCI eased 0.75 point to 1,565.06 after opening 0.77 point better at 1,566.58, week-on-week, it fell 12.19 points from 1,577.25 points the previous week. Market breadth was positive with gainers outnumbering losers by 462 to 249, while 332 counters were unchanged. Volume decreased to 1.166 billion shares worth RM1.993 billion compared with 1.2 billion shares worth RM2.6 billion transacted on Thursday, while weekly volume increased to 4.900 billion shares valued at RM9.243 billion from 3.798 billion shares valued at RM7.22 billion the previous week.

The FBM KLCI opened last week 1.02 points lower at 1,576.23 and slid lower throughout the day to end 14.67 points lower at 1,562.58, on concerned over the lingering global debt situation which continued to influence the performance of global stock markets. The key index continued its slide on Tuesday to hit the intra-week low of 1,552.71 before rebounding to close 6.94 points lower at 1,555.64. On strong overnight rebound of the US stock market and positive leads from Asian bourses, the FBM KLCI rebounded 6.95 points higher to close at 1,562.59 on Wednesday. On Thursday, the key index continued its rise to end 3.22 points better at 1,565.81, and the market was generally supported by buying interest in newly-listed Bumi Armada which was the top gainer and most actively traded stock. The FBM KLCI ended the week to ease 0.75 point to 1,565.06 on profit-taking in selected blue-chips.

On the weekly chart, the FBM KLCI formed a black hammer-like candlestick which indicates sellers were initially strong in pushing the key index down for the week, but buyers later surfaced to push the index back to slightly above the mid range of the week. As the rebound was not very strong, the FBM KLCI is likely to continue to consolidate this week. The key index is currently sitting right on the 10-week moving average (MA), a close this week below the 1,565 level will likely see the index sliding lower to test the next level of support at 1,545 to 1,540 provided by the 20 and 30-week MAs. On the daily chart, the FBM KLCI formed a hanging-man candlestick, which is a top reversal candlestick pattern, on last Friday, and the key index is likely to correct itself after two days of rebound last week. Immediate support zone lies at 1,560 to 1,552.

Weekly MACD continued to slide lower, indicating a reduction of the weekly momentum, and nonetheless, it is still above its weekly signal line. Daily MACD continued to slide lower, but at a reduced pace, as indicated by the shorter histogram. Weekly RSI (14) continued to slide lower to 57 from 60.8 the previous week, indicating the weekly relative strength is weakening and moving into the mildly bullish zone from the bullish zone. Daily RSI (14) was marginally lower at 46.7, indicating the daily relative strength is neutral with a bearish bias. Weekly Stochastic has slid lower to 80.1, indicating a possible continuation of the weekly down cycle. Daily Stochastic, however, continued to move higher to 26.5 after hitting the oversold level, indicating a technical rebound. Readings from the technical indicators showed that the momentum and market strength of the FBM KLCI is currently still weak, and the consolidation process may prolong.

The short term trend of the FBM KLCI remained down, as the key index remained below the 10, 20 and 30-day MAs. The key index will have to close above the 30-day Ma at 1,570-point level in order for the short term downtrend to reverse up. The medium and long term trend, however, remained up. Immediate overhead resistance zone is at 1,566 to 1,576, while the immediate downside support zone is at 1,560 to 1,552.

Last Friday, the Dow fell -43.25 points or -0.34% to close at 12,681.16. This week, the FBM KLCI is likely to trade within a range of 1,529 to 1,600, and for today it is likely to trade within a range of 1,558 to 1,571.

This week's expected range: 1529 – 1600
Today’s expected range: 1558 – 1571

Resistance: 1567, 1569, 1571
Support: 1558, 1560, 1562

FBM KLCI - continued climbing higher

Stocks on Bursa Malaysia ended higher yesterday led by gains in selected heavyweights. The local bourse was generally supported by buying interest in newly-listed Bumi Armada which was the top gainer and most actively traded stock yesterday. The FBM KLCI ended 3.22 points or 0.21% or better at 1,565.81. Market breadth was positive with 386 gainers compared with 321 losers while 349 were unchanged. Trading volume increased to 1.2 billion shares, worth RM2.6 billion, from 803.41 million shares, worth RM1.3 billion, transacted on Wednesday.

The FBM KLCI opened 1.04 point higher at 1,563.63 and surged to the intra-day high of 1,566.20 within the first fifteen minutes, and profit-taking activity sent the key index into the negative territory to touch the intra-day low of 1,560.59 near noon before recovering to close near the day’s high. Chart-wise, the FBM KLCI formed a small white hammer-like candlestick which indicates the bears were initially strong in pushing down the index but later the bulls staged a counter attack to push the index to a level near the high of the day. The FBM KLCI is thus likely to continue its momentum to move higher. However, the key index is likely to meet heavy resistances at the 1,566 to 1,577 zone.

MACD was lower but at a reduced pace, as shown by the shorter histogram, indicating a reduction in the downward momentum. RSI (14) continued to climb higher to 47.2, is approaching the neutral zone from the mildly bearish zone. Stochastic has hooked up to 19.5 after hitting the low of 10.8 the day before. Readings from the indicators showed that the FBM KLCI is undergoing a rebound. As the momentum and market strength is still relatively weak, the rebound may not go very far.

The short term trend of the FBM KLCI remained down as the key index continued to stay below the short term moving averages. The medium and long term trend, however, remained up. Immediate overhead resistance zone is at 1,566 to 1,577, while the downside support zone is at 1,560 to 1,552.

Overnight, the Dow rose +152.50 points or +1.21% to close at 12,724.41. Today, the FBM KLCI is likely to trade within a range of 1,556 to 1,572.

This week's expected range: 1544 – 1606
Today’s expected range: 1556 – 1572

Resistance: 1568, 1570, 1572
Support: 1556, 1558, 1562

FBM KLCI - higher on technical rebound

Stocks on Bursa Malaysia closed higher yesterday on bargain hunting. The strong overnight rebound of the US stock market and positive leads from Asian bourses also prompted investors to take positions. Asian markets were higher yesterday boosted by healthy earnings reports from US companies and optimism that US and European politicians could work together to address their debt problems. The FBM KLCI rose 6.95 points, or 0.45%, to close at 1,562.59 after opening 2.81 points higher at 1,558.45. Market breadth was bullish with 472 gainers as compared with 266 losers while 303 were unchanged. Trading volume, however, declined to 803.41 million shares worth RM1.3 billion from 977.86 million shares worth RM1.94 billion on Tuesday.

The FBM KLCI opened 2.81 points higher at 1,558.45, taking cue from the strong overnight gain on Wall Street, and moved higher to touch the intra-day high of 1,564.95 within the first hour of trading. The key index then moved sideways in a tight trading range to end the day off high at 1,562.59. Chart-wise, the FBM KLCI formed a bullish Harami candlestick pattern which indicates a possible changed in the investors’ sentiment from bearish to bullish. However, the up swing could well be just a technical rebound, and a confirmation is required to confirm the trend change. Immediate strong overhead resistance lies at 1,566 to 1,570-point level.

MACD continued to slide lower but at a reduced pace, indicating a reduction in the downward momentum. RSI (14) has hooked up to 44.7, indicating the short term relative strength of the FBM KLCI is mildly bearish. Stochastic is at 10.8, and has continued to slide lower into the short term oversold zone, indicating very weak market strength, and the down cycle is still in force. Readings from the technical indicators showed that the FBM KLCI is currently very weak and bearish, and the correction or consolidation may prolong.

The short term trend of the FBM KLCI remained down, while the medium and long term trend is still up. For the immediate near term, the FBM KLCI is likely to move sideways or range-bound to consolidate itself. Immediate support zone is at 1,552 to 1,536 provided by the 60 and 120-day moving averages, while the immediate overhead resistance zone is at 1,566 to 1,570.

Overnight, the Dow fell -15.51 points or -0.12% to close at 12,571.91. Today, the FBM KLCI is likely to trade within a range of 1,552 to 1,572.

This week's expected range: 1544 – 1606
Today’s expected range: 1552 – 1572

Resistance: 1566, 1569, 1572
Support: 1552, 1555, 1559

Stocks to watch: HIAPTEK, PERWAJA, ENG, RANHILL

FBM KLCI - downtrend continued

Stocks on Bursa Malaysia ended broadly lower yesterday as global debt fears continued to affect investor sentiment. However, bargain hunting on key heavyweights such as Petronas Chemicals helped trim the losses. The benchmark FBM KLCI fell 6.94 points or 0.44% to close at 1,555.64. Losers led gainers by 429 to 292 while 323 counters were unchanged. Turnover increased to 977.863 million shares worth RM1.939 billion from 753.757 million shares worth RM1.382 billion on Monday.

The FBM KLCI opened 0.1 point lower at the day’s high of 1,562.48 and fell to the intra-day low of 1,552.71 with intermittent weak rebound. The key index rebounded strongly at late afternoon to 1,561.58, recovering much of the loss ground, but last minute liquidation push the index to close at 1,555.64. Chart-wise, the FBM KLCI formed another bearish black candlestick with a short lower shadow, and it shows that the bear was still in control for the day. As expected, the key index had came down to test the 60-day moving average (MA) support, which is now at 1,553.35, and rebounded off it. This shows some buying support from the medium term investors at the current level. Immediate critical support for the FBM KLCI is the 1,550-point psychological support level, if this support level could not hold, there is a high probability that the FBM KLCI may slide further southward to test the long term 120-day support at 1,536.

MACD continued to slide lower, indicating the bearish momentum is gaining strength. RSI (14) was lower at 38.9, indicating the short term relative strength of the key index has turned bearish. Stochastic continued to slide lower to 17.1, entering the short term oversold zone. Readings from the technical indicators showed that the FBM KLCI is currently bearish, and the correction is likely to extend. However, as the stochastic indicator showed that the market is short term oversold, some rebound maybe expected soon.

The short term trend of the FBM KLCI remained down, while the medium term trend is being tested but is still up. The long term uptrend, nonetheless, is still intact. Immediate downside support zone is at 1,552 to 1,536, while overhead resistance zone is at 1,566 to 1,597.

Overnight, the Dow rose +202.26 points or +1.63% to close at 12,587.42. Today, the FBM KLCI is likely to trade within a range of 1,541 to 1,572

This week's expected range: 1544 – 1606
Today’s expected range: 1541 – 1572

Resistance: 1562, 1567, 1572
Support: 1541, 1547, 1551

Stocks to watch: KURASIA, DXN, WIJAYA

FBM KLCI - bearish down move

Stocks on Bursa Malaysia ended broadly lower yesterday in thin trading as the lingering global debt situation continued to influence the performance of global stock markets. Selling pressure emerged as a result of the US and European debt dilemma which saw the FBM KLCI ended 14.67 points or 0.93% lower at 1,562.58, with investors turning cautious and many abstaining from the market. Market breadth was negative with losers outnumbering gainers by 646 to 159 while 268 counters were unchanged. A total of 753.757 million shares, valued at RM1.383 billion, were traded yesterday against 697.71 million shares, valued at RM1.43 billion, recorded last Friday.

The FBM KLCI opened 1.02 points lower at 1,576.23 and slid lower throughout the day to hit the intra-day low of 1,561.97 before ending slightly off low at 1,562.58. Chart-wise, the FBM KLCI formed a bearish long black candlestick which indicates heavy selling pressure on the benchmark index. With the bearish move yesterday, the FBM KLCI had broken the 30-day moving average (MA) support at 1,568 and the horizontal support at 1,566-point level; it is thus likely to continue with its downward move to test the immediate psychological support of 1,550-point level, which happens to be where the 60-day MA lies now. The 1,550-point level is also the 38.2% Fibonacci retracement level for the range from 1,474 to 1,597, hence, it is a critical level to be watched.

MACD continued to slide lower, indicating a continued weakening of the key index’s momentum. RSI (14) plunged lower to 43.2, indicating the FBM KLCI had officially turned bearish for the short term. Stochastic was lower at 33.7, indicating the continued weakening of market strength, and as it has not reach the short term oversold zone yet, the key index is likely to continue its current downtrend. Deteriorating technical readings indicates that the FBM KLCI is likely to extend its current correction.

The short term trend of the FBM KLCI is currently down, while its medium and long term uptrend is still intact. Looking at the current situation, the FBM KLCI is likely to test the medium term uptrend support provided by the 60-day MA at 1,550-point soon, if this level could not hold, then it is likely to slide towards the 120-day support at 1,535-point level, which is also the 50% Fibonacci retracement level.

Overnight, the Dow fell -94.57 points or -0.76% to close at 12,385.16. Today, the FBM KLCI is likely to trade within a range of 1,543 to 1,591.

This week's expected range: 1544 – 1606
Today’s expected range: 1543 – 1591

Resistance: 1572, 1582, 1591
Support: 1543, 1552, 1557

FBM KLCI - consolidation likely to extend

Stocks on Bursa Malaysia ended last week lower in quiet trading as investors stayed on the sidelines on concerns about the global economy. The downtrend was expected as global sentiment was not good amid US and Italian debt problems. The FBM KLCI fell 2.59 points or 0.16% to close at 1,577.25. Week-on-week, the barometer dropped 17.49 points or 1.10% to 1,577.25 from 1,594.74 points the previous Friday. Losers led advancers by 432 to 250, while 343 counters were unchanged. Daily turnover fell to 697.71 million shares valued at RM1.43 billion from 713.17 million shares valued at RM1.37 billion on Thursday, and weekly volume dwindled to 3.798 billion shares valued at RM7.22 billion from 4.66 billion shares valued at RM8.63 billion the previous week.

The FBM KLCI opened at 1,595.14 and charted another new record intra-day record high of 1,597.08, but heavy selling pressure due to profit-taking sent the key index 6.16 points lower to 1,588.58 on Monday, as foreign funds selling across the region in response to news of weak global development weighed down the local bourse. The FBM KLCI continued its downtrend on Tuesday and fell another 10.48 points to close at 1,578.10. The benchmark index rebounded on Wednesday in tandem with regional markets to close 2.57 points higher at 1,580.67. On Thursday, the key index staged a mild pullback in very quiet trading to close 0.83 point easier at 1,579.84, and the downtrend continued into Friday with the FBM KLCI losing another 2.59 points to end last week at 1,577.25

On the weekly chart, the FBM KLCI formed a bearish engulfing candlestick pattern which is a top reversal pattern and it indicates sellers were dominant throughout the week. With the appearance of the bearish engulfing pattern, the FBM KLCI is likely to continue its downward move this week to test the 10-week moving average (MA) support at 1,562. The critical support is at 1,538-point level provided by the 30-week MA. On the daily chart, the FBM KLCI formed a hammer candlestick pattern which indicates a possible temporary bottom, as the key index continued to close above the resistance turned support level of 1,577. The key index is currently closing below the 5 and 10-day MAs but was supported by the 20-day MA, and selling pressure exerted by the short term 5 and 10-day MA is likely to push the FBM KLCI lower to test the 30-day MA support at 1,568, if the current support level does not hold.

Weekly MACD has turned downward, indicating a loss in the weekly momentum, and nonetheless, it is still above the weekly signal line. Daily MACD, however, continued to slide lower and is below the daily signal line, indicating weakness is developing. Weekly RSI (14) was lower at 60.8 from 66.8 the previous week, indicating a continuous loss in the weekly relative strength. Daily RSI (14) was lower at 54.7, indicating the daily relative strength of the FBM KLCI has turned weak mildly bullish from mildly bullish. Weekly Stochastic is at 91.7, and has hooked downward to cross below the weekly slow stochastic line, indicating the possible beginning of a weekly down cycle. The high reading of 91.7 indicates it is still in the weekly overbought zone and there are lots of rooms for correction. Daily Stochastic continued its slide to 51.2, indicating the daily down cycle is still in continuation and has not reach the oversold zone yet. Deteriorating technical signals from the indicators showed that the current correction is likely to extend.

The short term trend of the FBM KLCI is down, and however, the medium and long term uptrend remained intact. Immediate downside support zone is at 1,573 to 1,566, if the 1,566 support level cannot hold, then there is a strong likelihood that the key index will slide towards the 1,550-point psychological support level, which happens to be where the 60-day MA is located currently. Overhead resistance zone is at 1,580 to 1,585.

Last Friday, the Dow rose +42.61 points or +0.34% to close at 12,479.73. This week, the FBM KLCI is likely to trade within a range of 1,544 to 1,606, and for today it is likely to trade within a range of 1,567 to 1,587.

This week's expected range: 1544 – 1606
Today’s expected range: 1567 – 1687

Resistance: 1580, 1584, 1587
Support: 1567, 1570, 1573

FBM KLCI - lower on profit taking

Stocks on Bursa Malaysia ended lower yesterday in very quiet trading as investors remained cautious over US economic developments and the ongoing European debt crisis. Investors were also adopting a wait-and-see attitude and anticipated more projects to be announced under the Economic Transformation Programme, before investing for the long term. The FBM KLCI closed 0.83 point easier at 1,579.84, after trading within a narrow range of between 1,577.76 and 1,581.69 throughout the day. Losers led advancers by 429 to 257, while 346 counters were unchanged. Turnover dwindled to 713.17 million shares, valued at RM1.37 billion, from 843.27 million shares, worth RM1.57 billion, recorded on Wednesday.

The FBM KLCI opened 0.61 point higher at 1,581.28 and moved to the intra-day high of 1,581.69 within the first forty minutes, and heavy profit-taking activity pressed the key index to the intra-day low of 1,577.76 before late bargain hunting on selected blue-chips lifted the index to close off low at 1,579.84. Chart-wise, the FBM KLCI formed a hangman-like candlestick in dark-cloud-cover position, which indicates selling activity had dominated the day, and the key index is likely to continue to consolidate in a range-bound manner. Immediate resistance lies at 1,585-point level.

MACD continued to slide lower and is below the signal line, indicating an increase in the downward momentum. RSI (14) hooked downward slightly to 57.2, reflecting the correction, and the relative strength remained in the mildly bullish zone. Stochastic was lower at 52.3, indicating a weakening market strength and the continuation of the short term down cycle. Readings from the indicators showed that the FBM KLCI is likely to continue with its consolidation process with a downward bias in the near term.

The short term trend of the FBM KLCI is down, while the medium and long term trend remained up. The benchmark index is likely to continue to consolidate within a trading range of 1,566 to 1,585 with a downward bias. Immediate overhead resistance zone is at 1,585 to 1,597, while the downside support zone is at 1,574 to 1,566. With the volume getting thinner, the consolidation process is likely to extend.

Overnight, the Dow fell -54.49 points or -0.44% to close at 12,437.12. Today, the FBM KLCI is likely to trade within a range of 1,573 to 1,586.

This week's expected range: 1565 – 1614
Today’s expected range: 1573 – 1586

Resistance: 1582, 1584, 1586
Support: 1573, 1575, 1577

FBM KLCI - technical rebound

Stocks on Bursa Malaysia staged a late rebound to close higher yesterday, tracking the bullish regional markets. News that the Italian government has managed to sell its bonds at relatively good prices helped boost the regional markets. Overall, the local market was still resilient as investors were still looking for a boost from major projects such as the mass rapid transit and the spending in the oil and gas sector. The FBM KLCI rose 2.57 points, or 0.16%, to close at 1,580.67. Advancers led losers by 389 to 306 while 327 counters were unchanged. Turnover rose to 843.27 million shares valued at RM1.57 billion from 832.79 million shares valued at RM1.55 on Tuesday.

The FBM KLCI opened 0.55 point higher at 1,578.65 and surged to the intra-day high of 1,580.75 within the first thirty minutes, and profit-taking immediately surfaced which pushed the key index to the intra-day low of 1,576.37, before late afternoon bargain hunting on selected heavyweights pushed the key index to close near the day’s high. Chart-wise, the FBM KLCI formed a small white hammer-like candlestick in Harami position, which indicates consolidation and mild rebound of the benchmark index after two days of heavy losses. The FBM KLCI may continue to move higher today, however, the resistances at 1,585 to 1,586 posts by the 5 and 10-day moving averages (MA) may prevent further up move.

MACD continued to slide lower, and had made a dead-cross over the signal line, giving out a sell signal for the FBM KLCI. However, as the MACD is still above the zero-line, the current weakness may just well be a temporary correction in an uptrend. RSI (14) gently hooked up to 57.9, reflecting the mild rebound yesterday, and the relative strength of the key index is currently mildly bullish. Stochastic, however, continued to slide lower to 60.3, indicating the short term down cycle is still in force, and the market strength is weakening. Readings from the indicators showed that the momentum of the FBM KLCI has weakened, and this may continue for a while during the consolidation process.

The short term trend of the FBM KLCI has turned downward, while the medium and long term trend still remained up. As the FBM KLCI is currently below the 5 and 10-day MAs but is still above the 20 and 30-day MAs, the key index is likely to consolidate itself within a trading range of 1,570 to 1,586. Immediate overhead resistance zone is at 1,586 to 1,597, while the downside support zone is at 1,574 to 1,567. The benchmark FBM KLCI is likely to continue to be range-bound, while rotational play will prevail among the second and third liners.

Overnight, the Dow rose +44.73 points or +0.36% to close at 12,491.61. Today, the FBM KLCI is likely to trade within a range of 1,573 to 1,586.

This week's expected range: 1565 – 1614
Today’s expected range: 1573 – 1586

Resistance: 1582, 1584, 1586
Support: 1573, 1575, 1577

FBM KLCI - correction continued

Stocks on Bursa Malaysia continued their downtrend at the close yesterday, tracking the weak performance of regional markets and Wall Street. Investors were worried about the Euro-zone debt crisis, with Italy expected to be the next country that may need a rescue package. The FBM KLCI fell 10.48 points, or 0.66%, to close at 1,578.10. Losers beat gainers by 602 to 167 while 288 counters were unchanged. A total of 832.79 million shares, valued at RM1.55 billion, were traded yesterday against 712.48 million shares worth RM1.293 billion on Monday.

The FBM KLCI opened 0.89 points lower at 1,587.69 and continued to slide lower throughout the day to touch the intra-day low of 1,574.52 before rebounding slightly to close off low at 1,578.10. Chart-wise, the FBM KLCI formed a bearish long black candlestick which indicates that sellers were dominant for the day. With this bearish move, the key index is likely to continue sliding lower to test the next lower support at 1,566.

MACD slid lower, indicating an increase in the downward momentum. RSI (14) was lower at 56.2, sliding from the bullish to the mildly bullish zone. Stochastic also slid lower to 74.5, breaking below the 80-level, indicating the beginning of a new short term down cycle. Readings from the indicators showed that the momentum and market strength of the FBM KLCI had already started to turn weak, which reflects the current correction, and the weakness is likely to continue in the near term.

The short term trend of the FBM KLCI has turned southward, as the key index has already closed below the short term 5 and 10-day moving averages (MA). And this short term downtrend is likely to continue with the FBM KLCI moving lower to test the 30-day MA support at 1,566. The medium and longer term uptrend, is however, still intact. Immediate support zone is at 1,574 to 1,566 while the resistance zone is at 1,580 to 1,597.

Overnight, the Dow fell -58.88 points or -0.47% to close at 12,446.88. Today, the FBM KLCI is likely to trade within a range of 1,559 to 1,601.

This week's expected range: 1565 – 1614
Today’s expected range: 1559 – 1601

Resistance: 1586, 1594, 1601
Support: 1559, 1566, 1572

FBM KLCI - appearance of top reversal candle pattern

Stocks on Bursa Malaysia ended lower yesterday as foreign funds selling across the region in response to news of weak global development weighed down the local bourse. The unexpected higher unemployment data in the US and worries that the Euro debt crisis was spreading to Italy, on top of Greece’s debt, kept investors away from the market. The FBM KLCI fell 6.16 points or 0.39% to 1,588.58, as most of the 30 counters of the key benchmark index traded lower on selling pressure. Market breadth was negative with losers outnumbering gainers by 460 to 237 while 304 counters were unchanged. A total of 712.48 million shares valued at RM1.293 billion were traded yesterday against 810.53 million shares worth RM1.57 billion last Friday.

The FBM KLCI opened 0.4 point higher at 1,595.14 and surged to another new record intra-day high of 1,597.08 within the first five minutes. Heavy selling pressure due to profit-taking immediately took over and pushed the benchmark index to the intra-day low of 1,584.20, losing 10.54 points at its worst before late bargain hunting lifted the key index to close off low at 1,588.58. Chart-wise, the FBM KLCI formed a bearish engulfing candlestick pattern which indicates sellers were dominant for the day, and is a top reversal pattern. The price action of the FBM KLCI yesterday merely confirmed the reversal signal issued by the hangman candlestick pattern formed on last Friday. With two consecutive days of top reversal pattern appearing, the FBM KLCI is thus expected to further correct itself. Immediate support zone is at 1,584 to 1,577-point level.

MACD has turned downward, but is still above the signal line, confirming the divergence signal mentioned yesterday. However, this merely indicates a short term pullback correction. RSI (14) dropped drastically to 66.6 from 74.1 the day before, indicating a big loss in the relative strength of the FBM KLCI, and nonetheless, it is still in the bullish zone. Stochastic has re-hooked downward to 86.6 from 93.9, and is below the slow stochastic line, reflecting the correction in the key index yesterday. Signals from the indicators showed that the upward momentum and market strength is taking a pause at the moment, but whether this is the beginning of a major downtrend will need more data to confirm.

The underlying short, medium and long term uptrend is still intact. However, the FBM KLCI has closed below the 5-day moving average (MA), and the 10-day MA is currently at 1,583.61. A close below the 10-day MA will confirm the short term downtrend, and will see the FBM KLCI correcting downward to the 1,566-point level. Immediate overhead resistance zone is at 1,597 to 1,600, while the immediate downside support zone is at 1,584 to 1,577.

Overnight, the Dow fell -151.44 points or -1.20% to close at 12,505.76. Today, the FBM KLCI is likely to trade within a range of 1,569 to 1,610.

This week's expected range: 1565 – 1614
Today’s expected range: 1569 – 1610

Resistance: 1596, 1603, 1610
Support: 1569, 1577, 1582

FBM KLCI - toppish look

Stocks on Bursa Malaysia ended mixed last Friday, but gains in key heavyweights like PETGAS and MISC pushed the benchmark FBM KLCI to close at another historic high. The market started higher in early trade as investors took the cue from the positive overnight performance on Wall Street, but later succumbed to profit-taking. However, late buying in selected heavyweights pushed the index to end at its peak. The FBM KLCI rose 4.5 points or 0.28% to close at 1,594.74, week-on week, it rose 11.8 points or 0.75% from previous Friday’s close of 1,582.94. Decliners led advancers by 390 to 287 while 366 were unchanged. Volume fell to 810.53 million shares worth RM1.57 billion from 1.27 billion shares worth RM2.07 billion on Thursday. Weekly volume rose to 4.66 billion shares valued at RM8.63 billion from the 4.52 billion shares valued at RM8.27 billion the previous week.

The FBM KLCI opened 1.18 points higher at 1,584.12 on last Monday and fell to the intra-week low of 1,577.81 before ending the day 0.59 points lower at 1,582.35. On Tuesday, the FBM KLCI basically traded in a narrow range to close 0.5 of a point lower at 1,581.85. The benchmark index staged a breakout on Wednesday from its consolidation to close 9.49 points higher at its new historic peak of 1,591.34 on strong buying interest in blue-chips. The key index ran into profit-taking mode on Thursday after touching the historical intra-day high of 1,595.87 to settle the day 1.1 points lower at 1,590.24. And on Friday, the FBM KLCI was basically in correction mode for a major part of the day, but last minute gain in selected heavyweights artificially pushed the benchmark index to another record close of 1,594.74.

On the weekly chart, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control for the week, and the barometer may likely to continue its upward climb to test the 1,600-point psychological level. On the contrary, the daily chart, despite the benchmark index closing at record high level, the FBM KLCI formed a hanging-man candlestick, which is a bearish top reversal candle pattern. This bearish daily candlestick pattern actually reflects heavy selling pressure despite the last minute cover up action on the key index, and hence there is a high likely hood that the FBM KLCI may not be able to sustain at this high level, and a correction is imminent.

Weekly and daily MACD continued to climb higher, indicating a continuation in the weekly and daily upward momentum. However, the daily histogram did not gain much, and was almost flat over the last three sessions, giving out a possible divergence signal. Weekly RSI (14) continued its up thrust to 66.8, indicating the weekly relative strength is in a bullish state. Daily RSI (14) has re-hooked up and is at 74.1, climbing further into the short term overbought zone. Weekly Stochastic is higher at 98.3, but shows sign of tapering off. Daily Stochastic is at 93.9, has turned upward and crossed above the slow stochastic, indicating the key index’s strength has reversed upward after a few sessions of consolidation. Readings from the indicators showed that the benchmark FBM KLCI is currently very bullish; however, as most indicators are already at the overbought zone, a pullback correction is likely to happen.

The underlying uptrend of the FBM KLCI remained intact, and the market barometer is likely to test the 1,600-point psychological level anytime this week before a major correction takes place. Immediate resistance level is envisage at the 1,600-point level, while the downside support zone is at 1,585 to 1,577. Judging from the volume, the overall market is likely to remain sluggish with rotational play on some second and third liner.

Last Friday, the Dow fell -62.29 points or -0.49% to close at 12,657.20. This week, the FBM KLCI is likely to trade within a range of 1,565 to 1,614, and for today it is likely to trade within a range of 1,578 to 1,605.

This week's expected range: 1565 – 1614
Today’s expected range: 1578 – 1605

Resistance: 1598, 1602, 1605
Support: 1578, 1581, 1588

FBM KLCI - marginally lower on profit-taking

Stocks on Bursa Malaysia ended mixed yesterday on profit-taking despite recording fresh intra-day high in early trade. The market was unable to sustain its positive momentum as profit-taking started to set in among key blue chips. The FBM KLCI fell 1.1 points or 0.07% to 1,590.24. Advancers led decliners by 368 to 355 while 355 counters closed unchanged. Volume rose to 1.27 billion shares worth RM2.07 billion from 1.11 billion shares worth RM2.15 billion on Wednesday.

The FBM KLCI opened with an up gap of 2.31 points at 1,594.13 and surged to the intra-day high of 1,595.87, a new record high, within the first ten minutes, and heavy profit-taking activity immediately set in which pressed the key index continuously lower to hit the intra-day low of 1,587.88 before rebounding slightly to close off low at 1,590.24. Chart-wise, the FBM KLCI formed a dark-cloud-cover candlestick pattern which indicates profit-taking and distribution by the bears. The key index is likely to take a breather to correct or consolidate itself after rising to a new high. Immediate key support levels for the FBM KLCI are envisaged at 1,580, 1,577 and 1,566.

MACD was higher, but its histogram was shorter, reflecting the correction that the key index is currently undergoing. The momentum, however, remained positive. RSI (14) hooked downward to 71.99 from 73.4 a day earlier after entering the technical short term overbought zone. Nonetheless, the key index is still in the very bullish zone. Stochastic has turned upward, but is still below its slow stochastic line, indicating the correction may not be over yet. Readings from the indicators showed that the FBM KLCI is undergoing a pullback correction, however, the underlying strength and momentum is still positive.

The underlying uptrend of the FBM KLCI remained intact as the key index continued to stay above all the short, medium and long term moving averages. The correction yesterday is considered a healthy one after the FBM KLCI rose to a new level. Immediate target level for the FBM KLCI would be the 1,600-point psychological level which is likely to be tested after the current correction is over. As the volume is improving, active rotational play among the second and third liners is likely continue, while the key index may consolidate itself.

Overnight, the Dow rose +93.47 points or +0.74% to close at 12,719.49. Today, the FBM KLCI is likely to trade within a range of 1,578 to 1,604

This week's expected range: 1545 – 1606
Today’s expected range: 1578 – 1604

Resistance: 1595, 1599, 1604
Support: 1578, 1583, 1586

Stocks to watch: IVORY, PERWAJA, WCT

FBM KLCI - marching towards 1,600

Stocks on Bursa Malaysia closed broadly higher yesterday with the key benchmark FBM KLCI hitting an all-time high. Most blue-chips regained ground with investors upbeat over the country’s economy. Investors were encouraged by the positive economic news flow from the six Strategic Reform Initiatives announced by the government the day before to boost Malaysia’s competitiveness. The benchmark FBM KLCI ended 9.49 points or 0.6% higher at its peak of 1,591.34. Advancer led decliners by 453 to 287 while 342 counters closed unchanged. A total of 1.11 billion shares, worth RM2.15 billion, were traded against Tuesday’s 728.65 million shares, valued at RM1.463 billion.

The FBM KLCI opened 0.36 point higher at 1,582.21 and fell on mild profit-taking to touch the intra-day low of 1,580.46 within the first ten minutes. The key index rebounded and moved into the positive territory and ascended higher for the rest of the day to close at another new historic peak of 1,591.34. Chart-wise, the FBM KLCI formed a bullish white candlestick without upper shadow which indicates the bulls were in control for the day, and is likely to continue charging forward to test the 1,600-point psychological resistance level.

MACD has again pickup to climb higher, indicating a resumption of the upward momentum. RSI (14) has hooked upward to 73.4 after retreating for two days, indicating the relative strength of the key index has turned very bullish and the entering into the short term overbought zone. Stochastic was just marginally lower and is turning flat, indicating a slow down of the recent downward corrective strength. Readings from the indicators showed that the FBM KLCI has again turned bullish after two days of consolidation, and is likely to continue its journey into the uncharted territory.

The FBM KLCI is currently closing above all its short, medium and long term moving averages, and is thus in a very bullish state. Immediate overhead resistance is at the 1,600-point psychological level, while the downside support zone is at 1,580 to 1,577. With the volume again pick up to above 1 billion shares, the overall market is likely to see more rotational play among the second and third liners while the benchmark bellwether continue its journey into the unknown territory.

Overnight, the Dow rose +56.15 points or +0.45% to close at 12,626.02. Today, the FBM KLCI is likely to trade within a range of 1,573 to 1,603

This week's expected range: 1545 – 1606
Today’s expected range: 1573 – 1603

Resistance: 1595, 1599, 1603
Support: 1573, 1576, 1584

FBM KLCI - in consolidation

Stocks on ended lower yesterday due to selling in heavyweights after the recent highs, coupled with a lack of fresh leads. Investors took cue from the weak trading across regional markets on renewed fears over the Euro-zone sovereign debt especially Greece, while Wall Street overnight was closed for the Independence Day holiday. The FBM KLCI fell 0.5 of a point or 0.03% to 1,581.85. Market breadth was negative with losers leading gainers 386 to 319 while 330 counters were unchanged. A total of 728.65 million shares valued at RM1.463 billion were traded against 728.68 million shares worth RM1.377 billion on Monday.

The FBM KLCI opened 1.6 points higher at 1,583.95 and surged to the intra-day high of 1,584.83 within the first five minutes. Profit-taking activity which emerged sent the key index into the negative territory and the index was just moving in a tight range before closing marginally lower in the red. Chart-wise, the FBM KLCI formed a small black spinning-top candlestick which indicates consolidation and indecision of the index’s direction. With two black spinning-top candlesticks appearing at this high level, it showed that the key index was cautious in making further up move and may further correct itself.

MACD was marginally higher but was tapering off, while the histogram starts to turn shorter, giving out a first signal that the upward momentum is slowing down. RSI (14) is marginally lower at 68.55, reflecting the minor correction, but is still in the bullish zone. Stochastic continued to slide lower to 87.1, as stochastic is still holding above the 80- level, the current weakness may just be a short term correction. Readings from the indicators showed that the upward momentum of the FBM KLCI is slowing down and the key index is likely to further consolidate itself.

The underlying short, medium and long term uptrend of the FBM KLCI remained intact. Immediate overhead resistance zone is at 1,585 to 1,590, while the downside support zone is at 1,577 to 1,566. As the overall market volume continued to remain sluggish, the FBM KLCI is likely to remain in range-bound while rotational play prevails among the second and third liners.

Overnight, the Dow fell a marginal -12.90 points or -0.10% to close at 12,569.87. Today, the FBM KLCI is likely to trade within a range of 1,575 to 1,590

This week's expected range: 1545 – 1606
Today’s expected range: 1575 – 1590

Resistance: 1585, 1587, 1590
Support: 1575, 1577, 1579

Stocks to watch: KBB

FBM KLCI - taking a breather

Stocks on Bursa Malaysia ended marginally lower yesterday on late profit-taking activities with the FBM KLCI finishing 0.59 points lower at 1,582.35. The key benchmark index touched an all time intra-day high of 1,589.93 in the morning session but was unable to sustain the momentum due to lack of follow-through support. The market failed to take the cue from regional markets amid scattered participation by foreign fund managers. Decliners led advancers by 453 to 333 while 304 counters closed unchanged. Turnover declined to 728.860 million shares valued at RM1.377 billion from 801.954 million shares valued at RM1.4 billion on last Friday.

The FBM KLCI opened 1.18 points higher at 1,584.12 and fell to the intra-day low of 1,577.81 within the first ten minutes. The key index then rebounded strongly and rallied to touch an all time intra-day high of 1,589.93 at mid morning. The key index slipped lower from the intra-day high on active profit-taking activities to end the day in the red. Chart-wise, the FBM KLCI formed a black high-wave spinning-top candlestick which indicates high volatility in trading and indecision of market direction, and the bears were having a slight upper hand. The appearance of spinning-top candlestick at this level gives an early signal that the market may take a pause to consolidate itself before moving ahead to test the 1,600-point psychological target.

MACD continued to rise higher, indicating a continuation of the upward momentum. RSI (14) hooked downward marginally to 69.2, reflecting the mild correction, but is still in the bullish zone. Stochastic was lower at 93.5 and crossed below the slow stochastic line, reflecting the mild pullback in the key index, and nevertheless, the market strength is still strong. Readings from the indicators showed that the FBM KLCI is still bullish but is undergoing a pullback correction.

The underlying short, medium and long term trend of the FBM KLCI remained up. Immediate strong overhead resistance zone is envisaged at 1,590 to 1,600, while the downside support zone is at 1,570 to 1,560. Judging from the dwindling volume, the FBM KLCI is likely to move into consolidation mode over the next few days before the July 9th Bersih Rally.

The US market was closed yesterday for their Independence Day holiday. Today, the FBM KLCI is likely to trade within a range of 1,564 to 1,602

This week's expected range: 1545 – 1606
Today’s expected range: 1564 – 1602

Resistance: 1589, 1596, 1602
Support: 1564, 1571, 1576

FBM KLCI - into the uncharted territory

Stocks on Bursa Malaysia ended on a mixed note last Friday in a market that was generally dominated by rotational play. The bellwether FBM KLCI, however, finished last week at another new historic high level of 1,582.94. The stronger close on Wall Street overnight gave Bursa a positive lead and more good news from Greece also supported sentiment. The market barometer, which slipped into negative territory to a low of 1,576.89 and stayed in red most of the time after opening 1.76 points higher at 1,580.83, recovered at the last minute to end 3.87 points, or 0.24%, at 1,582.94. Week-on-week, the key index gain 18.28 points, or 1.17% from previous Friday’s close of 1,564.66. Decliners led advancers by 388 to 352 while 317 were unchanged. Daily volume dropped to 801.954 million shares valued at RM1.4 billion from 947.614 million shares valued at RM1.814 billion on Thursday, and weekly turnover declined to 4.517 billion shares valued at RM8.266 billion from last week's 4.602 billion shares valued at RM7.637 billion.

Taking cue from the poor performance of Wall Street on the previous Friday, the FBM KLCI opened last Monday with a down gap of 3.34 points at 1,561.32 and hit the intra-week low of 1,560.32 before rebounding to close at 1,562.52, losing 2.14 points on Monday. The FBM KLCI rebounded on Tuesday to end 7.5 points higher at 1,570.02, boosted by gains in selected finance blue chips and newly-listed MSM Holdings' encouraging performance. The FBM KLCI continued to rise on Wednesday to close 4.99 points higher at 1,575.01, helped by gains in selected blue chips, month-end window-dressing and portfolio tweaking by hedge fund managers ahead of their first-half earnings reports. On Thursday, 30th June, the benchmark FBM KLCI ended with a gain of 4.06 points at its historic high of 1,579.07 with most heavyweight counters posting gains on steady buying amid mid-year window dressing. And on Friday, the market barometer continued its upward momentum to close at another new historic high level of 1,582.94 after slipping into the negative territory for a major part of the day.

On the weekly chart, the FBM KLCI formed a bullish Marubozu candlestick, which indicates the bulls were in total control for the week in pushing the key index higher. The key index is likely to continue scaling new high this week. However, the appearance of a bullish Marubozu at high level like this may not be a good sign, and it can mean pushing up for distribution. Hence, some form of profit-taking pullback is expected this week. On the daily chart, despite closing at historical high level, the FBM KLCI formed a bearish hanging-man candlestick, which is a top reversal signal, and the benchmark index is likely to face some profit-taking selling pressure after running up continuously for four days. The FBM KLCI is likely to continue its upward momentum making its way towards the short term target of 1,600-point level.

Weekly MACD continued to climb higher after making a golden-cross last week, indicating the weekly momentum has turned positive after almost half a year of consolidation. Daily MACD continued to surge higher, indicating a continuation of the daily upward momentum. Weekly RSI (14) was higher at 64.6, indicating the weekly relative strength has turned bullish. Daily RSI (14) was also higher at 69.8, approaching the short term overbought level of 70. Weekly Stochastic continued to climb higher to 97.6, indicating the weekly market strength is very strong and continuation of the weekly up cycle. Daily Stochastic is at 99.2, and is tapering off, indicating the key index was very much short term overbought, and a pullback is expected soon. Readings from both the weekly and daily indicators showed that the benchmark FBM KLCI is currently bullish with a strong upward momentum, however, as both daily RSI and stochastic is at the short term overbought level, some pullback is expected soon.

The underlying short, medium and long term trend of the FBM KLCI is currently up, with the key index at its historical high level in the uncharted territory. The FBM KLCI is likely to continue charting new high in the short term. Immediate overhead resistance zone is at 1,585 to 1,600 point-level, while the immediate downside support zone is at 1,570 to 1,560 point-level. As the FBM KLCI has already turned bullish on the weekly chart, any pullback should be viewed as an opportunity to buy into weakness for quality stocks.

Last Friday, the Dow rose +168.43 points or +1.36% to close at 12,582.77. This week, the FBM KLCI is likely to trade within a range of 1,545 to 1,606, and for today it is likely to trade within a range of 1,572 to 1,589.

This week's expected range: 1545 – 1606
Today’s expected range: 1572 – 1589

Resistance: 1585, 1587, 1589
Support: 1572, 1574, 1578

FBM KLCI - new historic high

The benchmark FBM KLCI ended yesterday with a gain of 4.06 points or 0.26% at its historic high of 1,579.07 with most heavyweight counters posting gains on steady buying amid mid-year window dressing and rising commodity prices. The general market, however, ended mixed yesterday as investors stayed cautious on lingering concerns about the Greek debt problem. Advancers led decliners by 399 to 325 while 329 were unchanged. Volume decreased to 947.614 million shares valued at RM1.814 billion from Wednesday’s 1.044 billion shares valued at RM1.796 billion.

The FBM KLCI opened 3.34 points lower at 1,571.67 and touched the intra-day low of 1,570.69 briefly after opening. The key index was trading in the negative territory but on a gradual intra-day uptrend for a major part of the day. However, buying interest on key heavyweights which surfaced in late afternoon has helped the benchmark FBM KLCI to end the day at historic high of 1,579.07. Chart-wise, the FBM KLCI formed a bullish engulfing candlestick which indicates buyers were in control for the day, and the key index is likely to continue marching forward into the uncharted territory targeting the 1,600-point level. However, heavy profit-taking activity is likely to take place which might capped the immediate upside of the benchmark index.

MACD continued to move higher, indicating a continued increase in the key index’s momentum. RSI (14) was higher at 67.9, indicating the relative strength of the key index is getting more bullish. Stochastic was higher at 99.2, which indicates very strong market strength, but is short term overbought, and a pullback is expected soon. Readings from the indicators showed that the FBM KLCI is currently in a bullish state, and might continue its upward momentum to scale new high.

The underlying uptrend of the FBM KLCI remained intact. Immediate overhead resistance is expected at 1,582, 1,585 and 1,588 and the immediate downside support zone is at 1,570 to 1,566. Even though the benchmark index has charted new historic high, but the overall market doesn’t seem to follow, as can be seen from the lackluster trading volume. Nevertheless, the general market will continue to see rotational play on the second and third liners as the FBM KLCI continue to move forward.

Overnight, the Dow rose +152.92 points or +1.25% to close at 12,414.34. Today, the FBM KLCI is likely to trade within a range of 1,565 to 1,588.

This week's expected range: 1540 – 1588
Today’s expected range: 1565 – 1588

Resistance: 1582, 1585, 1588
Support: 1565, 1567, 1573

Stocks to watch: TCHONG, TAMBUN, CHHB, KURASIA, LIONDIV