FBM KLCI - bearish outlook

Stocks on Bursa Malaysia fell on persistent selling across the board in cautious trade last Friday, ahead of the long holidays this week and US Federal Reserve chairman Ben Bernanke's speech. On the domestic front, corporate earnings have not been attractive, continuing to slide, with both big and small caps sharing the disappointments and downgrades. The FBM KLCI fell 19.93 points or 1.36% to 1,444.81, after opening 4.44 points lower at 1,460.3, and week-on-week, it eased 39.17 points to 1,444.81 from 1,483.98 previously. Decliners outnumbered advancers by 640 to 168 while 228 counters were unchanged. Volume rose to 966.739 million shares worth RM2.266 billion from 833.92 million shares worth RM2.022 billion traded on Thursday, while total weekly volume decreased to 4.512 billion shares worth RM9.577 billion from 5.067 billion shares valued at RM8.921 billion previously.

The FBM KLCI started last week on a weak note, it opened with a down gap of 6.65 points at 1,477.33 and slid lower to close at 1,472.16 on Monday. The key index rebounded 10.21 points to 1,482.37on Tuesday with sentiments largely lifted by better-than-expected manufacturing activity data from China. On Wednesday, the FBM KLCI dipped 13.22 points to 1,469.15 in a knee-jerk reaction after Moody's cut Japan's credit rating. The benchmark index fell 4.41 points to 1,464.74 on Thursday, bucking regional trend, led by finance stocks and on selling pressure as global economic growth outlook dampened investor sentiment. The FBM KLCI continued its decline into Friday to close the week at 1,444.81 after hitting the intra-week low of 1,442.08.

On the weekly chart, the FBM KLCI formed a bearish black candlestick which indicates heavy selling pressure throughout the week. And now, the key index had closed below the psychological support level of 1,450-point which coincides with the 80-week moving average (MA), hence, there is a strong likelihood that the FBM KLCI may slide lower to re-test the support of the recent low at 1,423 and the 23% Fibonacci retracement level of 1,410 which coincides with the 100-week MA.

On the daily chart, the FBM KLCI formed a bearish black candlestick with a down gap which indicates panic selling and liquidation of selected blue-chip stocks which dragged down the key index. The key index pierced through the 360-day MA and slid all the way to hit the intra-day low of 1,442.08 before rebounding mildly to close off low. As the FBM KLCI has closed below the 360-day MA, it has turned long term bearish, and more downsides are expected ahead. The possible downside targets are the 23.6% Fibonacci retracement level at 1,410, follows by the 38.2% Fibonacci retracement level at 1,293, both measuring from the pivot low of 801 to the pivot high of 1,597.

Weekly MACD had just crossed below the zero-line, sending out an official bearish signal on the weekly chart, and daily MACD also continued to slide lower, indicating an acceleration of the bearish momentum. Weekly RSI (14) plunged lower to 32, while daily RSI (14) was lower at 25.7, and both indicate the relative strength of the FBM KLCI is very bearish. Weekly Stochastic slipped lower to 27.3, and daily Stochastic also slide lower to 37.9, both readings indicates the down cycle is still in continuation. Readings from both the weekly and daily indicators showed a very bearish scenario for the FBM KLCI, and the current consolidation process may continue until there are signs of reversal.

The trend of the FBM KLCI has turned long term bearish, and one can expect more downsides to come. Last Friday, Wall Street's Dow Jones Industrial Average rose by 134.72 points, or 1.21%, to end the week at 11,284.54, after it was reported in the much awaited speech by Federal Reserve Chairman Ben S. Bernanke, that the US economy was not deteriorating fast to warrant an additional stimulus. As such, the FBM KLCI is likely to reverse some of its losses in the holiday shortened trading week today. Bursa Malaysia will be closed from Tuesday to Thursday for Hari Raya and the National Day celebrations, if Hari Raya falls on Tuesday. Today’s trading will only be for a half day. To all our Muslim readers, we wish you “Selamat Hari Raya Aidilfitri, Maaf Zahir dan Batin” and to our non-Muslim readers, we wish you a happy holiday, and please drive carefully.

This week's expected range: 1423 – 1474
Today’s expected range: 1430 – 1467

Resistance: 1450, 1456, 1467
Support: 1430, 1437, 1440

FBM KLCI - lower on continued selling pressure

Stocks on Bursa Malaysia finished lower yesterday, bucking regional trend, led by finance stocks and on selling pressure as global economic growth outlook dampened investor sentiment. Finance stocks came under selling pressure due to the global economic headwinds and their potential negative impact on the asset quality. The local market was in consolidation mode despite steadier regional markets in line with Wall Street’s gain overnight. The FBM KLCI fell 4.41 points, or 0.3%, to 1,464.74. Losers overwhelmed gainers by 429 to 240 while 311 counters closed unchanged. Volume fell to 833.92 million shares worth RM2.022 billion from Wednesday’s 892.352 million shares worth RM1.857 billion.

The FBM KLCI opened 1.22 points higher at 1,470.37 and touched the intra-day high of 1,471.03 within the first five minutes after opening. Selling pressure emerged and pressed the key index lower to hit intra-day low of 1,460.96 before rebounding to close off low at 1,464.74. Chart-wise, the FBM KLCI formed a bearish black candlestick which indicates the bears continued to dominate the day. The key index had pierced through the 23% Fibonacci retracement support level at 1,464 but managed to climb back above the level. However, in view of the continued selling pressure ahead of the long holiday next week, the FBM KLCI is likely to slip further downward to test the support zone of 1,459 to 1,450. A break below the psychological support level at 1,450 will likely see the key index falling lower to re-test the 1,423-point support level.

MACD continued to slide lower, indicating a continued increased of the bearish downward momentum. RSI (14) slid lower to 30.2, indicating a continued weakening of the relative strength, and the key index is moving into the very bearish zone. Stochastic has however, hooked up to 44.5, giving out an opposite signal. Readings from the indicators showed that the FBM KLCI is currently very weak and bearish, and is likely to further consolidate.

The trend of the FBM KLCI remained down and bearish. Immediate critical support is at 1,459 provided by the 360-day moving average follow by the psychological support level of 1,450-point level. If these levels could not hold, then the FBM KLCI would turned long term bearish and there will be more downside to come, and possible targets are the 23.6% Fibonacci retracement level at 1,410, follow by the 38.2% Fibonacci retracement level at 1,293, measuring from the pivot low of 801 to the pivot high of 1,597.

Overnight, the Dow fell -170.89 points or -1.51% to close at 11,149.82. Today, the FBM KLCI is likely to trade within a range of 1,450 to 1,481.

This week's expected range: 1438 – 1524
Today’s expected range: 1450 – 1481

Resistance: 1470, 1476, 1481
Support: 1450, 1455, 1460

FBM KLCI - bearish outlook

Stocks on Bursa Malaysia finished broadly lower yesterday in tandem with other regional markets, which also witnessed earlier gains wiped off in a knee-jerk reaction after Moody's cut Japan's credit rating. The market fell abruptly as investors realised that the downgrade will have a negative effect on the rest of Asia. The FBM KLCI dipped 13.22 points, or 0.89%, to 1,469.15, way off the day's high of 1,487.27, which was spurred by overnight gains on Wall Street on speculation of a stimulus plan to boost the US' faltering growth. Decliners outnumbered advancers by 528 to 209 while 924 counters were unchanged. A total of 892.35 million shares worth RM1.86 billion were traded yesterday, up from 875.52 million shares valued at RM1.76 billion traded on Tuesday.

Taking cue from the strong gain on Wall Street overnight, the FBM KLCI opened 2.78 points higher at 1,485.15, but encountered profit-taking activity which pushed it into the negative territory briefly, and the key recovered gradually to touch the intra-day high of 1,487.27 near noon. On the opening bell of the afternoon session, the FBM KLCI started to plunge lower in tandem with other regional markets to close at the lowest point of the day. Chart-wise, the FBM KLCI formed a bearish engulfing candlestick which indicates the bears were in control of the day. The appearance of this bearish reversal candlestick pattern after a rebound indicates the market is still jittery, and the key index is likely to move lower to test the support at 1,464, 1,458 and 1,450-point levels. If these immediate support levels could not hold, then the FBM KLCI is likely to re-visit the recent low of 1,423.

MACD again turned downward, indicating a pick up in the bearish momentum. RSI (14) re-hooked downward to 31.3, indicating a loss in the relative strength, and is still in the bearish zone. Stochastic continued to slide lower to 41.9, indicating a continued loss in the market strength and the down cycle is in continuation. Readings from the indicators showed a bearish outlook for the FBM KLCI, and more weaknesses is expected ahead.

The trend of the FBM KLCI remained down and the outlook is bearish. Immediate downside support zone is at 1,467 to 1,450, with 1,458 being the long term 360-day moving average support level. If this level could not hold, then the FBM KLCI would turned long term bearish and there will be more downside to come, and a possible target is 1,410, the 23.6% Fibonacci retracement level measuring from the pivot low of 801 to the pivot high of 1,597.

Overnight, the Dow rose another +143.95 points or +1.29% to close at 11,320.71. Today, the FBM KLCI is likely to trade within a range of 1,444 to 1,505.

This week's expected range: 1438 – 1524
Today’s expected range: 1444 – 1505

Resistance: 1481, 1493, 1505
Support: 1444, 1457, 1463

FBM KLCI - a technical rebound

Stocks on Bursa Malaysia ended firmer yesterday on bargain-hunting activities, with sentiments largely lifted by better-than-expected manufacturing activity data from China, which averted fears of a hard landing of the world's second largest economy. The outlook remained volatile given the persistent worries over a global recession and ongoing Euro-zone jitters. The FBM KLCI rose 10.21 points or 0.69% to 1,482.37, after touching an intra-morning low of 1,469.66. Advancers outnumbered decliners by 488 to 274 while 256 counters were unchanged. A total of 875.521 million shares worth RM1.762 billion were traded, up from 853.772 million shares valued at RM1.672 billion traded on Monday.

The FBM KLCI opened 2.20 points higher at 1,474.36 and moved lower on profit-taking activity to hit the intra-day low of 1,469.66 at mid morning. It then rebounded and gradually climbed higher to close at the day’s highest level. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were making a counter-attack after being beaten down over the last three sessions, and the key index is likely to continue with its rebound to move higher today. Immediate strong overhead resistance zone is anticipated at 1,487 to 1,497, posted by the moving average (MA) cluster and the gap that formed on August 19. In order to reverse the current downtrend, the FBM KLCI will have to close above the 1,510-point level over the next few sessions; otherwise, any up move is considered as only a rebound in a bearish downtrend.

MACD hooked upward gently and its histogram also turned shorter, reflecting the rebound. Nevertheless, MACD is still below the signal-line as well as the zero-line, indicating a still bearish scenario. RSI (14) has hooked upward to 34.9 from 29 previously, moving out from the very bearish zone to the bearish zone. Stochastic continued to slide lower to 42.6, indicating the short term down cycle is still in force. Readings from the indicators showed that the FBM KLCI is still currently bearish with weak momentum, and may continue to stay range-bound until positive signals appeared.

The trend of the FBM KLCI remained down. However, the very long term trend as indicated by the 360-day MA is still up. If the support by the very long term 360-day MA, currently at 1,458, is violated, then another major down move to 1,400-point level can be expected.

Overnight, the Dow rose +322.11 points or +2.97% to close at 11,176.76. Today, the FBM KLCI is likely to trade within a range of 1,461 to 1,496.

This week's expected range: 1438 – 1524
Today’s expected range: 1461 – 1496

Resistance: 1487, 1491, 1496
Support: 1461, 1465, 1473

Stocks to watch: DIGISTA, PERDANA

FBM KLCI - lower on continued selling pressure

Stocks on Bursa Malaysia closed broadly lower yesterday with losses led by key index-linked counters, such as PCHEM and CIMB, as investors remained jittery on the outlook. The FBM KLCI dropped 11.82 points, or 0.79%, to 1,472.16, after opening 6.65 points lower at 1,477.33. Losers outstripped gainers by 580 to 207 with 253 counters unchanged. A total of 853.772 million shares worth RM1.672 billion were traded, down from 958.9 million shares valued at RM2.19 billion traded last Friday.

The FBM KLCI opened with a down gap of 6.65 points at 1,477.33 and slipped lower with mild rebound that touched the intra-day high of 1,478.91. The key index succumbed to continued selling pressure and hit the intra-day low of 1,467.42 before rebounding to close off low at 1,472.16 on mild bargain-hunting activity. Chart-wise, the FBM KLCI formed a bearish black candlestick which indicates sellers continued to dominate the market, as the key index continued to close below the mid point of the day. The FBM KLCI is now closing just below the critical support of 1,474-point, and a continue close below this level will likely see the key index sliding lower towards the next lower support level of 1,464-point, the 23.6% Fibonacci retracement level measuring from the pivot high of 1,597 to the pivot low of 1,423.

MACD continued to slide lower, indicating an increase in the bearish downward momentum. RSI (14) is at 29, and has again slipped lower into the very bearish zone and is short term oversold. Stochastic is at 47.2 and has crossed below its slow stochastic line, marking an end of the rebound rally, and the beginning of another down cycle. Readings from the indicators showed that the FBM KLCI continued to remain bearish, and the consolidation may extend until there are signs of bottoming out.

The FBM KLCI continued to remain in a bearish downtrend with no sign of bottom yet. Its trend will continue to be influenced by the development of external factors and will move in tandem with regional markets. Immediate downside support levels lies at 1,464, 1,457 and 1,450. If these levels could not hold, then the FBM KLCI is likely to re-visit its recent low of 1,423.

Overnight, the Dow rose +37.00 points or +0.34% to close at 10,854.65. Today, the FBM KLCI is likely to trade within a range of 1,455 to 1,490.

This week's expected range: 1438 – 1524
Today’s expected range: 1455 – 1490

Resistance: 1479, 1485, 1490
Support: 1455, 1461, 1466

FBM KLCI - further downside pressure

Stocks on Bursa Malaysia closed lower across the board last Friday on persistent selling pressure in tandem with weak regional markets, following the plunge on Wall Street overnight amid growing concerns that the global economic recovery is faltering and the European debt debacle may degenerate into a major crisis. The FBM KLCI ended 19.32 points, or 1.29%, lower at 1,483.98. Week-on-week, the benchmark index gained 0.31 of a point from 1,483.67 previously. Losers overwhelmed gainers by 677 to 127 while 231 counters were unchanged. Volume rose to 958.9 million shares valued at RM2.19 billion from 850.55 million shares valued at RM1.71 billion on Thursday, while total weekly volume decreased to 5.067 billion units worth RM8.921 billion from 7.776 billion units valued at RM14.682 billion previously.

The FBM KLCI started last Monday on a stronger footing by opening 2.37 points higher at 1,486.04 and climb higher throughout the day to end the day 16.07 points at 1,499.74. The benchmark index continued its upward momentum on Tuesday morning to hit the intra-week high of 1,510.54 before easing on profit-taking to close 1.5 points lower at 1,498.24. On Wednesday, The FBM KLCI opened 3.97 points higher at 1,502.21 and moved in sideways trend for most part of the day, within a tight range of 1,499.59 to 1,504.63 in the positive zone before ending 4.83 points higher to 1,503.07. The key index eked out a small gain of 0.23 of a point to 1,503.30 on Thursday following a weak regional market, and on Friday, the benchmark FBM KLCI plunged 19.32 points to close the week at 1,483.98.

On the weekly chart, the FBM KLCI formed a black inverted hammer candlestick which indicates the bulls initially tried to push up the key index, but later in week, the bears appeared to press down the index. As the FBM KLCI continued to close below the 60-week moving average (MA), together with the black inverted hammer candlestick, it is likely that the key index will continue its downward move to test the immediate support level of 1,474, and the psychological support level of 1,450, which happen to mirrors the 80-week MA. If the 1,450-point support level could not hold, then the key index will move lower to re-visit the recent low of 1,423. The likely downside target is the 23.6% Fibonacci retracement level at 1,410-point, measuring from the pivot low of 801 to the pivot high of 1,597, and this level also coincided with the 100-week MA which shall serve as a strong support level.

On the daily chart, the FBM KLCI opened with a down gap of 11.63 points and slid to the intra-day low of 1,477.70 before rebounding to close at 1,483.98, forming a bearish black candlestick which closed just below the mid point of the day’s range. This suggests the selling pressure was strong, and the key index is likely to continue sliding lower today. A critical support level to watch is the 1,474-point level, and the 23.6% Fibonacci retracement level at 1,464-point level, measuring from the pivot high of 1,597 to the pivot low of 1,423, may also serve as an immediate support. As the key index is now closing below the 300-day MA, it is likely that the FBM KLCI will move lower to test the support of the 360-day MA at 1,457-point if the other two support levels could not hold.

Weekly MACD continued to slide lower, indicating an increase in the weekly downward momentum. Daily MACD has hooked downward after turning upward for four days, marking an end to the technical rebound. Weekly RSI (14) hooked up marginally to 38.3, reflecting the weak rebound, and is currently in the bearish zone. Daily RSI (14) turned downward to 32.1, indicating the daily relative strength is bearish. Weekly Stochastic continued to slide lower to 31.5, indicating a continuation of the weekly down cycle and weakness. Daily stochastic has hooked downward for the first time after rising for almost eight sessions, indicating a possible end of the rebound rally. Readings from the indicators showed that weakness and bearishness of the FBM KLCI still prevails, and the current downtrend may prolong.

The FBM KLCI already entered a bear phase as the key index continued to stay below the long term 200, 240 and 300-day MAs. With the external negative factors continue to unfold the benchmark index is likely to further consolidate. Hence, it is advisable to stay at the sidelines until a clearer picture emerges before taking any position. Any near term rallies should be viewed as an opportunity to reduce exposure pending a more substantial downward correction.

Last Friday, the Dow fell -172.93 points or -1.57% to close at 10,817.65. This week, the FBM KLCI is likely to trade within a range of 1,438 to 1,524, and for today it is likely to trade within a range of 1,463 to 1,506.

This week's expected range: 1438 – 1524
Today’s expected range: 1463 – 1506

Resistance: 1492, 1499, 1506
Support: 1463, 1470, 1477

FBM KLCI - sign of toppishness

Stocks on Bursa Malaysia ended mixed in thin trade yesterday with profit-taking and bargain-hunting emerging after previous gains and sell-offs. A weak regional market following negative performance overnight on Wall Street weighed on investors sentiment as the meeting between German chancellor Angela Merkel and French president Nicolas Sarkozy was unable to restore confidence in the Euro zone. The FBM KLCI rose 0.23 of a point or 0.01% to 1,503.3. Losers overwhelmed gainers by 445 to 265 while 308 counters closed unchanged. Volume declined to 850.55 million shares worth RM1.71 billion compared with 892.81 million shares valued at RM1.6 billion on Wednesday.

The FBM KLCI opened with an up gap of 3.64 points and surged to the intra-day high of 1,507.59 within five minutes after opening. Heavy profit-taking activity pushed the key index lower to hit the intra-day low of 1,497.37 near mid afternoon, and a last minute buying of selected blue-chips pushed the key index back to the positive zone. Chart-wise, the FBM KLCI formed a bearish black hanging-man candlestick, which is a top reversal candlestick pattern, and the key index is likely to move lower today. Together with the bearish candlestick patterns formed in the last two days, this may mark the end of the bear market rally, and the downtrend may continue.

MACD was higher, but is still below its signal line, indicating a gradual improvement in the upward momentum. However, as the MACD line is still below the zero-line, the current upward climb may indicate just a rebound in a bear market. RSI (14) is marginally higher at 38.4, and is tapering off, indicating the upward relative strength is weakening. Stochastic was higher at 57.7 but showed sign of tapering off, indicating the short term up cycle is still in continuation but the upward strength starts to weaken. Readings from the indicators showed that the rebound rally of the FBM KLCI shows signs of weakening, and may take a pause.

The short term 5-day moving average (MA) has just crossed above the 10-day MA, giving out a first signal that the short term trend of the FBM KLCI has just turned upward. Nonetheless, as the key index is still below other longer period MAs, the current up turn could well be just part of a rebound, and the main trend is still down. Immediate downside support zone is at 1,497 to 1,484, while the immediate overhead resistance zone is at 1,507 to 1,510. With the drastic reduction in volume, the market may goes into an extended phase of consolidation.

Overnight, the Dow fell -419.63 points or -3.68% to close at 10,990.58. Today, the FBM KLCI is likely to trade within a range of 1,487 to 1,518.

This week's expected range: 1433 – 1525
Today’s expected range: 1487 – 1518

Resistance: 1508, 1513, 1518
Support: 1487, 1492, 1497

FBM KLCI - taking a breather

Stocks on Bursa Malaysia ended higher yesterday, supported by mild buying. The local bourse was generally supported by buying interest in selected heavyweights and low liners. However, further gains were capped as most investors stayed on the sidelines ahead of the release of second quarter GDP and July CPI figures. The FBM KLCI rose 4.83 points or 0.32% to 1,503.07 after opening 3.97 points higher at 1,502.21. Gainers overwhelmed losers by 453 to 255 while 309 counters closed unchanged. Turnover was lower with 892.81 million shares valued at RM1.6 billion changed hands compared with Tuesday’s 1.29 billion shares worth RM1.97 billion.

The FBM KLCI opened 3.97 points higher at 1,502.21 and moved in sideways trend for most part of the day, within a tight range of 1,499.59 to 1,504.63 in the positive zone. Chart-wise, the FBM KLCI formed a small white spinning-top candlestick in Harami position, which indicates indecision of market direction with a positive bias. The FBM KLCI is taking a breather at the 1,500-point level after the recent rebound from the low of 1,423, and it may now move sideways in a range of 1,497 to 1,510 to consolidate itself. A downside breakout below 1,497 will see it falling back to 1,490-point level, while an upside breakout above 1,510 may see it moving higher to test the 240-day moving average (MA) resistance level at 1,520.

MACD continued to climb higher and its histogram is also getting shorter, indicating an improvement in the upward momentum. However, as the MACD line is still below the signal-line, the current pick up in momentum may just be part of a rebound. RSI (14) was higher at 38.3, indicating an improvement in the relative strength. Nonetheless, it is still in the very bearish zone. Stochastic continued to move higher to 55.9, indicating a continuation in the short term up cycle and the improvement in market strength. Readings from the indicators showed that the FBM KLCI is gradually improving in terms of its momentum and strength. Nonetheless, it is still bearish in the broader picture.

The medium and long term trend of the FBM KLCI is still down, while the short term trend has just turned up, as the key index is now closing above the short term 5 and 10-day MA. However, as the 5-day MA is still below the 10-day MA, the current change could be fragile, and this could be just part of a bear market rally, the downtrend could later continue. Immediate support zone is at 1,497 to 1,490, while the overhead resistance zone is at 1,510 to 1,520.

Overnight, the Dow gained +4.28 points or +0.04% to close at 11,410.21. Today, the FBM KLCI is likely to trade within a range of 1,495 to 1,510.

This week's expected range: 1433 – 1525
Today’s expected range: 1495 – 1510

Resistance: 1506, 1508, 1510
Support: 1495, 1497, 1500

Stocks to watch: DIGISTA, PERDANA

FBM KLCI - pullback on profit-taking

Stocks on Bursa Malaysia closed mixed yesterday on profit-taking in line with the lower regional bourses despite a firmer Wall Street overnight. The market was strong in the early session but weakened towards the end as profit-taking was seen among blue chips and small-capitalized stocks. The FBM KLCI declined 1.5 points, or 0.1%, to 1,498.24 after touching an intra-day high of 1,510.54. Gainers edged losers by 411 to 393 while 285 counters closed flat. Volume rose to 1.29 billion shares worth RM1.97 billion from 1.07 billion shares worth RM1.45 billion on Monday.

The FBM KLCI opened with an up gap of 4.4 points at 1,504.14 and surged to the intra-day high of 1,510.54 within the first forty minutes. The key index then moved sideways for a while before succumbing to profit-taking activity that pulled it to close in the red. Chart-wise, the FBM KLCI formed a bearish black inverted hammer candlestick and a dark-cloud-cover pattern. The inverted hammer in dark-cloud position coupled with higher volume is a strong top reversal signal which indicates heavy liquidation. The FBM KLCI is expected to further pullback to the 38.2% Fibonacci retracement level at 1,490-point, after hitting the resistance at 50% Fibonacci retracement level at 1,510-point level earlier. The short term 5-day moving average (MA) at 1,487 and the long term 300-day MA at 1,483 may provide some cushion to the pullback.

MACD was marginally higher and the histogram was shorter upward, indicating a reduction in the downward momentum. Nonetheless, it is still below the zero-line, indicating the FBM KLCI is still bearish. RSI (14) hooked down marginally to 35.6 from 36 previously, reflecting the mild pullback, and the key index is still in the very bearish zone. Stochastic continued to move higher to 50.5, indicating the short term up cycle is in continuation. Mixed signals from the indicators showed that the FBM KLCI is still in a bearish mode and is likely to go into sideways consolidation for the immediate near term.

The main trend of the FBM KLCI remained down. However, it is now closing above the short term 5-day MA, which is currently at 1,487 but continued to close below the 10-day MA at 1,502, hence, the key index is likely to be range-bound today. An important support level to watch is the 1,483-point level provided by the 300-day MA, if this level is breached, then the FBM KLCI may re-visit the critical 1,474-point support level.

Overnight, the Dow fell -76.97 points or -0.67% to close at 11,405.93. Today, the FBM KLCI is likely to trade within a range of 1,480 to 1,524.

This week's expected range: 1433 – 1525
Today’s expected range: 1480 – 1524

Resistance: 1507, 1516, 1524
Support: 1480, 1488, 1493

FBM KLCI - bullish rebound

Stocks on Bursa Malaysia ended higher yesterday on bargain hunting in line with the regional bourses which bounced back amid Wall Street’s recovery last Friday. Gains in construction companies, short listed for the Klang Valley Mass Rapid Transit (MRT) project, further lent a hand for the positive domestic sentiment. The FBM KLCI rose 16.07 points or 1.08% to 1,499.74 after opening 2.37 points higher at 1,486.04. Gainers overwhelmed losers by 627 to 190 while 233 counters closed unchanged. Volume decreased to 1.07 billion shares valued at RM1.45 billion compared with 1.21 billion shares worth RM1.87 billion last Friday.

Taking cue from the positive gain on Wall Street last Friday, the FBM KLCI opened 2.37 points higher at 1,486.04 and climb higher throughout the day, with mild profit-taking, to end the day at the highest point. Chart-wise, the FBM KLCI formed a bullish white Marubozu candlestick which indicates the bulls were in full control for the day. With this bullish up move, the key index is likely to continue to move higher today. Technically speaking, yesterday’s up move is just a technical rebound within a bearish downtrend, as the very short term trend, represented by the 5 and 10-day moving averages (MA) has not even reverse up yet. Immediate strong overhead resistances are envisaged at 1,508, 1,515, 1,519, and 1,530-point levels.

MACD has hooked up, indicating a pause to the bearish downward momentum amid a rebound. RSI (14) continued to move higher to 36, from 26.6 on last Friday, indicating an improvement in the short term relative strength to the positive side, despite still being in the very bearish zone. Stochastic continued to climb higher to 44.6, indicating a continuation of the short term up cycle and an improvement in the market strength. Readings from the indicators showed that the bearish momentum of the FBM KLCI has taken a pause, and sign of mild bullishness is appearing. However, one has to be cautious that this could be just a technical rebound, which could be short live.

The main trend of the FBM KLCI is still down or bearish. However, the key index has for the first time in two weeks close above the very short term 5-day MA, sending out first sign of a possible short term trend reversal, and it will have to close above the 10-day MA which is currently at 1,508 to stage a short term uptrend. If that happened, the FBM KLCI is likely to rally towards the next resistance zone at 1,520 to 1,530.

Overnight, the Dow rose +213.88 points or +1.90% to close at 11,482.90. Today, the FBM KLCI is likely to trade within a range of 1,476 to 1,514.

This week's expected range: 1433 – 1525
Today’s expected range: 1476 – 1514

Resistance: 1505, 1509, 1514
Support: 1476, 1481, 1490

Stocks to watch: AIRASIA, SCABLE, WCT

FBM KLCI - more volatility ahead

Stocks on Bursa Malaysia closed on a positive note last Friday on bargain-hunting activities across the board despite rising fears over the global economy. The FBM KLCI closed 7.21 points, or 0.49%, higher to 1,483.67. Week-on-week, it dropped 40.76 points to 1,483.67 from 1,524.43 previously. Advancers led decliners by 536 to 265, while 269 counters were unchanged. Total volume declined to 1.21 billion shares worth RM1.88 billion from Thursday's close of 1.14 billion shares valued at RM2.3 billion, while total weekly volume increased to 7.776 billion shares valued at RM14.682 billion from 6.020 billion shares worth RM9.858 billion previously.

The FBM KLCI opened with a down gap of 9.24 points at 1,515.19 last Monday and plunged to the intra-day low of 1,476.24, losing 48.19 points at its worst, before rebounding to close 27.44 points lower at 1,496.99 on news of US credit rating being downgraded. The benchmark index continued with its downtrend on Tuesday to hit the intra-week low of 1,423.47 before rebounding to close 24.85 points lower at 1,472.14. The FBM KLCI rebounded on Wednesday to close 8.38 points higher at 1,480.52 in moderate trading. Taking cue from the heavy losses on Wall Street overnight, the FBM KLCI, which opened 13.29 points lower at 1,467.23 on Thursday, ended the day 4.06 points lower at 1,476.46. On Friday, the FBM KLCI continued its rebound to close 7.21 points higher at 1,483.67.

On the weekly chart, the FBM KLCI was down for the fifth consecutive week after touching the record high of 1,597.08, and fell to the low of 1,423.47, losing as much as 174 points within five weeks. The key index formed a black hammer candlestick, which is a bottom reversal candlestick pattern. As mentioned in previous Monday’s analysis that the key index may pullback to the target of 1,410, the 23.6% Fibonacci retracement level, it actually came very close to it and rebounded strongly. It is now closing above the 60-week moving average (MA) and also the critical 1,474 horizontal support level. The FBM KLCI may continue its rebound to move higher this week; however, it will have to close above the 30-week MA at 1,537 in order to reverse its current down trend. Otherwise, it may just consolidate or continue its downtrend.

On the daily chart, the FBM KLCI formed a small gravestone Doji candlestick on last Friday after opened with an up gap of 7.68 points, and traded in a narrow range. It showed investors confidence level were still fragile with active profit-taking activity before the weekend. The FBM KLCI is now closing above the 300-day MA and the 5-day MA, and it may stage a rebound to move higher today. Immediate overhead resistance zone is at 1,496 to 1,515 with 1,500 being an important psychological barrier. The trend of the FBM KLCI had turned bearish as it is now below the long term 200 and 240-day MAs. In order to reverse the downtrend, the key index will have to move back above the 200-day MA which is currently at 1,530.

Weekly MACD continued to slide lower, indicating an increase in the weekly downward momentum. Daily MACD was lower; however, its histogram has turned shorter upward, indicating a reduction in the daily downward momentum, or a rebound. Weekly RSI (14) was lower at 38.2, indicating the weekly relative strength has turned bearish, while daily RSI (14) was higher at 26.6, indicating an improvement in the daily relative strength despite still in the very bearish zone. Weekly Stochastic was lower at 33.5, indicating the continuation of the weekly down cycle and the weakening of the weekly market strength. Daily Stochastic, however, continued to move higher to 39.9, indicating a continuation of the daily up cycle and improvement of daily strength. Readings from the indicators showed that contrasting signals between the weekly and daily indicators. The weekly indicators are showing a bearish scenario, whereas the daily indicators showed a potential rebound ahead.

The trend of the FBM KLCI has turned bearish, in line with all major indices in the world. However, indications are there that the FBM KLCI may stage a rebound, or a bear market rally. If that happened, it would be an opportunity to liquidate. The market will take a while to settle as now is just the beginning of the bear trend. Immediate overhead resistance zone is at 1,496 to 1,519 while the immediate downside support zone is at 1,480 to 1,450.

Last Friday, the Dow rose +125.71 points or +1.13% to close at 11,269.02. This week, the FBM KLCI is likely to trade within a range of 1,433 to 1,525, and for today it is likely to trade within a range of 1,475 to 1,494.

This week's expected range: 1433 – 1525
Today’s expected range: 1475 – 1494

Resistance: 1487, 1490, 1494
Support: 1475, 1477, 1480

FBM KLCI - selling pressure weakening

Stocks on Bursa Malaysia closed lower yesterday with investors continuously reducing their holdings on the back of rising concerns over spill-over effects of the European debt crisis. Losses were mostly seen in banking and finance-related stocks, like Maybank and CIMB, which were the top contributors to the FBM KLCI in terms of weightage. The FBM KLCI, which opened 13.29 points lower at 1,467.23, ended the day 4.06 points, or 0.27% lower at 1,476.46. Decliners led advancers by 434 to 376 while 257 counters were unchanged. Total volume decreased to 1.144 billion shares valued at RM2.3 billion from 1.59 billion shares valued at RM3.298 billion on Wednesday.

Taking cue from the heavy losses on Wall Street overnight, the FBM KLCI opened with a down gap of 13.29 points at 1,467.23 and plunged to the intra-day low of 1,454.52 within the first two minutes of trading, losing 26 points at its worst, and the key index rebounded strongly on bargain hunting to climb higher. It hit the intra-day high of 1,479.41 before easing to close off high. Chart-wise, the FBM KLCI formed a piercing-line candlestick, a bottom reversal candlestick pattern, which indicates fight back by the bulls after the initial sell off on fear. The FBM KLCI actually slid to hit the long term 360-day moving average (MA) and staged a strong rebound. The positive sign is that the key index is able to close above the critical 1,474-point horizontal support level after piercing through it. With the appearance of three white candles overlapping in the last three days, the FBM KLCI might have seen its bottom for the time being, and today, it is likely to continue with its upward momentum to move higher.

MACD continued to slide lower, but is tapering off, giving out a subtle sign of waning downward momentum. RSI (14) hooked downward gently to 21.9, indicating the key index is still very bearish, but the downward move is weakening. Stochastic, however, continued to climb higher to 37.1, and is in divergence to the main index’s direction, indicating a gradual improvement of the short term market strength. Readings from the indicators showed that the downward momentum of the FBM KLCI is weakening, and may stage rebound rally.

The trend of the FBM KLCI is currently down. However, the price action of the key index over the last three days showed that it is stabilizing at current level. Judging from the dwindling volume over the last three day, the selling pressure is gradually weakening, and the FBM KLCI may stage a rebound to move higher. Immediate overhead resistance zone is at 1,480 to 1,496, while the immediate downside support zone is at 1,474 to 1,454.

Overnight, the Dow rose +423.37 points or +3.95% to close at 11,143.31. Today, the FBM KLCI is likely to trade within a range of 1,435 to 1,505.

This week's expected range: 1453 – 1553
Today’s expected range: 1435 – 1505

Resistance: 1486, 1496, 1505
Support: 1435, 1445, 1460

Stocks to watch: MAS, MUHIBAH

FBM KLCI - a weak rebound

Stocks on Bursa Malaysia closed higher yesterday on technical rebound in line with overnight gains on Wall Street, with shares of Malaysia Airlines (MAS) and AirAsia in the limelight during the whole trading session. The national carrier and the low-cost carrier, which topped the actives list, saw the former gained 12 sen to RM1.72 and the latter lost 41 sen to RM3.54. Most analysts said MAS would be the bigger winner from the swap share deal. The FBM KLCI rose 8.38 points, or 0.569%, to close at 1,480.52 in moderate trading. Gainers thumped losers by 590 to 292 while 264 counters were unchanged. Total volume declined to 1.59 billion shares valued at RM3.298 billion from 1.896 billion shares valued at RM3.598 billion on Tuesday.

Due to some technical glitch, the FBM KLCI was not displaying any reading for the first twenty six minutes. It showed a reading of 1,494.89 when resumed operation. The key index touched the high of 1,495.65 and slid lower throughout the day, but remained in the positive zone to end the day 8.38 points higher at 1,480.52. Price action of the FBM KLCI showed that profit-taking activity dominated the day, and the key index was on an intra-day downtrend, despite closing in the positive. The chances of continued consolidation are still high. The FBM KLCI is now sitting right on the long term 300-day moving average (MA), and is above the critical horizontal support level of 1,474. The 38.2% Fibonacci retracement support level is at 1,462. A close below these two immediate support levels will likely see the key index sliding towards the 360-day MA support at 1,453-point level.

MACD continued to slide lower, indicating the downward momentum is still strong. RSI (14) has hooked up to 22.6, indicating the short term relative strength is still very bearish. Stochastic, however, is higher at 33.6, reflecting the technical rebound. Overall readings of the indicators showed that the FBM KLCI is currently still very weak and may continue to consolidate.

Despite the rebound over the last two days, the FBM KLCI remained in a downtrend, and the long term outlook has turned bearish if it continues to stay below all the long term moving averages. As such, any rally should be viewed as an opportunity to liquidate, as no one can see how long the current bear trend will last until there are clear signs of trend change.

Overnight, the Dow fell -519.83 points or -4.62% to close at 10,719.94. Today, the FBM KLCI is likely to trade within a range of 1,446 to 1,519.

This week's expected range: 1453 – 1553
Today’s expected range: 1446 – 1519

Resistance: 1493, 1506, 1519
Support: 1446, 1459, 1469

Stock to watch: MUHIBAH

FBM KLCI - possible bottom hit

Stocks on Bursa Malaysia continued their downtrend yesterday following selling pressure before ending on an easier note, as some bargain hunting activity managed to help cap some of the losses. The FBM KLCI lost 24.85 points, or 1.66%, to 1,472.14 after hitting an intra-day low of 1,423.27, with heavy losses mostly seen in key heavyweights. Losers outnumbered gainers by 828 to 159 while 179 counters were unchanged. Turnover fell to 1.896 billion shares worth RM3.598 billion from 1.937 billion shares worth RM3.612 billion.

Taking cue from the hefty loss of 634 points on the Dow overnight, the FBM KLCI opened with a big down gap of 28.59 points at 1,468.40 and plunged to the intra-day low of 1,423.47, losing 73.52 points at its worst, within three minutes after opening. The key index rebounded and gradually recovered its lost ground to touch the intra-day high of 1,490.14 at mid afternoon before closing off high on profit-taking. Chart-wise, the FBM KLCI formed a white high wave Spinning-top candlestick; the appearance of this candlestick after a long downtrend indicates a possible bottom in which the long lower shadow indicates active bargain-hunting activity which lifted the key index off low, and that the key index is closing above its opening price gives it a bullish bias. Hence, it is likely that the FBM KLCI may continue its upward momentum to move higher today.

MACD continued to slide lower, indicating a continuation of the downward momentum. However, it has reached a deeply oversold level, and a rebound may occur soon. The last time MACD reached this deep oversold level was on May 27 2010. RSI (14) plunged lower into the oversold zone and is now at 17.05. The last time RSI reached this level was on May 26 2010 with a reading of 17.03, and the index was at 1,248, a rally started from there and reached an all time high of 1,597 on July 11 2011. Stochastic continued to move higher to 29.06, indicating a possible bottom has been reached, and the possible beginning of a short term up cycle. Readings from the indicators showed that the FBM KLCI is deeply oversold, and a rebound rally is likely to occur soon.

The trend of the FBM KLCI has turned bearish. The key index penetrated the 360-day moving average (MA) to hit the 50% Fibonacci retracement level and rebounded off it strongly, to close above the long term 360-day MA and the 38.2% Fibonacci level. This indicates strong support by the long term investors when prices fall to these long term support area. In order for the FBM KLCI to reverse its current down trend, it has to move back above the 240-day MA which is currently at 1,517, the 200-day MA at 1,530, and the 120-day MA at 1,540.

Overnight, the Dow rebounded +429.92 points or +3.98% to close at 11,239.77. Today, the FBM KLCI is likely to trade within a range of 1,433 to 1,529.

This week's expected range: 1453 – 1553
Today’s expected range: 1433 – 1529

Resistance: 1491, 1500, 1529
Support: 1438, 1452, 1462

FBM KLCI - downtrend continued

Stocks on Bursa Malaysia remained in the red at the close yesterday as investors continuously sold off their holdings in most heavyweights and lower-liners. However, mild bargain hunting in some heavyweights managed to cap some of the losses compared to massive losses after the morning trading session. The FBM KLCI lost 27.44 points, or 1.8%, to close at 1,496.99, dropping below 1,500-point level for the first time since March 17, 2011. Losers trumped gainers by 1,051 to 67 while 99 counters were unchanged. Turnover rose to 1.937 billion shares worth RM3.612 billion from 1.78 billion shares worth RM3.672 billion last Friday.

The FBM KLCI opened with a down gap of 9.24 points at 1,515.19 and plunged to the intra-day low of 1,476.24 at late morning, losing 48.19 points at its worst, and stabilized there. The key index rebounded in the afternoon session and recovered almost 28 points when it touched 1504.09 before easing to close at 1,496.99. Chart-wise, the FBM KLCI formed a black hammer-like candlestick which closed just slightly above the mid-point of the day; this indicates the bear is still in control, and the key index may continue to consolidate. The FBM KLCI has now closed below the long term 240-day moving average (MA), and has tested the support of the 300-day MA and rebounded off it. The critical support level to watch is the 1,474-point level, which has in the past provided strong support. A breach of the 1,474-point level is likely to see the FBM KLCI sliding towards the 38.2% Fibonacci retracement level at 1,462 and the 360-day MA support level at 1,452.

MACD continued to slide deeper into the bearish zone, indicating continued increase in the downward momentum. RSI (14) is at 21.3, and has plunged deeper into the bearish zone. Stochastic is at 23.7, and has hooked up, giving out a divergence signal. Readings from the indicators showed that the FBM KLCI is currently very weak and bearish. However, as the oscillator is at the oversold zone, some rebound maybe expected soon.

The trend of the FBM KLCI has turned bearish, and this could be just the beginning of a long term bear trend, any rebound rally should be viewed as an opportunity to liquidate. Immediate downside support zone is at 1,474 to 1,462, while overhead resistance zone is at 1,500 to 1,515.

Overnight, the Dow fell a hefty -634.76 points or -5.55% to close at 10,809.85. Today, the FBM KLCI is likely to trade within a range of 1,438 to 1,554.

This week's expected range: 1453 – 1553
Today’s expected range: 1435 – 1554

Resistance: 1516, 1535, 1554
Support: 1438, 1457, 1477

FBM KLCI - beginning of long term bear trend?

Stocks on Bursa Malaysia closed sharply lower last Friday as investors fled stocks for safe haven assets, unnerved by the hefty fall on Wall Street overnight, fresh jitters about Europe's debt crisis and the increasingly gloomy global economic outlook. Across the region, all markets moved in tandem to record massive losses. The benchmark FBM KLCI plunged 22.46 points or 1.45% to 1,524.43, and week-on-week, it lost 24.38 points from previous week’s close of 1548.81. Losers overwhelmed gainers by 934 to 60 while 152 counters were unchanged. Turnover, however, increased to 1.78 billion shares worth RM3.67 billion from 1.16 billion shares worth RM1.55 billion on Thursday. Total weekly volume increased to 6.020 billion shares worth RM9.858 billion from 5.13 billion shares worth RM8.07 billion the previous week.

The FBM KLCI opened last week steadier on news that US congressional leaders have agreed to raise the debt limit and cut government spending to avoid a potentially disastrous default, and the key index closed Monday 9.20 points higher at 1,558.01 after hitting intra-week high of 1,558.49. The FBM KLCI closed 3.16 points lower at 1,554.85 on Tuesday in line with continued weaknesses in regional markets which were spooked by concerns of a slowdown in global manufacturing activities. On Wednesday, the FBM KLCI lost 9.75 points to 1,545.10 in line with weaker regional bourses as US stocks plunged overnight on poor economic data. The benchmark FBM KLCI rebounded to close 1.79 points higher at 1,546.89 on Thursday, but on Friday it plunged to the intra-week low of 1,509.37 before rebounding to close the week at 1,524.43.

On the weekly chart, the FBM KLCI fell for the fourth consecutive week, and formed a bearish black candlestick. It rebounded when it hit the 50-week moving average (MA) support, and the last time it hit the same 50-week MA and rebounded was on May 27 2010. The FBM KLCI is at a critical position now, as it has broken the 30-week MA and is just slightly above the 50-week MA. In order to maintain the weekly uptrend, the key index will have to close back above the 30-week MA which is currently at 1,539-point level. If the key index close below the 50-week MA which is currently at 1,518, it is likely to slide lower to test the all critical psychological support level of 1,500. If the 1,500-point support level does not hold, the next important support level to watch is the pivot low at 1,474-point level; beyond which, the possible target will be the 23.6% Fibonacci retracement level at 1410.

On the daily chart, the FBM KLCI formed a black hammer candlestick, a bottom reversal candle pattern, which indicates active bargain-hunting activity when the key index approached the long term 240-day MA support area. The FBM KLCI may continue with its rebound to move higher today. However, the down gap which formed last Friday will post as strong resistance to the rebound. On top of that, the 200-day MA which is currently at 1,530 and the 120 & 150-day MA which are now at 1,540 will also post as strong resistance. In order to reverse the current downtrend, the FBM KLCI will have to move above the 1,553-point level follow by the 1,566-point level. The 240-day MA also coincided with the 23.6% Fibonacci retracement level at 1,513, measuring from the pivot low on May 27 2010 to the pivot high on July 11 2011. A close below this 23.6% Fibonacci retracement level will likely see the FBM KLCI moving lower to the next Fibonacci level of 38.2% at 1,462-point level.

Both weekly and daily MACD continued to slide lower, indicating the pick up in downward momentum. Weekly RSI (14) has broke below the 50-level and is now at 46.2, indicating the weekly relative strength has turned mildly bearish. Daily RSI (14) is at 28.6, has turned very bearish and is currently moving into the short term oversold zone. Weekly Stochastic has crossed below the 50-level and is at 43 now, indicating a rapid weakening of the weekly market strength and continuation of the weekly down cycle. Daily Stochastic, however, has hooked up marginally to 21.5 from 20.8, reflecting the rebound on Friday. Overall readings from both the weekly and daily indicators showed that the FBM KLCI is currently very bearish and weak, and may continue to consolidate.

The short term trend of the FBM KLCI remained down; the medium term trend has turned sideways while the long term uptrend is at challenge now. As the FBM KLCI has closed below the 200-day SMA, technically, the benchmark index is considered bearish now, and this could turn out to be the beginning of a long term bear trend. Immediate downside support zone is at 1,517 to 1,509 while the overhead resistance zone is at 1530 to 1,540.

Last Friday, the Dow rebounded +60.93 points or +0.54% to close at 11,444.61. This week, the FBM KLCI is likely to trade within a range of 1,453 to 1,553, and for today it is likely to trade within a range of 1,491 to 1,550.

This week's expected range: 1453 – 1553
Today’s expected range: 1491 – 1550

Resistance: 1533, 1541, 1550
Support: 1491, 1500, 1512

FBM KLCI - a weak rebound

Stocks on Bursa Malaysia closed mostly higher yesterday with main indices staying in positive territory despite weaker sentiments in Asian markets. Investors were concerned over the weakening global economic outlook following poor economic data from US and persistent Europe’s sovereign debt crisis. The benchmark FBM KLCI closed 1.79 points or 0.12% higher at 1,546.89. Gainers outnumbered losers by 397 to 363 while 316 counters were unchanged. Turnover decreased to 1.161 billion shares worth RM1.545 billion from 1.165 billion shares worth RM1.750 billion on Wednesday.

The FBM KLCI opened 1.77 points higher and continued its upward move to hit the intra-day high of 1,552.91 in the first hour of trade, and moved sideways for the rest of the morning session. Heavy profit-taking emerged in the afternoon pushed the key index to the negative territory, hitting a low of 1,545.69 before recovering slightly to close in the positive zone. Chart-wise, the FBM KLCI formed a Doji candlestick with long upper shadow, which indicates buyers were initially bullish in pushing up stocks, but was later met with heavy selling pressure, and the appearance of Doji indicates indecision of market direction. The FBM KLCI may continue to consolidate further.

MACD continued to slide lower, indicating an increased in the downward momentum. RSI (14) hooked up slightly to 38.7, indicating the key index is still in the bearish zone. Stochastic is at 20.9, has hooked downward and crossed below its slow stochastic line, indicating a reversal of the short rebound to continue with the down cycle. Readings from the indicators showed that the FBM KLCI is currently bearish and weak, and is likely to continue with its consolidation.

The short term trend of the FBM KLCI remained down, while the medium term trend has turned sideways, and the long term trend is still up. The long term uptrend maybe subjected to challenge soon, as the index is now very close to the 120 and 150-day moving average (MA), which is currently at 1,540-point level. A breach of this critical immediate support level will see the key index sliding lower to the 200-day MA at 1,530-point level, which is an extremely critical support level to watch.

Overnight, the Dow fell -512.76 points or -4.31% to close at 11,383.68. Today, the FBM KLCI is likely to trade within a range of 1,534 to 1,560.

This week's expected range: 1520 – 1586
Today’s expected range: 1534 – 1560

Resistance: 1551, 1556, 1560
Support: 1534, 1541, 1544

FBM KLCI - appearance of bottom reversal sign

Stocks on Bursa Malaysia extended Tuesday's losses yesterday in line with weaker regional bourses as US stocks plunged overnight on poor economic data. The faltering US economy, despite avoiding a debt default, would continue to affect regional markets on concerns of the impact of a slowdown in global exports and manufacturing activities. The FBM KLCI lost 9.75 points or 0.63% to 1,545.10 after opening 5.36 points lower at 1,549.49. Losers outnumbered gainers by 514 to 259 while 280 counters were unchanged. Turnover increased to 1.165 billion shares worth RM1.751 billion from 903.522 million shares worth RM1.437 billion on Tuesday.

Taking cue from the weak performance of Wall Street overnight, the FBM KLCI opened with a down gap of 5.36 points at 1,549.49 and plunged to the intra-day low of 1,538.95 within the first forty five minutes, losing 15.9 points at its worst. The key index then rebounded to gradually recover some lost ground before ending at 1,545.10. Chart-wise, the FBM KLCI formed a hammer candlestick, which indicates sellers were selling irrationally on fear factor initially, but buyers later surfaced to pick up stocks at lower level and lifted the key index. As expected, the FBM KLCI slid to the support level of 1,539 and rebounded to close above the critical support of 1,544-point level. The key index may continue its rebound to climb higher today, but strong resistance is expected at 1,550 to 1,560 levels. A close above the 1,560-point level is important for reversing the current downtrend.

MACD continued to slide lower into the negative zone, indicating a pick up in the downward momentum. RSI (14) continued to slide lower to 37, indicating the relative strength of the key index is turning more bearish. Stochastic, however, bucked the trend and continued to move higher to 25.5 from 23.2, indicating a possible bottom of the current down cycle. Readings from the indicators showed that the FBM KLCI is currently still weak, but there are signs that it may take a breather at this level to consolidate itself.

The short term trend of the FBM KLCI remained down, while the medium term trend may turn sideways, and the longer term trend is still up. Immediate overhead resistance zone is at 1,550 to 1,560 while the downside support zone is at 1,539 to 1,530.

Overnight, the Dow rebounded +29.82 points or +0.25% to close at 11,896.44. Today, the FBM KLCI is likely to trade within a range of 1,529 to 1,560.

This week's expected range: 1520 – 1586
Today’s expected range: 1529 – 1560

Resistance: 1550, 1555, 1560
Support: 1529, 1534, 1539

FBM KLCI - lower on profit-taking

Stocks on Bursa Malaysia closed mostly lower yesterday in line with continued weaknesses in regional markets which were spooked by concerns of a slowdown in global manufacturing activities. Trading was cautious amid the easier trend on Wall Street despite US lawmakers approving a deal to raise the country's debt limit. The FBM KLCI closed 3.16 points or 0.20% lower at 1,554.85. Losers beat gainers by 496 to 307 while 262 counters were unchanged. Turnover was lower at 903.522 million shares worth RM1.437 billion from 1.009 billion shares worth RM1.452 billion on Monday.

The FBM KLCI opened flat at 1,558.02 and slid into the negative territory before rebounding to touch the intra-day high of 1,558.84 at late morning. Profit-taking activity which appeared at noon pushed the key index to hit the intra-day low of 1,553.39 before rebounding slightly to close off low. Chart-wise, the FBM KLCI formed a dark-cloud-cover candlestick pattern which indicates heavy profit-taking activity after a strong rebound on Monday, and the key index is likely to continue with its consolidation process today. Immediate critical support is at 1,544-point level, a breach of this support is likely to see the FBM KLCI sliding toward the next lower support zone at 1,539 to 1,530.

MACD continued to slide lower, but the histogram turned slightly shorter upward, indicating a slow down in the downward momentum. RSI (14) hooked downward slightly to 42.8, indicating the short term relative strength of the key index is still bearish. Stochastic was marginally higher at 23.2, indicating a slight pick up in the market strength. Mixed signals from the indicators showed that the FBM KLCI is likely to continue to consolidate until clear reversal signals is established.

The short term trend of the FBM KLCI remained down, while the medium term trend has just turned bearish. The long term trend is still up, but is likely to subject to challenge very soon. With external negative factors continued to loom the market, the FBM KLCI is likely to continue its consolidation process with immediate downside support zone envisaged at 1,544 to 1,530.

Overnight, the Dow fell -265.87 points or -2.19% to close at 11,866.62. Today, the FBM KLCI is likely to trade within a range of 1,544 to 1,566.

This week's expected range: 1520 – 1586
Today’s expected range: 1544 – 1566

Resistance: 1558, 1562, 1566
Support: 1544, 1550, 1552

FBM KLCI - rebounded in tandem with regional bourses

Stocks on Bursa Malaysia ended broadly higher yesterday, recovering from three trading days of losses, in tandem with firmer regional bourses following news that US congressional leaders have agreed to raise the debt limit and cut government spending to avoid a potentially disastrous default. The FBM KLCI finished 9.20 points to 1,558.01 after opening 0.98 point higher at 1,549.79. Gainers beat losers by 553 to 225 with 300 counters unchanged. Turnover was lower at 1.009 billion shares, worth RM1.452 billion, from 1.107 billion shares, worth RM1.716 billion, registered last Friday.

The FBM KLCI opened 0.98 point higher at 1,549.79 and climb higher to touch the intra-day high of 1,558.49. It was hovering near the high in a tight range for most part of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick with short lower and upper shadows which indicates the bulls were in control for the day, and it may continue its upward momentum to move higher today. The bullish candlestick marked a strong technical rebound of the key index, but the short term trend is still down. In order for the FBM KLCI to reverse its short term downtrend, the key index must close above the 1,570-point level.

MACD turned sideways, and the histogram also turned shorter upward, indicating a reduction in the downward momentum. RSI (14) hooked upward to 44.9, indicating the relative strength of the key index has turned from bearish to mildly bearish. Stochastic reversed upward to 18.2 and had crossed above its slow stochastic line, reflecting the rebound in the key index. Readings from the indicators reflected the rebound in the FBM KLCI; however, a trend reversal will require one or two more days’ data for confirmation.

The short term trend of the FBM KLCI remained down despite the strong rebound yesterday. To reverse the current short term downtrend, the key index will have to close above at least the 1,566-point level and follow by the 1,570-point level. The medium term trend has turned sideways while the long term uptrend remained intact. Immediate overhead resistance zone is at 1,560 to 1,570, while the immediate downside support zone is at 1,549 to 1,544.

Overnight, the Dow fell -10.75 points or -0.09% to close at 12,132.49. Today, the FBM KLCI is likely to trade within a range of 1,543 to 1,568.

This week's expected range: 1520 – 1586
Today’s expected range: 1543 – 1568

Resistance: 1562, 1565, 1568
Support: 1543, 1546, 1552

Stocks to watch: E&O, MBSB, RANHILL

FBM KLCI - short term downtrend continued

Stocks on Bursa Malaysia closed lower for the third consecutive day last Friday as market sentiment continued to sour pending the uncertainty on the US debt problem. The US debt crisis continued to weigh in on investors amid an easier regional market and a weak performance overnight on Wall Street. The FBM KLCI declined 3.1 points, or 0.2%, to 1,548.81 after opening 1.31 points higher at 1,553.22, and week-on-week, it lost 16.25 points from the previous week’s close of 1,565.06. Losers led gainers by 426 to 306 while 315 were unchanged. Volume increased to 1,107 billion shares worth RM1.716 billion compared with 1.06 billion shares valued at RM1.74 billion on Thursday. Weekly volume increased to 5.13 billion shares, worth RM8.07 billion, from 4.9 billion shares, valued at RM9.24 billion, last week.

The FBM KLCI opened 0.4 point better at 1,565.46 but fell 5.46 points to 1,559.60 on last Monday in line with the weak performance of regional bourses. The benchmark index rebounded to close 2.17 points higher to 1,561.77 on Tuesday on active buying of blue-chips, particularly finance and plantation, and in line with gains on regional markets. On Wednesday, the FBM KLCI pulled back 3.6 points to 1,558.17 on concerned over progress in the plan to lift the US debt ceiling. The key index fell another 6.26 points on Thursday to 1,551.91, and on Friday, the FBM KLCI slid for the third consecutive day to hit the intra-week low of 1,544.88 before rebounding to close the week off low at 1,548.81, losing another 3.1 points.

On the weekly chart, the FBM KLCI formed a bearish black candlestick which indicates heavy selling pressure for the week and continuation of the downtrend for the third consecutive week. The key index had now closed below the 5 and 10-week moving averages (MA) and was resting on the 20-week MA which is currently at 1,548.54. A break below the 20-week MA is likely to see the FBM KLCI sliding lower to test the support of the 30-week MA which is currently at 1,541-point level. The 30-week MA support is critical as it has been providing important support at critical time to the benchmark index since the uptrend started in April, 2009.

On the daily chart, the FBM KLCI formed a black hammer-like candlestick which indicates sellers were initially strong in hammering down the stock prices, but buyers later appeared to lend support to the key index. However, as the key index failed to close above the mid-point on last Friday, it indicates the buyers were still cautious in their support. Nonetheless, the support at 1,544-point level was seen as the key index rebounded when it hit the low of 1,544.88. As the bearish sentiment still prevail, the FBM KLCI is likely to extend its downtrend and consolidation. The critical support level to be watch is the 1,538-point level, which is where the 120 and 150-day MA meets. A break below this level is likely to see the FBM KLCI sliding lower to test the long term 200-day MA support at 1,529.

Weekly MACD has just made a dead-cross over its weekly signal line, issuing a sell signal on the weekly chart. Daily MACD continued to slide lower into the negative zone, indicating a pick up in the bearish momentum. Weekly RSI (14) is at 52.4, and has continued to slide lower into the neutral zone. Daily RSI (14) is lower at 36.4, which indicates the daily relative strength of the FBM KLCI is turning more bearish. Weekly Stochastic continued to slide lower to 62.7, indicating continued loss of weekly market strength and the continuation of the weekly down cycle. Daily Stochastic is at 11.7, indicating the daily market strength is very weak and the key index is short term oversold. Readings from the weekly and daily indicators showed that the FBM KLCI is currently very weak and bearish, and the downward momentum continued to dominate. Hence, the FBM KLCI is likely to extend its current consolidation process until a fresh catalyst emerges.

The short term trend of the FBM KLCI remained down, and the medium term trend has also just turn bearish with the key index closing below the 60-day MA last Thursday. The long term trend is still up; however, it maybe subjected to test very soon. Immediate downside support zone is at 1,544 to 1,538, and the next lower critical support is at 1,525 provided by the pivot high formed on 14th January, 2008. The overall market is likely to continue with the consolidation process until there is a positive outcome on the US debt crisis.

Last Friday, the Dow fell -96.87 points or -0.79% to close at 12,143.24. This week, the FBM KLCI is likely to trade within a range of 1,520 to 1,586, and for today it is likely to trade within a range of 1,535 to 1,563.

This week's expected range: 1520 – 1586
Today’s expected range: 1535 – 1563

Resistance: 1554, 1558, 1563
Support: 1535, 1540, 1544