FBM KLCI - likely to trend higher

Stocks on Bursa Malaysia ended last Friday higher in tandem with steady gains on regional markets, prompted by progress in Europe's debt plan and better growth of the US gross domestic product (GDP) for the third quarter. Besides, the key index was lifted by the positive mood in Wall Street on Thursday, where the DJIA jumped 2.86 per cent and the broader S&P 500 surged 3.43 per cent. The FBM KLCI rose 10.89 points or 0.74% to end at 1,481.82 after opening 9.29 points higher at 1,480.22, and week-to-week, the key index advanced 42.99 points from previous Friday's closing of 1,438.83. Gainers led losers by 470 to 338 while 319 counters were flat. Turnover stood at 1.877 billion shares worth RM2.295 billion from Thursday’s 1.877 billion worth RM2.413 billion. While total weekly volume declined to 6.033 billion shares worth RM7.097 billion from 7.391 billion shares worth RM6.584 billion the previous week.

On the weekly chart, the FBM KLCI formed a bullish white candlestick which indicates reversal from the consolidation on the previous week, and a continuation of the weekly uptrend. With the strong up move last week, the key index is likely to continue moving higher this week targeting the 1,500 to 1,508 resistance zone, where the 1,508 resistance is posted by the 30 and 60-week moving averages (MA).

On the daily chart, the FBM KLCI gap up 9.29 points at 1,480.22 and surged to hit the 61.8% Fibonacci retracement (FR) level at 1,488 and pulled back strongly, and it formed a white inverted hammer candlestick with a big up gap from the previous candle, which indicates pushed up for distribution. This candlestick formation on the daily chart looks like a shooting-star candle formation which could indicates possible reversal, hence, the key index might possibly take a breather to consolidate itself before making further attempt to challenge higher target levels.

Weekly MACD continued to rise, albeit below the zero-line, but is approaching the signal-line, indicating a continued pick up in the weekly momentum. Daily MACD has continued to surge higher into the positive zone and the daily histogram also continued to rise, indicating a resumption of the daily upward momentum after the recent consolidation. Weekly RSI (14) continued to move higher to 50.3 and has made an important breakthrough to cross the 50-level, indicating the weekly relative strength has turned bullish for the first time after it broke below the 50-level on the August 5th,2011. Daily RSI (14) climbed higher to 64.4, indicating the daily relative strength is getting more bullish. Weekly Stochastic continued to climb higher to 53.4, indicating a continuation in the weekly up cycle and continued improvement of the weekly market strength. Daily Stochastic was also higher at 94.5, indicating a continuation in the daily up cycle and the daily market strength is very strong. Readings from both the weekly and daily indicators showed that the FBM KLCI is turning bullish, and the upward momentum may carry the key index higher in the short term.

The short and medium term trend of the FBM KLCI is currently up as the key index was closing above the short and medium term moving averages. For the long term, the key index has just crossed above the 360-day MA but is still below the 120, 200, 240 and the 300-day MAs, which together formed a resistance zone at 1,500 to 1,513-point levels. If the FBM KLCI is able to breakthrough this strong resistance zone, then it would turn very bullish. With Euro-zone debt crisis settling down and the improvement in US economic data, the market is likely to continue its uptrend. Rotational plays on second and third liners are likely to continue with focus on oil & gas, construction, property and consumers sectors.

Last Friday, the Dow rose +22.56 points or +0.18% to close at 12,231.11. This week, the FBM KLCI is likely to trade within a range of 1,432 to 1,529, and for today, it is likely to trade within a range of 1,467 to 1,499.

This week's expected range: 1432 – 1529
Today’s expected range: 1467 – 1499

Resistance: 1488, 1493, 1499
Support: 1467, 1472, 1477

Hibiscus speeds up drill time

PETALING JAYA: Hibiscus Petroleum Bhd has significantly cut down on the time it needs to venture into the oil and gas exploration sector in the Middle East with the recent purchase of a 35% stake in Middle East-based Lime Petroleum.

“The gestation period of four years, normally associated with this kind of oil and gas projects, has been cut down to 12 months for us.

“Now, within 12 months, we are ready to drill,” managing director Kenneth Pereira said.

“The Lime package is a nice one, with drillable opportunities; it is also to be listed soon, likely on London's AIM, so there will be more money to be raised in future for expansion plans,” he tells StarBizWeek in an interview.

Lime has three concessions in the Middle East, namely Ras Al Khaimah (1,200km sq), Sharjah (1,600km sqd), both in United Arab Emirates (UAE) and the largest one in Oman (16,900 km sq), with the fourth potential concession in Fujeirah, also in UAE.

Read more...

FBM KLCI - turning bullish

Stocks on Bursa Malaysia finished on a firmer note yesterday on gains in selected blue chips on the back of positive market sentiments globally. Asian markets rose after players took new positions following the decision by European policymakers to contain the Euro-zone debt crisis and the private sector investors agreed to take a 50 per cent "haircut" in Greek bonds. The FBM KLCI rose 13.13 points or 0.9% to end at 1,470.93, after opening 3.75 points higher at 1,461.55. Gainers led losers by 689 to 165 while 195 counters were unchanged. Turnover advanced to 1.877 billion worth RM2.413 billion from 950.64 million worth RM1.075 billion Tuesday.

The FBM KLCI opened with an up gap of 3.75 points at 1,461.55 and continued to move higher throughout the day with intermittent mild pullback. It touched the intra-day high of 1,474.47 before pulling back on profit-taking to close at 1,470.93. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates buyers were in control of the day, and the key index is likely to continue moving higher today. The FBM KLCI has for the first time in one and a half month closed above the 360-day moving average (MA) since it broke below this long term support on 12th September. The key index is likely to stage a rally to move higher towards the next target of 1,500-point.

MACD continued to climb higher and its histogram also turned green for the first time after staying in the red for six consecutive days, indicating a continuation of the upward momentum and flashing a buy signal. RSI (14) is higher at 61.9, indicating the short term relative strength of the key index has turned bullish. Stochastic has moved higher to 91.1 after crossing over its slow stochastic line, indicating a pick up in the market strength and continuation of the up cycle. Readings from the indicators showed that the FBM KLCI has turned bullish after recent consolidation, and the upward momentum is likely to carry the index higher.

The short and medium term trend of the FBM KLCI is currently up, while the long term has just turned positive with the key index closing above the 360-day MA yesterday. The FBM KLCI is likely to continue with its upward move to challenge the 1,500-point target soon. Immediate overhead resistance zone is at 1,480 to 1,491 with 1,488, the 61.8% Fibonacci retracement level, being a key resistance level. Immediate downside support zone is at 1,459 to 1,448. With overall volume surging to 1.8 billion shares, the market is likely to show more bullishness in trading.

Overnight, the Dow rose +339.51 points or +2.86% to close at 12,208.55. Today, the FBM KLCI is likely to trade within a range of 1,448 to 1,489.

This week's expected range: 1389 – 1503
Today’s expected range: 1448 – 1489

Resistance: 1477, 1483, 1489
Support: 1448, 1454, 1462

FBM KLCI - breaking out of its consolidation

Stocks on Bursa Malaysia closed mixed on Tuesday with the benchmark index recouping its earlier losses as key index link counters staged a late rebound in line with the mixed trading on regional bourses. However, players are cautious ahead of Wednesday’s meeting by European policymakers to resolve the Euro-zone debt crisis. The FBM KLCI rose 7.78 points, or 0.54%, to close at 1,457.80, after opening 3.44 points better at 1,453.46. Decliners led gainers by 373 to 299 while 289 counters were unchanged. Turnover declined to 950.64 million worth RM1.075 billion from Monday’s 1.238 billion shares worth RM1.3 billion. Bursa Malaysia was closed yesterday for Deepavali celebration.

The FBM KLCI opened with an up gap of 3.44 points at 1,453.46 and surged to the morning session high of 1,455.65 within the first fifteen minutes. Profit-taking activities then pushed it to the intra-day low of 1,448.12 before late hour bargain hunting activity on selected blue-chips which pushed the key index to close at the highest point of the day. Chart-wise the FBM KLCI formed a hammer candlestick which indicates sellers were initially strong in pressing down the key index but later buyers surfaced to push it up. The FBM KLCI is likely to continue to climb higher today with immediate overhead resistance zone at 1,462 to 1,470. The resistance at 1,469 posted by the 360-day moving average (MA) is particularly important, as a close above this level would indicate the return of the long term bulls.

MACD continued to climb higher, but its histogram was slightly shorter, indicating a slow down in the upward momentum. RSI (14) was higher at 58.8, indicating the key index is gradually turning more bullish even though it is still in the mildly bullish zone. Stochastic has made a hooked up and crossed above its slow stochastic line, indicating a resumption in the up cycle after a brief consolidation. Readings from the indicators showed that the FBM KLCI is breaking out of it short term consolidation, and may continue to move higher.

With the up move on Tuesday, the FBM KLCI has resumed its short term uptrend as it is now above all the short term moving averages, and is likely to continue to move higher. The medium term trend has also turned up as the key index has closed above the 50 and 60-day MAs decisively. The long term trend remained down at the moment, however, the FBM KLCI is likely to challenge the 360-day MA soon, and if it is able to break above the resistance post by the 360-day MA at 1,469, the move may trigger a rally towards the 1,500-point level.

Overnight, the Dow rose +162.42 points or +1.39% to close at 11,869.04 after reports that China will buy European bonds. Today, the FBM KLCI is likely to trade within a range of 1,441 to 1,468.

This week's expected range: 1389 – 1503
Today’s expected range: 1441 – 1468

Resistance: 1461, 1465, 1468
Support: 1441, 1444, 1451

Stocks to watch: HIBISCS, HIBISCS-WA

Hibiscus Petroleum buys 35% of Lime Petroleum for US$55m

KUALA LUMPUR: Hibiscus Petroleum Bhd (Hibiscus), has executed two agreements to acquire a 35% equity stake in Lime Petroleum Ltd for a total of US$55 million.

Hibiscus managing director Kenneth Pereira said on Tuesday, Oct 25 the deal comprises of a share subscription agreement and a share purchase agreement.

"Under the share subscription agreement, Hibiscus will subscribe for 76.9 million new shares or 27.2% equity stake in Lime Petroleum for a cash consideration of US$50 million. Hibiscus will also purchase a 7.8% equity stake in Lime Petroleum from the current major shareholder, Rex Oil and Gas Ltd, through a share purchase agreement, for a cash consideration of US$5 million.

Once both agreements are finalised, which are subject to approvals by Hibiscus' shareholders and the Securities Commission, the special purpose acquisition company will hold 35% equity stake in Lime Petroleum, according to Pereira.

He added that Hibiscus was expecting an additional concession to be included into Lime Petroleum, bringing the total concessions under this company to at least four by the end of this year.

Written by Kamarul Azhar of theedgemalaysia.com
Tuesday, 25 October 2011 11:52


For full details of the said transaction please click on HIBISCUS

FBM KLCI - higher in line with firmer regional performance

Stocks on Bursa Malaysia closed higher yesterday in line with firmer regional markets. The rise in the local and other bourses in Asia was driven by New York's strong gains last Friday coupled with optimism of a solution to the Euro-zone debt crisis and a possible roll-out of the third quantitative easing. Gains in blue chips like Genting, Axiata, Maxis and Tenaga Nasional lifted the market significantly. The FBM KLCI rose 11.19 points or 0.78% to end at 1,450.02 after opening 11 points better at 1,449.83. Gainers led losers by 556 to 203 while 254 counters were flat. Turnover declined to 1.238 billion shares worth RM1.3 billion from 1.253 billion shares worth RM1.095 billion last Friday.

Taking cue from the strong performance of Wall Street last Friday, the FBM KLCI opened with an up gap of 11 points at 1,449.83 and climbed to the intra-day high of 1,462.06 at mid morning. The key index then moved sideways, and heavy profit-taking activity which appeared in mid afternoon pushed the index to close near the low of the day. Chart-wise, the FBM KLCI formed a gravestone Doji which indicates the bulls were initially strong in pushing up the key index, but later the bears surfaced and pressed it back down. The key index has resumed its immediate short term uptrend as it is now closing above the 5-day moving average (MA), as well as is above the 1,450-point psychological resistance turned support level, and might continue its upward move to re-test the recent high of 1,465.48.

MACD was slightly higher, but the histogram turned shorter, indicating a loss in the upward momentum. Nonetheless, the MACD is still in the positive zone. RSI (14) has hooked upward to 56.8, indicating the relative strength of the key index has pick up slightly to become mildly bullish. Stochastic slid lower to 79.3, indicating a continuation of the down cycle and weakening of the market strength. Readings from the indicators showed that the FBM KLCI is mildly bullish but is still in a consolidation mode.

The short term trend of the FBM KLCI remained up, while the medium and long term trend is still down. The key index is now sitting right below the medium term 60-day MA which is currently at 1,452.86, a decisive close above this level will see the FBM KLCI moving higher to test the next resistance level posted by the 360-day MA at 1,469, and a decisive close above the 360-day MA may trigger a rally towards the 1500-point psychological resistance level. With volume maintaining above the 1 billion shares mark, the overall market is likely to remain active with rotational play on the second and third liners. Overnight, the Dow rose +104.83 points or +0.89% to close at 11,913.62. Today, the FBM KLCI is likely to trade within a range of 1,432 to 1,475.

This week's expected range: 1389 – 1503
Today’s expected range: 1432 – 1475

Resistance: 1459, 1467, 1475
Support: 1432, 1440, 1445

FBM KLCI - likely to further consolidate

Stocks on Bursa Malaysia ended the week lower last Friday as investors stayed on the sidelines to await the outcome of European policymakers' meeting over the weekend. Losses were mostly seen in Genting, which dragged the FBM KLCI 2.35 points or 0.16% lower to close at 1,438.83, and week-on-week, the benchmark index eased 3.6 points or 0.25% from previous Friday's closing of 1,442.43. Losers led gainers by 366 to 323 while 278 counters were unchanged. Total market volume dropped to 1.253 billion units valued at RM1.095 billion from 1.309 billion units valued at RM1.155 billion on Thursday. Total weekly volume surged to 7.391 billion shares worth RM6.584 billion from 5.305 billion units valued at RM6.485 billion the previous week.

The FBM KLCI opened with an up gap of 9.54 points at 1,451.97 on last Monday and ended the day near the intra-week high at 1,645.35. Tuesday saw a strong pullback in the key index where it fell 25.41 points to close at 1,439.94 after opening 5.77 points lower at 1,459.58. Taking cue from the strong gain on Wall Street overnight, the FBM KLCI rebounded on Wednesday to close 10.31 points higher at 1,450.25. On Thursday, stocks ended on a softer note as weaker sentiment globally eased investors' confidence, resulting in selling across the board, and the benchmark index closed 9.07 points lower at 1,441.18. On Friday, the FBM KLCI was basically in a consolidation mode and traded in a narrow range for a major part of the day, it however, went on a roller-coaster ride near the end of the day where it suddenly tumbled to the low of 1,371.18, due probably to some errors in trade execution, losing 70 points at its worst, before recovering to close 2.35 points lower to end the week at 1,438.83.

On the weekly chart, the FBM KLCI formed a black hangman candlestick which indicates consolidation; however, as the long lower shadow was due to some trading error, it can be ignored. It showed that the key index was taking a breather and gone into consolidation after three consecutive weeks of up move. It hit into the 80-week moving average (MA) and pulled back. Nonetheless, it is now above the 5 and 10-week MAs. The FBM KLCI is likely to continue its consolidation this week but with an upward bias.

On the daily chart, the FBM KLCI formed a hammer candlestick with extremely long lower shadow. Taking away the long lower shadow, the price action of the key index indicated continued consolidation. Immediate support is at 1,429 while the immediate overhead resistance zone is envisaged at 1,447 to 1,450.

Weekly MACD continued to climb higher, indicating an improvement in the weekly upward momentum; nonetheless, the weekly MACD is still below the signal-line in the negative zone. Daily MACD was higher but tapering off, together with the shorter histogram, it indicated a loss in the daily upward momentum, and hence, might extend its consolidation. Weekly RSI (14) hooked down slightly to 42.6 reflecting the pullback on the weekly chart, and the weekly relative strength is still in the mildly bearish zone. The daily RSI (14) had continued to slide lower to 53.9, reflecting the consolidation and the daily relative strength is losing its strength and moved lower into the mildly bullish zone. Weekly Stochastic continued to climb higher to 41.7, indicating the current weekly up cycle is still intact. Daily Stochastic, however, fell lower to 80.1, reflecting the pullback correction in the key index for the last few days. If the daily stochastic continue to slide below the 80 level, then the down cycle may extend itself, signaling an end to the recent up cycle. Readings from the indicators showed that the FBM KLCI is taking a breather after the recent rally from the low of 1,310.

The short term trend of the FBM KLCI remained up, as it continued to stay above the short term 10, 20 and 30-day MAs. But for the immediate term, it has gone into a sideways consolidation. In order to breakout from this consolidation, the FBM KLCI will have to break above the immediate resistance posted by the 5-day MA at 1,447, and it may then re-test the recent high of 1,465. The medium and long term trend remained down. For the coming week, the FBM KLCI may continue to consolidate but with an upward bias. However, the second and third liners may continue to dominate the active counters scene.

Last Friday, the Dow rose +267.01 points or +2.31% to close at 11,808.79. This week, the FBM KLCI is likely to trade within a range of 1,389 to 1,503, and for today, it is likely to trade within a range of 1,423 to 1,459.

This week's expected range: 1389 – 1503
Today’s expected range: 1423 – 1453

Resistance: 1443, 1448, 1453
Support: 1423, 1429, 1433

Stocks to watch: FABER, KPS, JAKS, PUNCAK, SALCON

FBM KLCI - lower in tandem with regional weakness

Stocks on Bursa Malaysia ended yesterday on a softer note as weaker sentiment globally eased investors' confidence, resulting in selling across the board. The FBM KLCI, which opened 5.07 points lower at 1,445.18, fell as low as 1,429.38 and closed 9.07 points or 0.63% lower at 1,441.18. Losers outnumbered gainers by 500 to 232 while 226 counters were unchanged. Total market volume dwindled to 1.309 billion shares worth RM1.155 billion from Wednesday’s close of 1.691 billion shares worth RM1.212 billion.

The FBM KLCI opened 5.07 points lower at 1,445.50 and slid to the intra-day low of 1,429.38, losing 20.87 points at its worst, but rebounded in the last hour to recover some lost ground to end at 1,441.18. Chart-wise, the FBM KLCI formed a black hammer candlestick, a bottom reversal candle pattern, which indicates sellers were initially aggressive in pushing down the key index but later buyers surfaced to bargain hunt and lifted up the index. Today, the FBM KLCI may stage a follow through rebound to move higher. However, the 5-day moving average (MA) at 1,448 may post as a resistance to the up move.

MACD has curved down slightly, and the histogram continued to turn shorter, indicating a continued loss in the upward momentum. However, as the MACD line is still above the zero-line, the broader picture is still mildly bullish, and the current weakness may just be a pullback after a rally. RSI (14) has hooked downward to 54.6 from 57.4, reflecting the correction, and the short term relative strength of the FBM KLCI is still mildly bullish. Stochastic continued to slide lower to 80.6, indicating a continuation of the down cycle or short term correction. Readings from the indicators showed that the FBM KLCI is undergoing a short term correction after the recent rally, but for the short term it is still mildly bullish.

The short term trend of the FBM KLCI remained up, even though is has closed below the 5-day MA, but is still above the 10, 20 and 30-day MAs. The key index had tested the support of the 10-day MA and rebounded off it, and it is now closing below the 5-day MA. Hence, for the immediate short term, the key index may move sideways range-bound with immediate overhead resistance at 1,448 posted by the 5-day MA and downside support at 1,432 provided by the 10-day MA. The long term outlook remained bearish for the time being until the key index is able to break above the 1,500-point level.

Overnight, the Dow rose +37.16 points or +0.32% to close at 11,541.78. Today, the FBM KLCI is likely to trade within a range of 1,415 to 1,462.

This week's expected range: 1371 – 1504
Today’s expected range: 1415 – 1462

Resistance: 1448, 1455, 1462
Support: 1415, 1422, 1431

Stocks to watch: LATEXX, SUPERMX, UOADEV

FBM KLCI - higher on technical rebound

Stocks on Bursa Malaysia ended higher yesterday with the FBM KLCI closing at its intra-day high amid investors' cautious stance on the Euro-zone debt woes. Gains in most heavyweights such as Petronas Chemicals, Genting Malaysia and Tenaga Nasional contributed significantly to the rise, accounting for 8.68 points. The FBM KLCI rose by 10.31 points or 0.72% to close at 1,450.25 after opening 4.97 points higher at 1,444.91. Gainers led losers by 641 to 162, while 210 counters were unchanged. Total market volume rose to 1.69 billion shares valued at RM1.21 billion from 1.36 billion shares valued at RM1.37 billion on Tuesday.

Taking cue from the strong gain on Wall Street overnight, the FBM KLCI opened 4.97 points higher at 1,444.91 and surged to the morning session high of 1,449.90, it then pullback to the intra-day low of 1,444.42 and was moving sideways within the high low range before a last minute pushed up to close at the highest point of the day. Chart-wise, the FBM KLCI formed a small white candlestick in bullish Harami position which indicates consolidation and may possibly continue to move higher, depending on external factors. Immediate overhead resistance zone is anticipated at 1,452 to 1,465, while the immediate downside support zone is at 1,444 to 1,433.

MACD continued to move higher but is tapering off, and its histogram also turned shorter, indicating a reduction in the upward momentum. RSI (14) hooked up gently to 57.4, indicating the relative strength of the key index is still mildly bullish. Stochastic continued to slide lower to 87.8 and is below the slow stochastic line, indicating consolidation. Readings from the indicators showed that the FBM KLCI has moved into short term consolidation.

The short term trend of the FBM KLCI remained up while medium term trend is down, and the longer term outlook is still bearish, technically. Immediate 5-day moving average (MA) support is at 1,448, while the 10-day MA support is at 1,427, and the horizontal support is at 1,433. With volume remained above the 1 billion shares mark, the overall market is likely to remain active with rotational play on second and third liners while the index link counters may continue to consolidate. Overnight, the Dow fell -72.43 points or -0.63% to close at 11,504.62. Today, the FBM KLCI is likely to trade within a range of 1,440 to 1,456.

This week's expected range: 1371 – 1504
Today’s expected range: 1440 – 1456

Resistance: 1452, 1454, 1456
Support: 1440, 1442, 1446

Stocks to watch: HIBISCS, HIBISCS-WA, JCY

FBM KLCI - pullback correction

Stocks on Bursa Malaysia ended lower yesterday in line with other regional bourses as investors took profits on the back of heightened Euro-zone debt crisis worries. Heavyweights such as Sime Darby and Tenaga, which contribute significant weightage to the FBM KLCI, were among the top losers. The FBM KLCI ended the day 25.41 points or 1.73% lower at 1,439.94 after opening 5.77 points lower at 1,459.58. Losers led gainers by 705 to 145 while 173 counters were unchanged. Total market volume dropped to 1.36 billion shares, valued at RM1.37 billion, from Monday's 1.78 billion shares worth RM1.75 billion.

Following the weak performance on Wall Street overnight, the FBM KLCI opened 5.77 points lower at 1,459.58 and continued to slide lower throughout the day to hit the intra-day low of 1,433.97, losing 31.38 points at its worst, before rebounding slightly near closing on bargain hunting of selected heavyweights. Chart-wise, the FBM KLCI formed a bearish long black candlestick which indicates heavy selling pressure and sellers were dominant. The key index has closed the gap formed on Monday which indicates exhaustion of the recent rally, and hence, the index might continue to correct or consolidate itself. Immediate support is at 1,433, if this support level could not hold, then the key index might revisit the 1,423 support level.

MACD continued to climb higher and has crossed the zero-line, flashing a buy signal. However, its histogram has turned shorter, indicating a reduction in the upward momentum. RSI (14) has turned down drastically to 54.9, indicating the short term relative strength has fallen back to be mildly bullish from the bullish state on Monday. Stochastic was lower at 90.7, and has crossed below the slow stochastic line, reflecting the pullback correction as forecasted. Readings from the indicators showed that the FBM KLCI is undergoing a short term pullback correction; nonetheless, as the short term undertone has turned mildly bullish, the key index might continue its upward move after the correction is over.

The short term trend of the FBM KLCI remained up, while the medium trend has again turned down, as the key index was again closing below the 50 and 60-day moving averages, and the long term outlook remained bearish technically. Immediate overhead resistance zone is at 1,448 to 1,466 while the downside support zone is at 1,433 to 1,420. With the overall volume staying above the 1 billion shares mark, the market is likely to remain mildly active with rotational play on the second and third liners. Overnight, the Dow rose +180.05 points or +1.58% to close at 11,577.05. Today, the FBM KLCI is likely to trade within a range of 1,403 to 1,486.

This week's expected range: 1371 – 1504
Today’s expected range: 1403 – 1486

Resistance: 1455, 1470, 1486
Support: 1403, 1418, 1429

FBM KLCI - turning bullish for the short term

Stocks on Bursa Malaysia continued its upward trend as concerns over the Euro-zone debt crisis began to ease. Persistent buying was noted in three heavyweight counters – Sime Darby, Tenaga and Petronas Chemicals – which pushed the FBM KLCI 22.92 points or 1.59% higher to close at 1,465.35. The barometer index, which opened 9.54 points higher at 1,451.97, moved between 1,451.97 and 1,465.48 throughout the day. Gainers thumped losers by 731 to 155 while 209 counters were unchanged. Total market volume improved to 1.78 billion shares, worth RM1.752 billion, from last Friday’s 1.075 billion units valued at RM1.223 billion.

Taking cue from the strong performance of Wall Street last Friday, the FBM KLCI opened with an up gap of 9.54 points at 1,451.97, the low of the day, and climbed to the morning session high of 1,461.84 before pulling back on profit taking to move sideways. Some late buying of selected heavyweights again pushed the key index to close near the day’s high. Chart-wise, the FBM KLCI formed a bullish white Marubozu candlestick which indicates the bulls were fully in control with euphoria built on optimism that the Euro-zone debt crisis is easing. The key index has now broken the resistance posted by the 60-day moving average (MA) at 1,462 and is facing the 360-day MA resistance at 1,467. If the key index is able to break above the 360-day MA decisively, then there is a high likelihood that it will move higher to test the 1,500-point psychological resistance.

MACD continued to climb higher, and is approaching the zero-line, indicating a continued increase in the upward momentum. RSI (14) was also higher at 63.2, indicating the short term relative strength of the FBM KLCI has turned bullish. Stochastic has tapered off and was flat at 98.4, indicating the key index is very strong, but was short term overbought, and a pullback correction is impending. Readings from the indicators showed that the FBM KLCI is turning bullish for the short term and the upward momentum is building up. However, some pullback is likely to occur as the index is short term overbought.

The short term trend is up and bullish, and the medium term trend has also just turned up as the FBM KLCI has closed above the 50 and 60-day medium term MA. The long term trend, has turned sideways as all the long term moving averages are turning flat now. Nevertheless, the long term outlook is still bearish technically, as the key index remained below the long term moving averages. Immediate overhead resistance zone is at 1,467 to 1,484 while the immediate downside support zone is at 1,450 to 1,436. With the volume growing above 1.7 billion shares, the market is likely to remain active with rotational play.

Overnight, the Dow fell -247.49 points or -2.13% to close at 11,397.00. Today, the FBM KLCI is likely to trade within a range of 1,442 to 1,479.

This week's expected range: 1371 – 1504
Today’s expected range: 1442 – 1479

Resistance: 1470, 1475, 1479
Support: 1442, 1447, 1456

FBM KLCI - likely to correct before uptrend continue

Stocks on Bursa Malaysia ended mixed to easier last Friday on profit-taking activities in blue-chip counters. The market's direction was underpinned by waned investor sentiment following weak Chinese trade data, and after Spain's long-term debt rating cut by Standards & Poor's, however, the undertone of the local bourse remained firm, while anticipation over talks of an impending general election saw some UMNO-related stocks recording gains. The FBM KLCI ended 2.44 points or 0.17% lower at 1,442.43 after opening 2.30 points higher at 1,447.17, week-on-week, the benchmark index gained 42.38 points, or 3%, from previous Friday’s 1,400.05. Losers led gainers by 368 to 365 while 260 counters were unchanged. Turnover declined to 1.074 billion shares valued at RM1.223 billion from 1.506 million shares worth RM1.957 billion registered on Thursday. Weekly turnover increased to 5.305 billion shares worth RM6.485 billion from 4.08 billion shares worth RM6.17 billion last week.

On the weekly chart, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control for the week, and it had risen for three consecutive weeks. The upward momentum may continue into next week, but the key index may face strong resistance at the 1,450 to 1,484 zone. The 80-week moving average at 1,461 may particularly post as a strong resistance. On the daily chart, the FBM KLCI formed a bearish black hanging-man candlestick, which is a top reversal candle pattern, after three consecutive days of strong up move; this indicates that the key index may stage a pullback towards the immediate support level at 1,420 before continuing its uptrend.

Weekly MACD hooked up for the first time after crossing below the signal-line on the 29th July 2011, indicating a turn up in the momentum. Nonetheless, it is still below the signal-line, and could be just a rebound. Daily MACD has continued to climb higher, indicating a continuation in the daily upward momentum. Weekly RSI (14) was higher at 43.1 from 34.3 the previous week, indicating an improvement in the weekly relative strength. However, it is still in the mildly bearish zone. Daily RSI (14) has hooked down gently to 57.9, reflecting the mild pullback on the key index, and is still in the mildly bullish zone. Weekly Stochastic continued to climb higher to 34.7 after crossing over the weekly slow stochastic line last week, indicating a continuation in the weekly up cycle and improvement in the weekly market strength. Daily Stochastic, however, has hooked down gently to 98.4 after hitting the deeply overbought value of 98.9 on Thursday. Readings from the indicators showed that the weekly technical has just started to turn mildly positive, while the daily is turning bullish and overbought.

The short term trend of the FBM KLCI remained up while the medium and long term trend is still down. For the coming week, the FBM KLCI is likely to undergo a pullback correction, which should be shallow given the improving market undertone, better external sentiment on hopes the Euro-zone debt crisis is easing and increasing buying momentum on lower liners and penny stocks. The short term uptrend shall continue after the correction is over. With the volume staying above the 1 billion shares mark, the market is likely to remain active with rotational play on the second and third liners. Immediate strong overhead resistance zone is at 1,450 to 1,484 while the downside support zone is at 1,420 to 1,400.

Last Friday, the Dow rose +166.36 points or +1.45% to close at 11,644.49. This week, the FBM KLCI is likely to trade within a range of 1,371 to 1,504, and for today, it is likely to trade within a range of 1,424 to 1,460.

This week's expected range: 1371 – 1504
Today’s expected range: 1424 – 1460

Resistance: 1448, 1454, 1460
Support: 1424, 1430, 1436

FBM KLCI - higher on buying support

Stocks on Bursa Malaysia ended broadly higher yesterday amid rising confidence of a rescue plan to combat the Euro zone debt crisis. Strengthening investors’ confidence in European leaders who are nearing a plan to tame the debt crisis lifted world equity markets, which supported the local bourse. The FBM KLCI rose 16.37 points or 1.15% to close at 1,444.87 after opening 3.19 points higher at 1,431.69. Advancers led decliners by 677 to 174 while 233 counters were unchanged. Volume rose to 1.506 billion shares, worth RM1.957 billion, from Wednesday’s 1.079 billion shares worth RM1.296 billion.

Taking cue from the strong performance on Wall Street overnight, the FBM KLCI opened with an up gap of 3.19 points at 1,431.69 and climbed to the intra-day high of 1,445.43 at late afternoon. It was hovering between 1,438 and 1,445 for majority of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates that the bulls were in control. However, intra-day chart showed that the key index faced strong resistance at 1,445-point level. With the bullish up move yesterday, the FBM KLCI is likely to move higher today to test the psychological resistance level of 1,450.

MACD was higher, indicating a continued improvement in the upward momentum. However, as it is still below the zero-line, the broader picture is still bearish, and the current uptrend may just be a bear market rally. RSI (14) was higher at 58.8, is still in the mildly bullish zone, and indicates an improvement in the short term relative strength to the positive side. Stochastic continued to climb higher to 98.9, indicating a very strong market strength and continuation of the up cycle, nonetheless, it was deep into the short term overbought zone. Readings from the indicators showed that the FBM KLCI is turning bullish for the short term, but the overbought situation on the stochastic may forewarn of an impending pullback correction.

The short term trend of the FBM KLCI is currently up, while the medium and longer term trend remained down. The key index was closing above all the short term moving averages (MA) but remained below the medium to long term MAs. Immediate overhead resistance zone is at 1,447 to 1,466 posted by the medium term 50 and 60-day MAs, while the immediate downside support zone is at 1,430 to 1,420. As the volume continued to grow above the 1 billion shares mark, the overall market is likely to remain active with second and third liners doing a catch up. Overnight, the Dow fell -40.72 points or -0.35% to close at 11,478.13. Today, the FBM KLCI is likely to trade within a range of 1,420 to 1,460.

This week's expected range: 1336 – 1452
Today’s expected range: 1420 – 1460

Resistance: 1450, 1455, 1460
Support: 1420, 1425, 1435

FBM KLCI - turning bullish for the short term

Stocks on Bursa Malaysia closed on a firmer note yesterday, in tandem with the rebound in share prices on most regional markets. The local bourse received a boost after China's shares rebounded and on anticipated hopes that Slovakia would enact a Euro-zone rescue fund by the end of this week. The local equity market was buoyed by the sentiment of optimism in the region, including China's move to buy bank shares. A bullish anticipation that the general elections will be soon, also contributed to the market's performance yesterday. The benchmark FBM KLCI rose 16.85 points or 1.19% to close at 1,428.5, after opening 2.75 points better at 1,414.4. Gainers thumped losers by 558 to 177 while 272 counters were unchanged. Turnover improved to 1.08 billion shares worth RM1.30 billion from the 1.06 billion shares worth RM1.38 billion on Tuesday.

The FBM KLCI opened 2.75 points higher at 1,414.40 but experienced heavy profit-taking activity which sent the key index to the intra-day low of 1,402.08 within the first fifteen minutes. The key index rebounded strongly and gradually moved upward with intermittent mild pullback to finish the day at the highest point of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were very much in control for the day. As mentioned in yesterday’s analysis, the key index will rally higher if it breakthrough the resistance zone at 1,415 to 1,423, and it did. The strong buying momentum is likely to carry the FBM KLCI higher to test the next higher target of 1,442 and 1,450.

MACD continued to climb higher, indicating a continued increased in the upward momentum. Nonetheless, as it is still below the zero-line, the present up move may just be a bear market rally. RSI (14) was higher at 54.7, indicating the FBM KLCI had turned mildly bullish for the first time after it moved below the 50-level and turned bearish on 18/07/2011. Stochastic surged higher to 91.5, indicating very strong market strength and a continuation of the short term bullish up cycle. Readings from the indicators showed that the FBM KLCI is turning bullish for the short term, and the upward momentum may push the key index higher.

The short term trend of the FBM KLCI has turned up, while the medium and long term trend remained down. The key index is currently closing above the short term 5, 10, 20 and 30-day moving averages (MA), and is likely to move higher to test the medium term 50-day MA at 1,450 and strong resistance is anticipated at the 1,450 to 1,468 zone. With the volume going above the 1 billion shares mark, the overall market is likely to remain active. Overnight, the Dow rose +102.55 points or +0.90% to close at 11,518.85. Today, the FBM KLCI is likely to trade within a range of 1,393 to 1,455.

This week's expected range: 1336 – 1452
Today’s expected range: 1393 – 1455

Resistance: 1438, 1446, 1455
Support: 1393, 1410, 1415

Stocks to watch: SUNWAY, MUHIBAH, MBSB, MHB

FBM KLCI - higher on buying support

Stocks on Bursa Malaysia staged a rebound yesterday to end firmer, after beginning the week in the red, and against a mixed global equity market. World stocks, which were on a rally yesterday, slipped into mixed trading with players cautious ahead of the European Union's bailout vote. The FBM KLCI rose 14.61 points or 1.05% to end at 1,411.65, after opening 9.95 points better at 1,406.99. Gainers thumped losers by 593 to 171 while 248 counters were unchanged. Turnover rose to 1.060 billion shares worth RM1.376 billion compared with 548 million shares worth RM632 million on Monday.

Taking cue from the strong performance on Wall Street overnight, the FBM KLCI opened with an up gap of 9.95 points at 1,406.99 and surged to the morning session high of 1,412.18, it pulled back to moved sideways for the rest of the morning. The key index climbed to the intra-day high of 1,414.74 in the afternoon session but profit-taking activity pressed it to close off high. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control for the day. The key index closed just above the horizontal resistance level at 1,410, which is also the 23.6% Fibonacci retracement level measuring from the low of 801 to 1,597. It may continue the up move to test the next higher target level of 1,420. However, the 30-day moving average (MA) at 1,415 may continue to exert selling pressure.

MACD continued to move higher, indicating a continued increased in the short term upward momentum. RSI (14) was higher at 50.1, back to the neutral zone. If RSI is able to go above the 50 level, further upside in the FBM KLCI can be expected. Stochastic was higher at 84.5, indicating an improvement in the market strength, but it has also moved into the short term overbought zone, hence, some pullback is expected. Readings from the indicators showed that the FBM KLCI is gradually turning bullish for the short term; nonetheless more data is needed to confirm this.

The medium and long term trend of the FBM KLCI remained down. Nonetheless, the short term trend has turned up, as the key index is now closing above the 5, 10 and 20-day MAs, and it has also breakout from the downtrend channel. Immediate strong overhead resistance zone is at 1,415 to 1,423. If the FBM KLCI is able to breakthrough this zone, then there is a high likelihood that it may rally towards the next target at 1,450. Immediate downside support zone is at 1,406 to 1,400. Overnight, the Dow fell -16.88 points or -0.15% to close at 11,416.30. Today, the FBM KLCI is likely to trade within a range of 1,399 to 1,423.

This week's expected range: 1336 – 1452
Today’s expected range: 1399 – 1423

Resistance: 1415, 1419, 1423
Support: 1399, 1403, 1407

FBM KLCI - pullback on profit-taking

Stocks on Bursa Malaysia closed lower yesterday weighed down by losses in plantation counters. Plantation companies were the biggest losers after the Malaysian Palm Oil Board released data indicating that Malaysia's September crude palm oil production rose 12.12 per cent, month-on-month, to 1.869 million tonnes and stockpile increased 12.4 per cent to 2.119 million tonnes while exports fell 8.8 per cent to 486,882 tonnes. The FBM KLCI fell 3.01 points or 0.21% to 1,397.04 after hovering between 1,392.10 and 1,399.35 throughout the day. Losers outnumbered gainers by 335 to 278 while 267 counters were unchanged. Total market volume decreased to 584.909 million shares, worth RM632.688 million, from Friday’s 964.611 million units valued at RM1.31 billion.

The FBM KLCI opened 1.43 points lower at 1,398.62 and plunged to the intra-day low of 1,392.10 within the first fifteen minutes after opening. It then rebounded to the intra-day high of 1,399.35 but continued to face selling pressure which pressed it to hover near the low throughout the day before a last minute buying on selected blue-chips which lifted it to close at 1,397.04. Chart-wise, the FBM KLCI formed a black hanging man candlestick which indicates the surfacing of selling pressure, and as the key index was trading within the previous day’s candle range, it was consolidating itself after the recent rally. The FBM KLCI might continue to consolidate until a clear breakout sign either up or down is observed.

MACD continued to climb higher, indicating a continued increased in the upward momentum. Nonetheless, the MACD is still in the bearish zone. RSI (14) hooked down slightly to 45.5 reflecting the mild pullback in the key index, and the relative strength continued to remain mildly bearish. Stochastic continued to climb higher to 74.7, indicating a continuation in the short term up cycle as well as improvement in the market strength. Readings from the indicators showed that the momentum of the FBM KLCI is gradually picking up even though the overall picture is still a bit bearish.

The medium and long term trend of the FBM KLCI remained down, while the short term trend is up despite the mild pullback yesterday. As the FBM KLCI is currently above the 5 and 10-day moving averages (MA), but is below the 20 and 30-day MAs, the key index is likely to move range bound with an upward bias in the short term. Immediate overhead resistance zone is at 1,403 to 1,423 while the immediate downside support zone is at 1,391 to 1,380. Overnight, the Dow rose +330.06 points or +2.97% to close at 11,433.18. Today, the FBM KLCI is likely to trade within a range of 1,385 to 1,407.

This week's expected range: 1336 – 1452
Today’s expected range: 1385 – 1407

Resistance: 1400, 1403, 1407
Support: 1385, 1388, 1392

Stocks to watch: JCY, UNISEM, TGOFFS

FBM KLCI - likely to continue its short term uptrend

Stocks on Bursa Malaysia ended higher last Friday as the market reacted positively to the government's 2012 Budget. The market was bolstered by the government's move to liberalize 17 services sub-sectors in phases next year, which include private hospital services, medical and dental specialist services, engineering, accounting and taxation, and legal services. The Prime Minister also forecast Malaysia's GDP is to grow 5 to 6 per cent next year. Overall market sentiment was positive. The FBM KLCI rose 6.36 points to 1,400.05, and week-on-week, it gained 12.19 points or 0.93% from 1,387.13 the previous Friday. Gainers beat losers by 373 to 341 while 271 counters were unchanged. Turnover declined to 964.61 million shares worth RM1.31 billion from 994.17 million shares valued at RM1.39 billion on Thursday. Weekly volume decreased to 4.08 billion shares valued at RM6.17 billion from previous week’s 4.82 billion shares worth RM8.11 billion.

Following the slump on Wall Street the previous Friday, the FBM KLCI kicked off the month of October with a down gap of 5.32 points at 1,381.81 and slid to the intra-week low of 1,353.45 before recovering to close 19.61 points lower at 1,367.52 on Monday. The benchmark index continued with its downtrend on Tuesday to close another 6.14 points lower at 1,361.38 after hitting the intra-day low of 1,356.77. On Wednesday, the FBM KLCI took the cue from the overnight gain on Wall Street to close 14.29 points higher at 1,375.67. The rebound continued into Thursday, ahead of the 2012 Budget announcement on Friday, which saw the FBM KLCI ended 18.02 points steadier at 1,393.69. The up move continued into Friday with the benchmark index hitting the intra-week high of 1,402.58 before closing off high at 1,400.05, making another 6.36 points gain.

On the weekly chart, the FBM KLCI formed a white hangman-like candlestick which indicates the bears were initially strong in pushing the key index down, but later the bulls lifted the index to close near the high. The key index may continue its upward momentum to move higher this week, but it is likely to meet with strong resistance at the 1,410 to 1,423 zone. On the daily chart, the FBM KLCI formed a white hanging-man candlestick, which is a top reversal candles pattern, and it indicates heavy profit-taking activity after rising strongly for two consecutive days, but the bulls managed to give support to the key index to close at the critical psychological resistance level of 1,400-point. Judging from the candlestick formed, the upward momentum is reducing, and the FBM KLCI may goes into consolidation.

Weekly MACD continued to slide lower, but the histogram was turning shorter upward, indicating a reduction in the weekly bearish momentum. Daily MACD, on the other hand, continued to move higher after making a golden-cross, indicating a continued increase in the daily upward momentum. However, as both weekly and daily MACD are still below the zero-line, the present upswing is considered just a technical rally in a bear market. Weekly RSI (14) continued to move higher to 34.4 from 31.4 the previous week, indicating an improvement in the weekly relative strength even though it is still in the bearish zone. Daily RSI (14) also continued to climb higher to 46.3, and has moved from the bearish zone into the mildly bearish zone after more than two months of being bearish to very bearish. Weekly Stochastic was higher at 21.4, and has crossed above the slow stochastic line, indicating a possible beginning of an up cycle. Daily Stochastic continued to climb higher to 64.6, indicating the short term market strength is beginning to turn strong. Readings from the indicators showed that the FBM KLCI is gradually moving out of its bearish state to turn strong for the short term, and this may offer some short term trading opportunity.

The medium to long term trend of the FBM KLCI is still down. However, the short term trend has turned upward as the key index is now closing above the 5, 10 and 20-day moving average (MA). If it is able to move above the 30-day MA at 1,420-point, then the short term trend is confirmed to be up, and the benchmark index may rally towards the psychological resistance level of 1,450. Meanwhile, as the Budget 2012 was announced without much goodies to the business sectors, the pre-budget rally may fizzles off; however, with debt crisis in the West showing signs of stabilising, the market may move range-bound with an upward bias this week. Immediate overhead resistance zone is at 1,410 to 1,423, while the downside support zone is at 1,391 to 1,380.

Last Friday, the Dow fell -20.21 points or -0.18% to close at 11,103.12. This week, the FBM KLCI is likely to trade within a range of 1,336 to 1,452, and for today, it is likely to trade within a range of 1,382 to 1,414.

This week's expected range: 1336 – 1452
Today’s expected range: 1382 – 1414

Resistance: 1405, 1410, 1414
Support: 1382, 1386, 1393

FBM KLCI - uptrend continued

Stocks on Bursa Malaysia ended higher yesterday, extending gains from the day before, ahead of today's 2012 Budget announcement. Overall market sentiment remained positive, and almost all sectors regained strength after the recent losses with consumer and finance stocks leading the market recovery. The FBM KLCI ended 18.02 points steadier at 1,393.69 after opening 5.5 points higher at 1,381.17. Market breadth was positive with gainers led losers by 535 to 186 while 257 counters were unchanged. Turnover rose to 994.17 million shares, valued at RM1.39 billion, from Wednesday's 697.59 million shares worth RM1.09 billion.

The FBM KLCI opened with an up gap of 5.5 points at 1,381.17 and climb to the intra-day high of 1,395.28 within the first hour of trading. The key index pulled back on mild profit-taking activity and was hovering between 1,387.07 and 1,395.28 for the rest of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control for the day, and the market continues the reversal of the previous day. It is likely that the upward momentum will be carried through today to move the key index higher. Immediate strong overhead resistance levels are at 1,400, 1,410 and 1,420.

MACD continued to climb higher after making a golden-cross yesterday, indicating an increase in the upward momentum. RSI (14) was higher at 44.4, indicating the key index’s relative strength was turning from bearish to mildly bearish. Stochastic has turned upward to 49.6, indicating a resumption of the short term up cycle. Readings from the indicators showed that the FBM KLCI is gradually turning positive, and the momentum is also picking up, which is likely to carry the key index higher.

The main trend of the FBM KLCI remained down. However, with the key index closing above the 10-day moving average (MA) decisively yesterday, the short term trend has turned up. Nonetheless, as the FBM KLCI is still staying below the 20 and 30-day MAs which are currently at 1,402 and 1,422, the current up swing may just be part of a technical rebound in a bear market. If only the FBM KLCI is able to move above the 30-day MA at 1,422, the short term trend would be considered reversed. Immediate overhead resistance zone is at 1,400 to 1,420, while the downside support zone is at 1,381 to 1,365.

Overnight, the Dow rose +183.38 points or +1.68% to close at 11,123.33. Today, the FBM KLCI is likely to trade within a range of 1,370 to 1,410.

This week's expected range: 1274 – 1460
Today’s expected range: 1370 – 1410

Resistance: 1399, 1405, 1410
Support: 1370, 1375, 1384

FBM KLCI - reversed up

Stocks on Bursa Malaysia closed broadly higher yesterday after two days of selling, underpinned by strong buying in selected blue chips, as overnight gains on the US equity indices and regional markets improved appetite for higher risk. The FBM KLCI rose 14.29 points or 1.05% to 1,375.67 after opening 3.41 points higher at 1,364.79. Overall market sentiment was positive with gainers leading losers by 435 to 247 while 263 counters were unchanged. Turnover was lower at 697 million shares worth RM1.089 billion compared with 795 million shares worth RM1.237 billion on Tuesday.

Taking cue from the overnight gains on Wall Street, the FBM KLCI opened 3.41 points higher at 1,364.79 and surged to the morning session high of 1,374.64 within the first fifteen minutes, and profit-taking activity kept the index in a sideways range. The afternoon session saw the key index climbed to the intra-day high of 1,379.12 but eased back to close off high at 1,375.67. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control for the day. The bullish up move indicates a reversal after two days of consecutive declines, and is likely to continue to move higher today. Immediate overhead resistance zone is at 1,380 to 1,400.

MACD has turned upward and made a golden cross above the signal-line, issuing a buy signal. Nonetheless, as the MACD is still below the zero-line, the current upturn may well be just part of a technical rebound within a major downtrend. RSI (14) hooked upward to 38.6, indicating an improvement in the short term relative strength even though it is still in the bearish zone. Stochastic was at 40.9, and has turned flat, indicating a pause in the downward move. Readings from the indicators showed signs of the FBM KLCI turning positive.

The main trend of the FBM KLCI remained down. However, the price action of the key index yesterday showed sign of reversal, as it was closing above the short term 10-day moving average (MA). With follow through buying, the FBM KLCI is likely to move higher to test the 20-day MA which is currently at 1,405. Nonetheless, in order to reverse the downtrend, the key index must at least close above the 1,420-point level. Overnight, the Dow rose +131.24 points or +1.21% to close at 10,939.95. Today, the FBM KLCI is likely to trade within a range of 1,352 to 1,394.

This week's expected range: 1274 – 1460
Today’s expected range: 1352 – 1394

Resistance: 1382, 1388, 1394
Support: 1352, 1358, 1367

Stocks to watch: GAMUDA, SUNWAY, UOADEV

FBM KLCI - lower on continued selling pressure

Stocks on Bursa Malaysia finished lower yesterday as the market failed to sustain its upward momentum due to continuous selling pressure. Many investors were nibbling on cheap stocks when the benchmark index was hovering around 1,372.63 mid-afternoon but interest tapered off thereafter as most indices slipped into the negative territory in line with the trend in regional markets. The FBM KLCI finished 6.14 points or 0.4% lower at 1,361.38, after opening 5.36 points lower at 1,362.16. Decliners led advancers 368 to 298 while 271 counters were unchanged. Turnover rose to 795.03 million shares, valued at RM1.24 billion, from 631.32 million shares, worth RM1.14 billion, transacted on Monday.

Taking cue from the weak performance on Wall Street overnight, the FBM KLCI opened with a down gap of 5.36 points at 1,362.16 and slipped to the intra-day low of 1,356.77 within the first five minutes. The key index then recovered its lost ground gradually and touched the intra-day high of 1,375.02 at mid-afternoon before selling pressure brought it down to close at 1,361.38. Chart-wise, the FBM KLCI formed a Doji candlestick with a longer upper shadow and short lower shadow. The appearance of Doji indicates indecision of market direction. The short lower shadow indicates selling pressure was not very strong, while the longer upper shadow showed that there was some buying interest coming in to bargain hunt. Hence, the key index might take a pause here, and may move range-bound with immediate overhead resistance zone at 1,375 to 1,381, and the downside support zone at 1,356 to 1,350.

MACD was flat, indicating a pause in the momentum. Nonetheless, as the MACD is still below the zero-line and its signal-line, the overall picture is still bearish. RSI (14) was slightly lower at 33.5, remained in the bearish state. Stochastic was at 41.5, and has hooked downward, indicating the end of the recent short term up cycle. Readings from the indicators showed that the FBM KLCI is still in a bearish state, and the consolidation may prolong.

The main trend of the FBM KLCI remained down, and the key index is at a critical level now, as a break below the 1,350-point psychological support level will likely see the key index sliding lower to re-test the critical support zone of 1,310 to 1,300. In order to reverse the current downtrend, the FBM KLCI will have to at least move above the 1,420-point level. Overnight, the Dow rebounded +153.41 points or +1.44% to close at 10,808.71. Today, the FBM KLCI is likely to trade within a range of 1,335 to 1,393.

This week's expected range: 1274 – 1460
Today’s expected range: 1335 – 1393

Resistance: 1372, 1382, 1393
Support: 1335, 1346, 1353

FBM KLCI - downtrend continue

Stocks on Bursa Malaysia closed lower on selling pressure yesterday, following Wall Street's slump last week. The bourse was dragged down by weak regional market sentiment, as the market is concerned about the global economy as it may be heading for another recession as Europe's debt crisis worsens and US economic growth slows. The FBM KLCI fell 19.61 points, or 1.41%, to close at 1,367.52 after opening 5.32 points lower at 1,381.81. Decliners thumped advancers by 560 to 167 while 201 counters were unchanged. Turnover declined to 631.32 million shares worth RM1.14 billion from 1.1 billion shares worth RM1.85 billion last Friday.

The FBM KLCI opened with a gap down of 5.32 points at 1,381.81 and slid lower to hit the intra-day low of 1,353.45, losing 33.68 points at its worst, before rebounding in the last hour on bargain hunting activity to close off low at 1,367.52. Chart-wise, the FBM KLCI formed a bearish black candlestick which closed at the mid-point of yesterday’s trading range. This showed the bears were initially strong in pushing down the key index, but later the bulls came in to bargain hunt, nonetheless the buying momentum was not strong enough to push the index higher. The price action yesterday confirmed the reversal signal generated by the black spinning-top candlestick formed last Friday, and the FBM KLCI is likely to continue its downtrend today.

MACD was almost flat, indicating a pause in the upward momentum generated by the technical rebound. RSI (14) has turned downward to 34.7, reflecting the weakness, and the key index continued to remain in the bearish zone. Stochastic was marginally higher at 44.9, but is tapering off, indicating a possible end of the technical rebound. Readings from the indicators showed that the FBM KLCI continued to remain bearish and weak, and the correction process may prolong.

The main trend of the FBM KLCI remained down and bearish. With the reversal yesterday, it spelled the end of the short term uptrend, and the key index is likely to further correct itself. Immediate support zone is envisaged at 1,353 to 1,331, with the next critical support level at 1,310. If the 1,310-point support level could not hold, then the key index is likely to move lower to test the 38.2% Fibonacci retracement (FR) level at 1,293, based on the measurement from the 801.27 low on 28/10/2008 to the 1,597.08 high on 11/7/2011, and the possibility of the FBM KLCI correcting further downward to the 50% FR level of 1200-point cannot be ruled out.

Overnight, the Dow fell -258.08 points or -2.36% to close at 10,655.30. Today, the FBM KLCI is likely to trade within a range of 1,324 to 1,410.

This week's expected range: 1274 – 1460
Today’s expected range: 1324 – 1410

Resistance: 1382, 1396, 1410
Support: 1324, 1339, 1353

FBM KLCI - a choppy week ahead

Stocks on Bursa Malaysia closed mostly higher in choppy trading last Friday. However, sentiment remained cautious in view of the poor performance in regional markets which were affected by the weak global economic outlook. This is in spite of positive US economic news and support given by the German authorities to increase Eurozone rescue funds. The FBM KLCI fell 0.33 point to close at 1,387.13 after opening 3.12 points higher at 1,390.58, and week-on-week, it gained 21.19 points or 1.55% from 1,365.94 registered on previous Friday. Gainers beat losers by 389 to 377, while 271 counters were unchanged. Turnover increased to 1.099 billion shares worth RM1.848 billion from 920.957 million shares worth RM1.366 billion on Thursday. Weekly volume increased to 4.825 billion shares, worth RM8.11 billion, from previous week’s 4.039 billion shares, worth RM7.481 billion.

The FBM KLCI opened with a down gap of 8.20 points at 1,357.74 on last Monday and slid lower to hit the intra-week low of 1,310.53, losing as much as 55.41 points at its worst before bargain hunting activity lifted it to close off low with a loss of 34.14 points at 1,331.80. The FBM KLCI rebounded on Tuesday prompted by renewed hopes that European officials would take bold steps to resolve the debt crisis, and the index recoup 32.40 points to close at 1,364.20. The key index continued to climb on Wednesday to close 7.35 points higher at 1,371.55 amid cautious sentiment. On Thursday, the benchmark index extended its gains to close 15.91 points higher at 1,387.46, moving in tandem with the rebound on other Asian equity markets, driven by hope that German authorities would approve an increase in Euro zone rescue funds. Profit-taking kept gains in check on Friday as the FBM KLCI retraced from an intra-week high of 1,403.01 to close mixed ahead of the weekend.

On the weekly chart, the FBM KLCI formed a piercing-line candlestick which is a bottom reversal candle pattern. However, as the present week candlestick could not close above the mid-point of the previous week’s candle at 1,396.14, the strength of the reversal is on the weak side. On the daily chart, the key index formed a black spinning-top candlestick with long upper and lower shadow, indicating a very volatile trading day on Friday. The appearance of a spinning-top candlestick after three consecutive days of up move indicates the market was taking a pause, and may turn southward on continue profit-taking correction. Signals from both the weekly and daily candlesticks indicate that the FBM KLCI might move range-bound this week. Immediate overhead resistance zone is envisaged at 1,400 to 1,420, while the downside support zone is at 1,350 to 1,310.

Weekly MACD continued to slide lower, indicating continued loss in the weekly momentum. On the other hand, daily MACD continued to move higher, indicating an improvement in the daily upward momentum. However, as the daily MACD is still below the zero-line as well as the signal-line, the present up move is considered a technical rebound. Weekly RSI (14) has hooked up to 31.4 from 26.3 the previous week, reflecting the rebound, and the weekly relative strength is still bearish. Daily RSI (14) was almost flat at 38.61, reflecting the mild pullback in the key index, and the daily relative strength remained in the bearish zone, but has made great improvement from the deeply oversold (extremely bearish) value of 17.9 registered on September 26th. Weekly Stochastic has hooked up slightly to 13.1 from 10.3 the previous week, indicating the weekly market strength is still very weak and the weekly down cycle is still intact. Daily Stochastic, however, had continued to climb higher to 43.4, indicating the daily up cycle is in continuation. Readings from the weekly and daily indicators showed that the FBM KLCI is currently undergoing a rebound in the daily scenario, while in the weekly scenario, the key index is still very weak, and the bearish down cycle is far from over.

The main trend of the FBM KLCI remained down. However, the very short term trend has turned upward as the key index had closed above the 10-day moving average (MA) for the first time in three weeks. Nonetheless, as the key index is still below the 20 and 30-day MA, the present up swing may encounter resistance from the 20-day MA presently at 1,420. In order to reverse its short term down trend, the FBM KLCI will have to close above the 30-day MA currently located at 1,438. For the coming week, the FBM KLCI is likely to be range-bound in choppy trade, as external factors continue to influence its performance. At the mean time, the up coming budget to be tabled by PM Najib this coming Friday, 7th October may help to keep the index afloat.

Last Friday, the Dow fell -240.60 points or -2.16% to close at 10,913.38. This week, the FBM KLCI is likely to trade within a range of 1,274 to 1,460, and for today, it is likely to trade within a range of 1,346 to 1,431.

This week's expected range: 1274 – 1460
Today’s expected range: 1346 – 1431

Resistance: 1402, 1416, 1431
Support: 1346, 1361, 1374