FBM KLCI - higher on bargain hunting

Stocks on Bursa Malaysia closed higher yesterday buoyed by positive global sentiment which prompted investors to seek bargains among beaten-down stocks. The local bourse’s positive momentum was in tandem with major Asian markets amid hopes that Euro-zone leaders would unveil fresh measures to resolve the debt crisis. Sentiment was further lifted by a robust US Thanksgiving weekend retail sales, as well as, a firmer overnight close on Wall Street. The benchmark FBM KLCI ended 13.17 points or 0.92% higher at 1,444.72 supported by institutional buying of finance stocks, it opened 6.22 points higher at 1,437.77. Gainers beat losers by 471 to 273 while 272 counters were unchanged. Turnover reduced to 1.304 billion shares valued at RM1.563 from last Friday’s 1.577 billion shares worth RM1.098 billion.

Taking cue from the strong overnight performance on Wall Street, the FBM KLCI opened 6.22 points higher at 1,437.77 and moved higher throughout the whole morning session. It touched the intra-day high of 1,458.00 after the opening bell in the afternoon session, but heavy profit-taking activity sent the key index to close off high at 1,444.72. Chart-wise, the FBM KLCI formed a white inverted hammer candlestick which indicates the bulls were initially strong in pushing the key index higher but later the bears surfaced to press it down. As the key index managed to hit the intra-day high of 1,458, but pulled back to close at 1,444.72, it showed the resistance zone at 1,448 to 1,463 is strong. If it is able to break through this immediate resistance zone, then it is likely to resume its short term uptrend. Nonetheless, the FBM KLCI is currently still in consolidation mode but with an upward bias.

MACD continued to slide lower into the bearish zone, but its histogram turned shorter upward, indicating a reduction in the index’s downward momentum. RSI (14) has hooked up to 47.2, indicating the relative strength of the key index is currently mildly bearish. Stochastic has turned upward to 25.9, indicating a resumption of the short term up cycle and improvement of the market strength. Mixed signals from the indicators showed that the FBM KLCI is likely to continue with its current consolidation process but with an upward bias.

The short term trend of the FBM KLCI has turned sideways as the key index is now congested in a trading range. The medium term trend has also turned sideways while the long term trend remained bearish. Immediate overhead resistance zone is at 1,448 to 1,463 while the immediate downside support zone is at 1,430 to 1,423. A break in either zone will likely see the FBM KLCI continue moving in that direction. Overnight, the Dow rose +32.62 points or +0.28% to close at 11,555.63, and today, the FBM KLCI is likely to trade within a range of 1,414 to 1,479.

This week's expected range: 1392 – 1480
Today’s expected range: 1414 – 1479

Resistance: 1456, 1468, 1479
Support: 1414, 1425, 1435

FBM KLCI - likely to extend consolidation

Stocks on Bursa Malaysia closed sharply lower last Friday ahead of the long weekend break and bearish regional Asian markets. Bursa Malaysia was closed yesterday for the Awal Muharram holiday. With no progress seen in the resolution of the Euro-zone debt crisis, Asian shares sank as deepening sovereign debt in the Euro-zone threatened economic growth globally. Selling pressure emerged in key heavyweights such as MISC and Telekom Malaysia, pushing the FBM KLCI 16.44 points or 1.13% lower to close at 1,431.55, its lowest level since October 13, and week-to-week, the key index declined 22.85 points from 1,454.40 on previous Friday. Decliners led advancers by 463 to 298 while 256 counters were unchanged. Total weekly volume declined to 7.27 billion shares worth RM5.51 billion from 10.92 billion shares worth RM7.29 billion the previous week.

On the weekly chart, the FBM KLCI fell for the fourth consecutive weeks since the key index hit the high of 1,493.28 on October 31st. It formed a bearish black candlestick with a down gap from previous week’s candle, indicating the index was driven down on fear and the pullback correction from previous week has continued. On the daily chart, the key index formed a bearish black Marubozu candlestick in Harami position which indicates the bear were selling down the index-link counters ahead of the long weekend. Judging from the candle formation on both the weekly and daily charts, the FBM KLCI is likely to continue to consolidate in the coming week.

Weekly MACD as well as the weekly histogram has turned downward, reflecting the pullback correction in the FBM KLCI. Daily MACD has crossed below the zero-line, indicating the key index has again turned bearish, flashing a sell signal. Weekly RSI (14) continued to slide lower to 41.9 and daily RSI (14) has hooked down to 42.1, indicating both the weekly and daily relative strength has continued to weaken and is approaching the bearish zone. Weekly Stochastic was at 72 and has tapered off, indicating a loss in the upward momentum, and was in consolidation. Daily Stochastic has hooked downward to 20.1, reflecting the pulled back in the key index. Readings from the weekly and daily indicators showed that the FBM KLCI is currently in consolidation state and is relatively weak, technically. Hence, the consolidation process might prolong.

The main trend of the FBM KLCI remained down and bearish. The key index has now pulled back about 38.2% of the range from the pivot low of 1,310.53 formed on September 26th to the pivot high of 1,493.28 on October 31st. If the support at the 38.2% Fibonacci retracement level of 1,423 could not hold, then it is highly likely that the FBM KLCI would slide further to the 50% retracement level at 1,401.

Overnight, the Dow rose +291.23 points or +2.59% to close at 11,523.01. This week, the FBM KLCI is likely to trade within a range of 1,392 to 1,480, and for today, it is likely to trade within a range of 1,409 to 1,464

This week's expected range: 1392 – 1480
Today’s expected range: 1409 – 1464

Resistance: 1443, 1453, 1464
Support: 1409, 1419, 1425

FBM KLCI - higher on a strong rebound

Stocks on Bursa Malaysia rebounded to close higher yesterday, helped by gains in banking stocks. Asian markets, with the exception of Japan, also bounced back from their recent losses to close higher on bargain hunting. Cautious sentiment, however, remained on growing concern over the impact of the Euro-zone debt crisis and the weak China’s manufacturing activities against the backdrop of a poor global economic outlook. The FBM KLCI rose by 14.82 points or 1.03% to close at 1,447.99 after opening 1.26 points lower at 1,431.91. Advancers led decliners by 499 to 277 while 289 counters were unchanged. Turnover, however, fell to 1.499 billion shares worth RM1.077 billion from Wednesday’s 1.508 billion shares worth RM1.127 billion.

The FBM KLCI opened 1.26 points lower at 1,431.91 and fell to the intra-day low of 1,426.64 within the first thirty minutes of trade, and it rebounded to gradually climb higher for the rest of the day to close at the day’s high. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates bottom reversal and a breakout from last two day’s consolidation range. With the bullish up move yesterday, the key index is likely to continue its upward momentum to move higher today. Immediate overhead resistance zone is at 1,450 to 1,460 with the gap area at 1,452 to 1,454 being the main hurdle.

MACD continued to slide lower and just crosses below the zero-line, flashing a bearish signal. However, the histogram has turned shorter upward, reflecting the rebound and indicating a reduction in the downward momentum. RSI (14) has turned upward to 47.5, indicating an improvement in the relative strength to mildly bearish. Stochastic has turned upward to 22.8, and crossed above the slow stochastic line, making a reversal after hitting the short term oversold zone, and this might possibly indicates the beginning of a short term up cycle. Readings from the indicators showed that the FBM KLCI has possibly hit a short term bottom and is making a rebound.

The main trend of the FBM KLCI remained down and bearish. However, for the short term, the key index has closed above the 5-day moving average (MA), giving out a first signal of a possible short term trend reversal. Nonetheless, the key index is still below the 10, 20 and 30-day MAs, until and unless the current rebound can carry the index through the resistance zone formed by these short term MAs at 1,457 to 1,468, the present rebound may turn out to be just a dead-cat-bounce in a bear market. With volume continued to shrink, the overall market may continued to be dominated by the second and third liners in the active scene while FBM KLCI may continue with its consolidation.

US market was closed yesterday for the Thanksgiving Holiday. Today, the FBM KLCI is likely to trade within a range of 1,412 to 1,470.

This week's expected range: 1410 – 1520
Today’s expected range: 1412 – 1470

Resistance: 1456, 1463, 1470
Support: 1412, 1419, 1433

FBM KLCI - lower amid bearish sentiment

Stocks on Bursa Malaysia ended lower yesterday as sentiment remained bearish amid concerns over a possible global economic recession. Regional markets also fell following weak China economic data and Europe and US debt crisis which were derailing growth in Asian countries. However, some bargain-hunting helped the FBM KLCI narrow losses with the market barometer closing 4.82 points or 0.34% easier at 1,433.17. Decliners led advancers by 450 to 281 while 271 counters were unchanged. Volume increased to 1.51 billion shares worth RM1.13 billion from 1.27 billion shares worth RM1.04 billion recorded on Tuesday.

The FBM KLCI opened 2.35 points lower at 1,435.64 on weak US market performance overnight, and plunged to the intra-day low of 1,424.19 at mid morning. It hovered near the low for a major part of the day, but late buying on selected blue-chips helped lift the key index to close off low at 1,433.17. Chart-wise, the FBM KLCI formed a black hammer-like candlestick which is a possible bottom reversal signal. However, the black body indicated that the market sentiment is bearish bias. From the candlesticks formed over the last two days, it looks like the FBM KLCI found some support when it approaches the 1,423-point pivot low support area. Nonetheless, the support zone at 1,423 to 1,420 is critical, if this zone cannot hold, it is highly likely that the key index will slide towards the critical psychological support level at 1,400.

MACD continued to slide lower towards the zero-line but is still marginally above it, indicating an increased in the downward momentum. RSI (14) hooked downward slightly to 41.2, indicating the short term relative strength of the FBM KLCI is at the borderline of the mildly bearish zone, and there is a high possibility of it turning bearish. Stochastic has gently hooked up to 11.4 after hitting the low of 8.8 the day before. Nonetheless, it is still below the slow stochastic line and is in the oversold zone, and the short term down cycle is still intact. Readings from the indicators showed that the FBM KLCI is currently weak, with a high possibility of turning more bearish.

The trend of the FBM KLCI remained down and bearish. However, the price action of the key index over the last two days showed that it is trying to stabilize at current level, but whether it can hold well at current level will very much depends on the development of external factors. Immediate downside support zone is at 1,423 to 1,400, while the overhead resistance zone is at 1,439 to 1,450.

Overnight, the Dow fell -236.17 points or -2.05% to close at 11,257.55. Today, the FBM KLCI is likely to trade within a range of 1,409 to 1,455.

This week's expected range: 1410 – 1520
Today’s expected range: 1409 – 1455

Resistance: 1441, 1448, 1455
Support: 1409, 1417, 1425

Stocks to watch: DIGISTA, DIGISTA-WA

FBM KLCI - rebounded to close marginally higher

Stocks on Bursa Malaysia closed mostly lower yesterday as sentiment remained cautious on renewed fears of a global recession. The concern follows the delay in resolving the Euro-zone debt crisis and a heavy US budget deficit. However, bargain-hunting in selected heavyweights helped push the FBM KLCI into positive territory, closing 3.91 points or higher at 1,437.99. Decliners led advancers 398 to 327, while 298 counters were unchanged. Volume was lower at 1.27 billion shares worth RM1.04 billion from 1.42 billion shares worth RM1.16 billion on Monday.

Taking cue from the almost 250 points dropped of the Dow, the FBM KLCI opened with a down gap of 3.28 points at 1,430.80 and plunged to the intra-day low of 1,425.47 in the first hour of trade. However, bargain-hunting on selected blue-chips lifted the key index off low to close near the intra-day high level. Chart-wise, the FBM KLCI formed a white piercing-line candlestick, which is a bottom reversal candle pattern. However, as the candlestick could not pierce above the mid-point of the previous day’s candlestick at 1,443.03, the rebound yesterday was considered a weak one. Nonetheless, the FBM KLCI might continue moving higher today with a follow through rebound, and the immediate overhead resistance is at 1,443-point level, follow by the psychological resistance level at 1,450.

MACD continued to slide lower, indicating an increased in the downward momentum. Nevertheless, it is still above the zero-line, and the current weakness is just part of a short term correction. RSI (14) has hooked up slightly to 42.8, reflecting the weak rebound, and indicated that the relative strength of the key index is still mildly bearish. Stochastic was at 8.8, has fell deeper into the short term oversold zone, indicating a possible rebound might be expected ahead. Readings from the indicators showed that the FBM KLCI is currently undergoing a correction or consolidation process, and this is likely to continue until there is confluence of reversal signals from the indicators.

The trend of the FBM KLCI remained down and bearish as the key index continue to stay below the short, medium and long term moving averages. Immediate downside support zone is envisaged at 1,425 to 1,400, while the immediate upside resistance zone is at 1,443 to 1,452. With the gross volume continued to shrink, the current consolidation process is likely to extend.

Overnight, the Dow fell -53.59 points or -0.46% to close at 11,493.72. Today, the FBM KLCI is likely to trade within a range of 1,416 to 1,452.

This week's expected range: 1410 – 1520
Today’s expected range: 1416 – 1452

Resistance: 1443, 1447, 1452
Support: 1416, 1420, 1429

Stocks to watch: HIBISCS, HIBISCS-WA, JCY

FBM KLCI - sharply lower on continued selling pressure

Stocks on Bursa Malaysia closed sharply lower yesterday, reflecting the gloomy sentiment in regional markets that remained concerned with the unresolved Euro-zone debt crisis. The bearish statement made by China’s vice-premier, Wang Qishan, that the global economic outlook remained grim and of an impending global recession also affected the market. The FBM KLCI fell 20.32 points or 1.40% to 1,434.08 after opening 2.64 points lower at 1,451.76. Decliners led advancers by 661 to 176 while 194 counters were unchanged. Total volume decreased to 1.416 billion shares worth RM1.161 billion from 1.462 billion shares worth RM1.196 billion last Friday.

The FBM KLCI opened with a down gap of 2.64 points at 1,451.76 and slid lower throughout the day to end the day at the lowest point on bearish sentiment. Chart-wise, the FBM KLCI formed a bearish long black Marubozu candlestick which indicates the market was falling on fears and liquidation by the bears, and sellers were fully in control. The key index is likely to continue falling further today to test the next lower support zone at 1,423 to 1,420, if this support zone could not hold, then there is a strong likelihood that the FBM KLCI may retreat to the 50% Fibonacci retracement level at 1,401.

MACD continued to slide lower, indicating an increased in the bearish momentum. RSI (14) has dropped further to 41.1, indicating the relative strength of the key index is turning bearish from mildly bearish. Stochastic has fallen lower to 10.6, into the short term oversold zone, indicating the bearish market strength is picking up. Readings from the indicators showed that the FBM KLCI is undergoing a strong pullback correction after the recent 132 points rally from the low of 1,310.53, and the correction is likely to continue for a while until there are signs of settling down.

The trend of the FBM KLCI has again turned down and bearish as the key index is now closing below the short, medium and long term moving averages. The critical support level to watch out is the 1,400-point psychological level, and if this level could not hold, the key index may slide further downward to the 61.8% Fibonacci retracement level at 1,380.

Overnight, the Dow tumbled -248.85 points or -2.11% to close at 11,547.31. Today, the FBM KLCI is likely to trade within a range of 1,410 to 1,470.

This week's expected range: 1410 – 1520
Today’s expected range: 1410 – 1470

Resistance: 1446, 1458, 1470
Support: 1410, 1422, 1428

FBM KLCI - in consolidation mode

Stocks on Bursa Malaysia remained in the red at the end of trading last Friday with the benchmark index closing lower as investors remained cautious on the possibility of slower growth for the local economy. The FBM KLCI ended 11.07 points, or 0.75% lower at 1,454.40. On a week-to-week basis, the FBM KLCI declined 14.35 points from previous Friday's closing of 1,468.75. Decliners led advancers by 588 to 197, while 258 counters were unchanged. Turnover declined to 1.46 billion shares, worth RM1.20 billion from Thursday’s 1.586 billion shares valued at RM1.175 billion. Total weekly volume rose to 10.924 billion shares worth RM7.286 billion from 9.203 billion units valued at RM6.049 billion the previous week.

The FBM KLCI was basically in correction and consolidation mode the whole of last week. It rose 10.12 points to 1,478.87 on Monday, but slipped 1.65 points to 1,477.22 on Tuesday due largely to the European debt woes. The FBM KLCI hit the intra-week high of 1,487.37 on Wednesday but pulled back to close 0.38 point lower at 1,476.84. The correction continued into Thursday and Friday where the key index ended the week at its lowest point of 1.454.40.

On the weekly chart, the FBM KLCI formed a bearish black candlestick which closed at the lowest point of the week and was down for the third consecutive week. This indicates that the key index is still in the correction phase after the recent run up and is likely to continue to consolidate. If the psychological support at 1,450 could not hold, the key index is likely to slide further down to test the 1,433 support provided by the 10 and 100-day moving averages (MA).

On the daily chart, The FBM KLCI formed a bearish black candlestick with long upper shadow, and was down for the third consecutive days. The candlestick formation indicated that the key index is still in consolidation and is likely to continue doing so. Immediate support zone is at 1,450 to 1,431-point level, provided by the 40, 50 and 60-day moving averages. If this support zone could not hold, the next likely target is the 38.2% and the 50% Fibonacci retracement levels located at 1,423 and 1,401, measuring from the pivot low of 1,310 to the pivot high of 1,493.

Weekly MACD continued to move higher after making the golden cross but is tapering off, indicating a reduction in the upward momentum. Daily MACD, however, continued to slide lower, indicating the key index has entered the consolidation phase on the daily chart. Weekly RSI (14) was lower at 45.6, indicating the weekly relative strength is still mildly bearish. Daily RSI (14) fell to 47.7, crossing below the 50-level for the first time after crossing above it on October 11, indicating the daily relative strength has again turned mildly bearish. Weekly Stochastic was higher at 71.8, but is tapering off, indicating a slow down in the weekly strength. The daily Stochastic, however, continued to slide lower to 31.8, indicating the loss in daily market strength and continuation of the daily down cycle. Readings from the weekly and daily indicators showed that the FBM KLCI is currently in a consolidation phase which might extend until there are signs that it is over.

The short term trend of the FBM KLCI has turned down, whereas the medium term trend is sideways, while the long term trend is also sideways with a bearish bias. The immediate critical support zone is at 1,450 to 1,431 while the overhead resistance zone is at 1,468 to 1,488. Technically, the FBM KLCI has entered a correction and consolidation phase, and as school holiday had started, the overall market is likely to gradually go slow supported by the dwindling volume over the last few days.

Last Friday, the Dow rose +25.43 points or +0.22% to close at 11,796.16. This week, the FBM KLCI is likely to trade within a range of 1,410 to 1,520, and for today, it is likely to trade within a range of 1,435 to 1,483

This week's expected range: 1410 – 1520
Today’s expected range: 1435 – 1483

Resistance: 1464, 1474, 1483
Support: 1435, 1445, 1449

FBM KLCI - lower in line with regional weakness

Stocks on Bursa Malaysia closed broadly lower yesterday as late selling pressure on some of the key heavyweights pushed the FBM KLCI to close at its day low yesterday, reflecting investor concerns about weaker global sentiments. Losses were mostly seen in banking and plantation stocks as the market fell for the second consecutive day. The FBM KLCI dropped 11.37 points, or 0.77%, to close at 1,465.47 after opening 1.32 points lower at 1,475.52. Losers led gainers by 378 to 344 while 288 counters were unchanged. Turnover fell to 1.586 billion shares valued at RM1.175 billion from 2.03 billion shares worth RM1.47 billion on Wednesday.

The FBM KLCI opened 1.32 points lower at 1,475.52 and rebounded to touch the intra-day high of 1,476.80. However, selling pressure pushed the key index lower to stay in the negative zone throughout the day with intermittent rebound, and late selling pressure on some key heavyweights pressed it to close at the low of the day. Chart-wise, the FBM KLCI formed a bearish black candlestick which indicates heavy selling pressure and the bear was fully in control. With the bearish down move yesterday, the FBM KLCI had broken the lower support of the triangle pattern, and is likely to continue sliding southward. As the key index has also broken the 20-day MA support, it is likely to slide lower to the 30-day MA support area at 1,452.

MACD continued to slide lower, with the histogram getting longer southward, indicating an increase in the downward momentum. Nonetheless, as the MACD is still above the zero-line, the current weakness can be viewed as a short term correction to the strong up move from 1,310 to 1,493. RSI (14) was lower at 51.9, indicating the short term relative strength is turning neutral. Stochastic was lower at 52.3, indicating a continuation of the short term down cycle and extension of market weakness. Readings from the indicators showed that the momentum of the FBM KLCI is turning weak for the short term, and the consolidation process may prolong.

The short term trend of the FBM KLCI is sideways with a downward bias as the key index is now closing below the 5, 10 and 20-day moving averages but is still above the 30-day MA, and a close below the 1,452-point level would confirm that the trend has turned down. The critical support zone for the FBM KLCI is at 1,452 to 1,433 provided by the 30 to 60-day MAs. With the volume falling to below 2 billion shares, the market is likely to gradually turn slow in tandem with the consolidation process.

Overnight, the Dow fell -134.86 points or -1.13% to close at 11,770.73. Today, the FBM KLCI is likely to trade within a range of 1,451 to 1,505.

This week's expected range: 1435 – 1516
Today’s expected range: 1450 – 1488

Resistance: 1473, 1481, 1488
Support: 1450, 1457, 1461

FBM KLCI - marginally lower

Stocks on Bursa Malaysia closed lower yesterday as investors reduced their holdings in selected heavyweights and penny stocks. Losses were mostly seen in Petronas Chemicals and Tenaga which dragged down the FBM KLCI by 0.38 point or 0.03% to close at 1,476.84. Decliners led advancers by 462 to 323 while 285 counters were unchanged. Turnover eased to 2.03 billion shares worth RM1.47 billion from 2.98 billion shares worth RM1.55 billion on Tuesday.

The FBM KLCI opened with an up gap of 3.94 points higher at 1,481.16 and surged to intra-day high of 1,487.37 within the first half an hour of trading, and heavy profit-taking which appeared pushed the key index to the intra-day low of 1,470.09 before rebounding to close marginally lower. Chart-wise, the FBM KLCI formed a high wave black spinning-top candlestick which indicates indecision of market direction with a bearish bias. The trading range of the key index has increased to 17 points yesterday, indicating high volatility, but still remained within the sideways range of the last two weeks. Immediate downside support zone is at 1,470 to 1,452, while the upside resistance zone is at 1,488 to 1,493.

MACD continued to slide lower after making a dead-cross yesterday, indicating a continued loss in momentum and entering into an extended consolidation phase. RSI (14) was marginally lower at 56.8, indicating the key index is still mildly bullish. Stochastic slid lower to 64.2, indicating a continuation of the down cycle and loss in market strength or momentum. Readings from the indicators showed that the FBM KLCI is currently undergoing a sideways consolidation and the phase is likely to extend until clear signs of breakout is observed.

The immediate short term trend of the FBM KLCI is sideways range-bound with the upper boundary at 1,493 while the lower boundary is at 1,452. An immediate support provided by the 20-day MA at 1,467 is critical, as a close of the FBM KLCI below this level is likely to see the key index plunging further to the next lower support at 1,449 provided by the 30-day MA. The FBM KLCI is likely to continue its sideways consolidation with a downward bias, and rotational play on the third liners is also likely to continue.

Overnight, the Dow fell -190.5 points or -1.58% to close at 11,905.59. Today, the FBM KLCI is likely to trade within a range of 1,451 to 1,505.

This week's expected range: 1435 – 1516
Today’s expected range: 1451 – 1505

Resistance: 1487, 1496, 1505
Support: 1451, 1460, 1468

FBM KLCI - marginally lower with good support

Stocks on Bursa Malaysia ended in red yesterday as sentiment remained bearish due largely to European debt woes. Nevertheless, the FBM KLCI closed off its lows with interest seen in selective heavyweights and penny stocks. At the close, the benchmark index slipped 1.65 points or 0.11% to 1,477.22 after moving between 1,473.71 and 1,478.75. Decliners led advancers by 466 to 341 while 258 counters were unchanged. A total of 2.984 billion shares valued at RM1.554 billion changed hands compared with Monday’s 2.849 billion shares worth RM1.885 billion.

The FBM KLCI opened with a down gap of 3.21 points at 1,475.66 and slid to the intra-day low of 1,473.71. The key index then rebounded to hit the intra-day high of 1,478.75 at noon, and was hovering between the high and low levels till closing. Chart-wise, the FBM KLCI formed a small white spinning-top candlestick which indicates indecision of market direction but with an upward bias. The key index is likely to continue its current sideways consolidation with an upward bias for today, as it is still trapped within the triangle. Immediate overhead resistance zone is at 1,485 to 1,493 while the downside support zone is at 1,473 to 1,466.

MACD has made a dead-cross over its signal-line, flashing a sell signal, and indicated that the upward momentum is diminishing and the correction may prolong. RSI (14) was marginally lower at 56.9, reflecting the mild correction. Stochastic continued to dive lower to 74.1, indicating a continuation of the down cycle and market weakness. Readings from the indicators showed that the FBM KLCI is currently undergoing a consolidation phase, and this may prolong until there is clear signs of a breakout.

The immediate short term trend of the FBM KLCI has turned sideways as indicated by the 5 and 10-day moving averages (MA) which has turned flat, while the short term trend as represented by the 20 and 30-day MAs remained up. The medium and long term trend is now sideways. The FBM KLCI is likely to continue its consolidation, and judging from the high volume with a low unit price, the index-link counters will continue to consolidate while the penny stocks will continue to dominate the active counters list.

Overnight, the Dow rose +17.18 points or +0.14% to close at 12,096.16. Today, the FBM KLCI is likely to trade within a range of 1,469 to 1,484.

This week's expected range: 1435 – 1516
Today’s expected range: 1469 – 1484

Resistance: 1480, 1482, 1484
Support: 1469, 1471, 1474

FBM KLCI - higher in range-bound trading

Stocks on Bursa Malaysia closed firmer yesterday on active buying activities as investors took stock of the better performance of Wall Street last Friday. The FBM KLCI rose 10.12 points or 0.69% to 1,478.87, with gains mostly seen in selected heavyweights like IOICORP, TENAGA, DiGi and GENM. The benchmark index, which opened 10.96 points higher at 1,479.71, moved between 1,478.13 and 1,484.88 throughout the day. Gainers thumped losers by 647 to 193 while 246 counters were unchanged. Total market volume rose to 2.849 billion shares worth RM1.885 billion from last Friday’s 2.068 billion units valued at RM1.23 billion.

The FBM KLCI opened with an up gap of 10.96 points at 1,479.71 and surged to the intra-day high of 1,484.88 within the first fifteen minutes, but heavy profit-taking activity sent the key index down to the intra-day low of 1,478.13. The key index was moving sideways between these two points throughout the day. Chart-wise, the FBM KLCI formed a bearish black inverted hammer candlestick which indicates sellers were dominant for the day, and the key index is likely to further consolidate itself today. The FBM KLCI is currently sideways range-bound within a triangle pattern, and a breakout on either side of the triangle would see the key index continue moving in that direction.

MACD continued to slide lower and is just slightly above the signal-line, indicating a continued loss in the upward momentum, and is in a short term consolidation mode. RSI (14) hooked up to 57.6, reflecting the rebound and the relative strength of the key index is still in the mildly bullish zone. Stochastic was lower at 79.4, indicating a loss in the momentum and market strength, a crossing below the 80 level indicates a probable beginning of a down cycle. Readings from the indicators showed that the FBM KLCI has gone into a short term consolidation mode. The consolidation may extend until a clear breakout sign is observed.

The immediate short term trend of the FBM KLCI has turned sideways, and so is the medium term trend. The long term trend is also turning sideways with a bearish bias. Immediate downside support zone is at 1,470 to 1,466 while the overhead resistance zone is at 1,485 to 1,490. With the FBM KLCI going into consolidation, the overall market is likely to remain active dominated by trading in penny stocks as can be seen from the high volume but low value trend over the last few days. Investors are advise to trade cautiously, and don’t be greedy.

Overnight, the Dow fell -74.70 points or -0.61% to close at 12,078.98. Today, the FBM KLCI is likely to trade within a range of 1,469 to 1,492.

This week's expected range: 1435 – 1516
Today’s expected range: 1469 – 1492

Resistance: 1484, 1488, 1492
Support: 1469, 1473, 1476

FBM KLCI - likely to be range-bound with an upward bias

Stocks on Bursa Malaysia closed mixed last Friday with penny stocks making gains while the blue-chips continued to consolidate. The FBM KLCI gave up earlier gains to close 3.90 points or 0.26% lower at 1,468.75, on profit-taking in heavyweights, and week-on-week, the benchmark index declined 8.76 points from 1,477.51 the previous Friday. Gainers beat losers by 425 to 310 with 282 counters flat. Turnover was lower at 2.068 billion shares worth RM1.23 billion from 2.644 billion shares worth RM1.462 billion previously. Total weekly volume increased to 9.203 billion shares valued at RM6.049 billion from 8.15 billion shares valued at RM7.22 billion the previous week.

Bursa Malaysia was closed last Monday for Hari Raya Aidiladha holiday. Taking cue from the strong performance of Wall Street on last Monday, the FBM KLCI opened on last Tuesday with an up gap of 5.77 points at 1,483.28 and touched the intra-day high of 1,489.91 before profit-taking activity pressed it to close at 1,480.46, making a small gain of 2.95 points. The key index rose 9.18 points or to 1,489.64 on Wednesday moving in tandem with higher regional Asian markets and a firmer overnight Wall Street. Taking cue from the hefty fall of 389 points on the Dow overnight, the FBM KLCI lost 16.99 points to 1,472.65 on Thursday after plunging to the intra-day low of 1,466.25, losing 23.39 points at its worst, and the key index continued its consolidation and closed Friday 3.90 points lower at 1,468.75.

On the weekly chart, the FBM KLCI formed a bearish black candlestick which serves to confirm the top reversal signal issued by the black hanging-man candlestick formed the previous week, and hence the key index is likely to extend its correction or consolidation this week. Immediate downside support zone is envisaged at 1,466 to 1,452.

On the daily chart, the FBM KLCI formed a bearish dark-cloud-cover candlestick pattern which indicates heavy profit-taking after hitting the intra-day high of 1,478.33, and the key index is likely to continue its consolidation today with immediate support zone at 1,466 to 1,460, while the overhead resistance zone is at 1,478 to 1,493. Since hitting the recent high of 1,493.28 on 31st October 2011, the key index had moved into sideways consolidation mode forming a triangle pattern, and it may continue to move up and down within this triangle until a decisive breakout on either side of the triangle. If the FBM KLCI is able to breakout decisively above the 1,493-point level, it will rally to test the next higher resistance zone at 1,500 to 1,515.

Weekly MACD had made a golden-cross above its signal-line, flashing a buy signal. This bullish signal came after three months since the weekly MACD made a dead-cross on 29th July 2011. If the FBM KLCI is able to close above the 1,510-point level, the weekly MACD would cross the zero-line, and the key index would turn long term bullish again. Daily MACD, however, continued to slide lower, indicating the key index is still in consolidation on the daily timeframe.

Weekly RSI (14) continued to dip lower to 48.05 from 49.55 the previous week, reflecting the current consolidation. Anyway, the weekly relative strength is still in the neutral zone with a mildly bearish bias. Daily RSI (14) continued to slide lower to 54.6, indicating a continued loss in the short term relative strength due to the consolidation, nonetheless, the daily relative strength is still in the mildly bullish zone.

Weekly Stochastic continued to climb higher to 70.1 from 60.7 the previous week, indicating a continued improvement of the weekly market momentum and strength. Daily stochastic has turned downward, and crossed below the slow stochastic line, reflecting the consolidation in the key index. Readings from the indicators showed that the FBM KLCI is gradually turning bullish from the weekly perspective, while from the daily perspective, it has gone into a short term consolidation. The key index shall re-gain its upward momentum after the short term consolidation is over, back by the positive weekly momentum.

The immediate short term trend of the FBM KLCI has turned sideways as the key index has now closed below the 5 and 10-day MAs but is still above the 20 and 30-day MAs. The medium term trend has also turned sideways with the 50 and 60-day MAs turning flat. The long term trend, however, is still bearish bias with the FBM KLCI continued to stay below the long term moving averages. For the coming week, the FBM KLCI is likely to continue its range-bound consolidation until a decisive breakout above the 1,493-point resistance level or a downward breakout below the 1,440-point support level is observed. While the key index-link counters continue to consolidate themselves, the overall market may still be dominated by active trading in penny stocks.

Last Friday, the Dow rose +259.89 points or +2.19% to close at 12,153.68. This week, the FBM KLCI is likely to trade within a range of 1,435 to 1,516, and for today, it is likely to trade within a range of 1,455 to 1,488.

This week's expected range: 1435 – 1516
Today’s expected range: 1455 – 1488

Resistance: 1476, 1482, 1488
Support: 1455, 1462, 1465

FBM KLCI - lower but with good buying support

Stocks on Bursa Malaysia closed sharply lower yesterday as the market pull back after three days of gains, and was in line with the fall on regional markets amid an escalating debt crisis in Europe. Renewed fears over the unresolved debt problem in Italy, which is pressuring the country to seek a bailout, fuelled concerns over its impact on the Euro-zone and global economy. The FBM KLCI fell 16.99 points or 1.14% to 1,472.65 at the close. Losers led gainers by 568 to 227 with 212 counters unchanged. Turnover was lower at 2.644 billion shares worth RM1.462 billion from the 2.677 billion shares worth RM1.818 billion on Wednesday.

Taking cue from the hefty fall on Wall Street overnight, the FBM KLCI opened with a big down gap of 20.41 points at 1,469.23 and plunged to the intra-day low of 1,466.25, losing 23.39 points at its worst. The key index rebounded and recovered some lost grounds, where it touched the intra-day high of 1,474.73 before settling at 1,472.65. Chart-wise, the FBM KLCI formed a bullish small white spinning-top like candlestick which indicates buying support for the key index amid a bearish sentiment, and the key index may continue its rebound today but with limited upside, as the FBM KLCI is now closing below the 5, 10, and 360-day moving averages (MA), and the gap formed yesterday may together post as a strong resistance zone.

MACD has hooked downward, and the histogram also turned shorter, indicating a loss in the momentum. Nonetheless, the MACD is still above the signal-line as well as the zero-line, hence the current weakness may well be just a correction in an uptrend. RSI (14) plunged to 56 from 62.6 a day ago, indicating the relative strength of the key index has turned mildly bullish from bullish. Stochastic has hooked downward to 89.9, reflecting the pullback in the key index, but is still above its slow stochastic line. Readings from the indicators showed that the FBM KLCI is currently undergoing a correction, and nonetheless, the underlying tone is still bullish.

The short term trend of the FBM KLCI is up. However, the pullback yesterday has brought the key index below the 5 and 10-day MA, signifying the immediate short term trend may turn sideways and goes into consolidation. The medium term trend has turned sideways and the long term trend remained bearish. Immediate overhead resistance zone is at 1,475 to 1,481 while the downside support zone is at 1,466 to 1,461. As the week is approaching the weekend, the market may trade cautiously today with the penny stocks likely to continue to dominate the active scene.

Overnight, the Dow rose +112.85 points or +0.96% to close at 11,893.79. Today, the FBM KLCI is likely to trade within a range of 1,459 to 1,484.

This week's expected range: 1433 – 1534
Today’s expected range: 1459 – 1484

Resistance: 1477, 1480, 1484
Support: 1459, 1462, 1467

Stocks to watch: JCY

FBM KLCI - uptrend continued

Stocks on Bursa Malaysia closed higher yesterday, driven by gains on penny stocks and selected blue chips. The local bourse extended its uptrend since last Friday, in tandem with higher regional Asian markets and a firmer overnight Wall Street. The improved sentiment on regional markets was driven by the latest news on developments in Italy's debt crisis, as news of Italian Prime Minister Silvio Berlusconi's impending resignation lifted confidence that a new leader would act more effectively to tackle the country's debt woes. The FBM KLCI rose by 9.18 points or 0.62% to close at 1,489.64 after opening 0.75 point better at 1,481.21. Gainers beat losers by 562 to 222 with 268 counters unchanged. Turnover was higher at 2.677 billion shares worth RM1.818 billion from 1.812 billion shares worth RM1.538 billion.

The FBM KLCI opened 0.75 point higher at 1,481.21 and surged to the intra-day high of 1,490.74 within the first hour of trade, and it pulled back on profit-taking and moved sideways for the rest of the day before a last minute buying of selected heavyweights which pushed it to close near the high of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates continuation of the current uptrend, and is likely to move higher to re-test the recent high at 1,493.28. If the key index is able to breakthrough this resistance level decisively, then it may rally higher to test the 1,500-point psychological level.

MACD continued to move higher, and the histogram also turned longer for the first time after a five days consolidation, indicating a resumption of the upward momentum. RSI (14) was higher at 62.6, indicating the short term relative strength has turned bullish. Stochastic has crossed above the slow stochastic line and continued to move higher, indicating a continuation of the up cycle and improvement of the market strength. Readings from the indicators showed that the FBM KLCI is gradually turning bullish after the recent correction.

The short term trend of the FBM KLCI remained up, and the medium term trend has turned sideways as the 50 and 60-day moving averages (MA) has tuned flat. The long term outlook is still slightly bearish even though the key index is now above the 360-day MA but is still below most of the longer term MAs. The FBM KLCI will have to break through the strong overhead resistance zone at 1,500 to 1,510 formed by a cluster of long term MAs in order for it to turn fully bullish. The overall market is likely to remain active dominated by trading in penny stocks judging from the high volume but low value traded over the last two day.

Overnight, the Dow fell -389.24 points or -3.20% to close at 11,780.94. Today, the FBM KLCI is likely to trade within a range of 1,474 to 1,500.

This week's expected range: 1433 – 1534
Today’s expected range: 1474 – 1500

Resistance: 1493, 1497, 1500
Support: 1474, 1477, 1483

FBM KLCI - higher in cautious trade

Stocks on Bursa Malaysia closed marginally higher on continued buying momentum in selective counters. However, finance counters succumbed to selling pressure in line with the cautious market sentiment in regional markets. The broader Asian bourses showed a mixed performance underlined by cautious trading, as the Euro-zone debt contagion spread to Italy. The FBM KLCI was 2.95 points or 0.20% higher at 1,480.46 after opening 5.77 points higher at 1,483.28. Gainers beat losers by 408 to 329 with 279 counters unchanged. Turnover was lower at 1.812 billion shares worth RM1.538 billion from 2.302 billion shares worth RM1.512 billion last Friday.

The FBM KLCI opened with an up gap of 5.77 points at 1,483.28 and climbed to the intra-day high of 1,489.91 in the first hour of trade. However, selling pressure due to profit-taking activity pressed the key index to the intra-day low of 1,476.81 before some late buying in selected blue-chips lifted it to close off low. Chart-wise, the FBM KLCI formed a black spinning-top candlestick which indicates indecision of market direction with sellers being more dominant for the day, and hence, the key index is likely to continue to consolidate today. Immediate overhead resistance zone is at 1,488 to 1,493, and a decisive breakout from this resistance zone might see the key index rally towards the 1,500-point level.

MACD was marginally higher, but its histogram turned shorter, indicating the upward momentum is weakening. RSI (14) was slightly higher at 60.3, and has moved into the bullish zone. Stochastic was higher at 83.7 and has just crossed above the slow stochastic line, indicating a possible further up move. Readings from the indicators showed that the FBM KLCI is in consolidation with a bullish upward bias.

The short term trend of the FBM KLCI is up while the medium term trend has turned sideways as the 50 and 60-day moving averages are turning flat. The long term outlook is still slightly bearish as the key index is still staying below most of the longer term moving averages. Immediate overhead resistance zone is envisaged at 1,488 to 1,493 while the immediate downside support zone is at 1,477 to 1,468. Volume traded over the last few days was high but the unit value was low, indicating the market activity was focus on the lower price stocks. Rotational play on second and third liners is likely to continue while the heavyweights may consolidate.

Overnight, the Dow rose +101.79 points or +0.84% to close at 12,170.18. Today, the FBM KLCI is likely to trade within a range of 1,461 to 1,503.

This week's expected range: 1433 – 1534
Today’s expected range: 1461 – 1503

Resistance: 1488, 1496, 1503
Support: 1461, 1469, 1474

Stocks to watch: HIBISCS, HIBISCS-WA, JCY, LATEXX, BENALEC

FBM KLCI - likely range-bound with an upward bias

Stocks on Bursa Malaysia ended higher last Friday, spurred by strong technical rebounds in regional markets. The market rebounded as sentiment was boosted by positive developments in Greece as Greek Prime Minister George Papandreou was prepared to drop a plan for a referendum on a European Union bailout package, upbeat job market data from US and our better-than-expected trade data. Malaysia's trade surplus stood at RM9.63 billion in September while total trade rose 4.9% to RM107.73 billion. The FBM KLCI rose 15.14 points, or 1.03%, to close at 1,477.51, after opening 8.48 points higher at 1,470.85, while on a weekly basis, the key index lost 4.31 points from previous week’s 1,481.82. Gainers led losers by 591 to 194 while 248 counters were flat. Turnover rose to 2.3 billion shares worth RM1.51 billion from 1.75 billion shares worth RM1.14 billion on Thursday. Total volume for the week increased to 8.15 billion shares valued at RM7.22 billion from 6.033 billion shares worth RM7.1 billion previously. Bursa Malaysia was closed yesterday for the celebration of Hari Raya Aidiladha holiday.

The FBM KLCI went through a volatile week last week with the key index opening on Monday 2.84 points higher at 1,484.66 and rose 10.07 points to close at 1,491.89 after hitting an intra-day low of 1,475.71. On Tuesday, The FBM KLCI fell 16.25 points to close at 1,475.64 as investors took their cues from Wall Street's losses due to weak leads from European markets as Greece government announced that the country would hold a referendum on a new aid package. Taking cue from the heavy losses on Wall Street overnight, the FBM KLCI opened on Wednesday with a down gap of 7.84 points at 1,467.80 and plunged to the intra-day low of 1,457.50 before rebounding to close 4.69 points lower at 1,470.95. On Thursday, the selling pressure continued with the key index plunging to the intra-week low of 1,452.64 before late hour bargain hunting lifted it to close 8.58 points lower at 1,462.37, and on Friday the FBM KLCI staged a rebound to finish the week 15.14 points higher at 1,477.51.

On the weekly chart, the FBM KLCI formed a hanging-man candlestick, which is a top reversal candle pattern, and the appearance of this candlestick pattern after a strong up move indicates the key index might reverse or consolidate. The key index is sitting right below the 20-week moving average (MA) which is currently at 1,486.91, and is above the 80-week MA at 1,466.51 and it might consolidate within this range. If it is able to break above last week’s high of 1,493, it might have a good chance of testing the psychological resistance level of 1,500, but the 30 and 60-week MAs at 1,505 may post as a strong resistance level.

On the daily chart, the FBM KLCI formed a bullish white candlestick which closed at the highest point of the day on last Friday after three consecutive days of losses. As it opened with a strong up gap and closed at the highest point of the day, the key index is likely to stage a follow through up move today. Immediate overhead resistance zone is at 1,486 to 1,493 with the 61.8% Fibonacci retracement level as a key resistance. Nonetheless, the strong resistance zone lies at 1,500 to 1,511 form by a cluster of long term moving averages, if the FBM KLCI is able to break through this zone, then it would again turn bullish for the long term.

Weekly MACD has just made a golden-cross above its signal-line, flashing a buy signal. Nonetheless, it is still below the zero-line. Daily MACD has hooked up, but its histogram continued to turn shorter, indicating the daily upward momentum is reducing. Weekly RSI (14) has hooked downward to 49.5 after touching 50.3 the previous week, reflecting the correction last week and is in the neutral zone. On the flip side, daily RSI (14) has turned upward to 59.5 from 55.4 on Thursday, indicating the daily relative strength has again moved towards the bullish zone. Weekly stochastic continued to climb higher to 60.7, indicating a continued improvement of the weekly market strength and the up cycle. Daily Stochastic was at 81.2 and has hooked up slightly but is still below its daily slow stochastic line, reflecting the rebound last Friday. Readings from the indicators showed that the FBM KLCI is gradually turning bullish on the weekly chart, while on the daily chart, it was already mildly bullish.

The short term trend of the FBM KLCI is up, and the medium term trend represented by the 50 and 60-day MAs has turned flat, while the long term trend represented by a cluster of long term MAs is also flat. For this week, the FBM KCI is likely to move range-bound with an upward bias. Overnight, the Dow rose +85.15 points or +0.71% to close at 12,068.39. This week, the FBM KLCI is likely to trade within a range of 1,433 to 1,534, and for today, it is likely to trade within a range of 1,461 to 1,487.

This week's expected range: 1433 – 1534
Today’s expected range: 1461 – 1487

Resistance: 1481, 1484, 1487
Support: 1461, 1464, 1471

FBM KLCI - lower on consolidation

Stocks on Bursa Malaysia closed mostly lower yesterday on profit-taking, particularly on the 30 counters of the key index. Nonetheless, most of the selling pressures were well-absorbed by the market which has already expected a consolidation in line with regional peers. The FBM KLCI declined 8.58 points, or 0.6%, to close at 1,462.37 after opening 0.92 point higher at 1,471.87. Losers led gainers by 524 to 226 while 273 counters were unchanged. Turnover rose to 1.75 billion shares worth RM1.14 billion compared with 1.56 billion shares worth RM1.7 billion on Wednesday.

The FBM KLCI opened 0.92 point higher at 1,471.87 and surged to the intra-day high of 1,473.45, but profit-taking activity which emerged pushed the key index lower to the intra-day low of 1,452.64 before late hour bargain hunting lifted it to close off low. Chart-wise, the FBM KLCI formed a bearish black candlestick with long lower shadow, and it covered the body of the previous candle. This formation indicates the selling pressure was strong but buying support managed to lift the key index to almost the mid range for the day, and is closing above previous day’s low after breaching it, indicating the selling pressure was quite well absorbed. The FBM KLCI is likely to stay range-bound today with immediate overhead resistance at 1,473 and the downside support at 1,452.

MACD continued to slide lower and the histogram was also shorter, indicating a continued loss in momentum. Nonetheless, as the MACD is still above the signal-line as well as above the zero-line, current weakness is viewed as a correction to the recent uptrend. RSI (14) slide lower to 55.4, indicating a continued loss in the relative strength and the key index is sliding further downward into the mildly bullish zone. Stochastic continued to slide lower to 80.6, indicating a continuation of the market weakness and down cycle. Readings from the indicators showed that the FBM KLCI is currently undergoing a correction and may continue to consolidate.

The short and medium term trend of the FBM KLCI remained up, while the long term trend is still bearish. However, for the immediate term the key index may go into range-bound consolidation as it is now below the 5 and 10-day moving averages (MA) but is still above the 20 and 30-day MAs. Immediate strong overhead resistance zone is at 1,473 to 1,476 while the downside support zone is at 1,452 to 1,448. Overnight, the Dow rose +208.43 points or +1.76% to close at 12,044.47. Today, the FBM KLCI is likely to trade within a range of 1,431 to 1,494.

This week's expected range: 1432 – 1529
Today’s expected range: 1431 – 1494

Resistance: 1473, 1484, 1494
Support: 1431, 1442, 1452

FBM KLCI - lower with strong buying support seen

Stocks on Bursa Malaysia ended mixed yesterday as key heavyweights staged a rebound amid concerns on Greece's referendum plan that may threaten Europe's debt rescue plan. The market rebounded after Monday's sell-off, following the bounce in regional markets. The FBM KLCI declined 4.69 points, or 0.32%, to 1,470.95 after opening 7.84 points lower at 1,467.8. Gainers led losers by 374 to 363 while 285 counters were unchanged. A total of 1.56 billion shares valued at RM1.7 billion were traded compared with 1.19 billion shares worth RM1.29 billion on Tuesday.

Taking cue from the heavy losses on Wall Street overnight, the FBM KLCI opened with a down gap of 7.84 points at 1,467.80 and plunged to the intra-day low of 1,457.50 within the first forty five minutes. It rebounded at late morning and continued to move higher in the afternoon session to hit the intra-day high of 1,473.13 before easing to close at 1,470.95. Chart-wise, the FBM KLCI formed a white hammer candlestick, a bottom reversal candle pattern, which indicates strong buying support after the initial selling on fear, and the key index might continue its upward move today. Immediate resistance is at 1,475-point level.

MACD has turned downward, and the histogram also getting shorter, indicating a weakening of the momentum. Nonetheless, as the MACD is still above the signal-line and the zero-line, the current weakness may just be part of a short term correction. RSI (14) fell lower to 58.5, indicating the relative strength is turning weaker, but is still in the mildly bullish zone. Stochastic continued to slide lower to 88.7, reflecting the pullback correction. Readings from the indicators showed that the FBM KLCI is currently undergoing a pullback correction, and the technical picture has not turn bearish. The key index might continue its upward move after the correction is over.

The short and medium term trend of the FBM KLCI is up, while the long term trend remained bearish. The key index has tested the support of the 10-day moving average (MA) and rebounded off it, but is now below the 5-day MA. Hence, the FBM KLCI is likely to be range-bound today unless it can break above the 5-day MA at 1,478, then it may rally higher to retest the recent high of 1,493. With volume remained above the 1 billion shares mark, the market is likely to see active rotational play on second and third liners while the heavyweights may continue its consolidation.

Overnight, the Dow rose +178.08 points or +1.53% to close at 11,836.04. Today, the FBM KLCI is likely to trade within a range of 1,445 to 1,489.

This week's expected range: 1432 – 1529
Today’s expected range: 1445 – 1489

Resistance: 1477, 1483, 1489
Support: 1445, 1451, 1461

Stocks to watch: MEGB

FBM KLCI - pullback correction

Stocks on Bursa Malaysia ended sharply lower yesterday on profit-taking amid the uncertainty in the short-term market outlook. Investors took their cues from Wall Street's losses due to weak leads from European markets as Greece government announced that the country would hold a referendum on a new aid package. The FBM KLCI fell 16.25 points, or 1.09%, to close at 1,475.64, after opening 7.76 points lower at 1,484.13. Losers led gainers by 583 to 198 while 213 counters were flat. Turnover was moderate with a volume of 1.19 billion shares worth RM1.29 billion compared with 1.33 billion shares worth RM1.58 billion on Monday.

Taking cue from the weak performance of Wall Street overnight, the FBM KLCI opened with a down gap of 7.76 points at 1,484.13 and was moving sideways in a tight range for the morning session. Heavy selling pressure appeared in the afternoon dragged the key index to close near the low of the day. Chart-wise, the FBM KLCI formed a bearish black candlestick which indicates heavy selling pressure and a reversal, and the key index is likely to further correct itself today. Immediate downside support is envisaged at 1,470, 1,465 1,459 and 1,450.

MACD continued to climb higher but is tapering off, and the histogram has turned shorter, indicating a slow down in the upward momentum. RSI (14) has hooked downward to 60.3, reflecting the pulled back. Stochastic has turned downward and crossed below the slow stochastic line, reflecting the reversal in the key index. Readings from the indicators showed that the FBM KLCI is currently undergoing a pulled back correction.

The short and medium term trend of the FBM KLCI remained up, while the long term trend is still bearish as the key index is still below most of the long term moving averages (MA). The 360-day MA at 1,470 and the 10-day MA at 1,459 are critical support level to watch, a break below both these support levels would likely see the FBM KLCI plunging further to the 1,450-point psychological support level. As the overall volume traded is shrinking, the market is likely to go into a consolidation mode.

Overnight, the Dow fell another -297.05 points or -2.48% to close at 11,657.96. Today, the FBM KLCI is likely to trade within a range of 1,460 to 1,497.

This week's expected range: 1432 – 1529
Today’s expected range: 1460 – 1497

Resistance: 1483, 1490, 1497
Support: 1460, 1467, 1471

FBM KLCI - closing October on a strong note

Stocks on Bursa Malaysia ended higher yesterday with the appetite for risk remaining intact from last week amid the positive global sentiment. Buying interest from retails and local funds provided the impetus for the uptrend, with focus in heavyweights and low-liners such as rubber glove stocks. The FBM KLCI rose 10.07 points or 0.7% to 1,491.89 after opening 2.84 points higher at 1,484.66. Advancers led decliners by 426 to 318 while 282 counters were unchanged. Turnover was moderate with a volume of 1.33 billion shares valued at RM1.58 billion compared with 1.88 billion shares worth RM2.29 billion last Friday.

The FBM KLCI opened 2.84 points higher at 1,484.66 but experienced profit-taking activity which pressed the key index lower throughout the morning session to the intra-day low of 1,475.71. The afternoon session saw strong buying interest in selected blue-chip stocks which pushed the barometer to the intra-day high of 1,493.28 before easing to close at 1,491.89. Chart-wise, the FBM KLCI formed a bullish white candlestick with long lower shadow which indicates the bears were initially in control but later the bulls fought back and took control, and hence, the key index is likely to continue its uptrend today. The FBM KLCI is likely to face strong resistance at the 1,500-point psychological level.

MACD continued to climb higher, indicating a continuation in the upward momentum. RSI (14) was higher at 66.5, indicating an increased in the short term bullishness. Stochastic was also higher at 96.7, indicating a strong market strength and the up cycle is in continuation. Readings from the indicators showed that the FBM KLCI is currently in a bullish state. However, the key index may face some strong profit-taking when RSI readings approach the 70 level.

The short and medium term trend of the FBM KLCI remained up, while the key index has just broken above the 360-day long term moving average (MA), giving out a first signal that the long term trend is gradually turning bullish. However, the key index is still below the other long term 120, 200, 240 and the 300-day MAs, which together formed the resistance zone at 1,500 to 1,513-points level. If only the key index can break through this zone, it is considered fully bullish for the long term.

Overnight, the Dow fell -276.10 points or -2.26% to close at 11,955.01. Today, the FBM KLCI is likely to trade within a range of 1,463 to 1,511.

This week's expected range: 1432 – 1529
Today’s expected range: 1463 – 1511

Resistance: 1499, 1505, 1511
Support: 1463, 1469, 1480

Stocks to watch: ZELAN, SALCON, MBSB