FBM KLCI - medium term trend turned bearish

Stocks on Bursa Malaysia closed lower last Friday on lack of investor support, as investors were reluctant to hold new positions amid weaknesses in regional markets and before the Bersih 3.0 rally over the weekend. News on Spain's credit rating downgrade had overshadowed the good performance on Wall Street and better US corporate earnings. Standard & Poor's Ratings Services lowered its investment-grade rating on Spain by two notches to 'BBB+' from 'A', citing mounting risks to the nation's government debt as the economy contracts. The benchmark FBM KLCI lost 11.89 points 0.75% to settle at 1,567.80 after opening 0.49 point higher at 1,580.18, and on a weekly basis, it lost 24.05 points from 1,591.85 last Friday. Losers outpaced gainers by 409 to 286 while 349 counters were flat. Turnover fell to 1.296 billion shares worth RM1.386 billion compared with Thursday’s 1.454 billion shares valued at RM1.461 billion, and total weekly volume decreased to 7.309 billion shares valued at RM7.520 billion from previous week’s 8.602 billion shares, valued at RM7.534 billion.

The FBM KLCI was basically in correction mode the whole of last week. It opened 0.02 of a point higher at 1,591.87 and surged to the intra-week high of 1,592.45 rights after opening, but slid under selling pressure to close 8.05 points lower at 1,583.80 on Monday. The FBM KLCI ended 1.52 points lower at 1,582.28 on Tuesday after opening 3.23 points lower at 1,580.57. On Wednesday, the benchmark index continued to move southward to end another 2.93 points lower at 1,579.35. The FBM KLCI staged a mild rebound on Thursday to close marginally higher at 1,579.69 with a marginal gain of 0.34 point in cautious trading and taking cue from gains on regional markets, and Friday saw another sell down with the benchmark index losing 11.89 points to end the week at 1,567.80.

On the weekly chart, the FBM KLCI formed a bearish long black candlestick which indicates the benchmark index was facing heavy selling pressure last week as it opened near the week’s high and closed near the week’s low. Moreover, the key index has closed below the 10-week SMA, and with selling pressure mounting, the FBM KLCI is likely to further correct downward towards the 20-week SMA support at 1,553-point this week. On the daily chart, the FBM KLCI also formed a bearish long black candlestick which reflected the bearish mood on last Friday, and the FBM KLCI is likely to slide lower to test the next lower support level at 1,550-point if it continues to break the immediate support of 1,566-point.

Weekly MACD and its histogram continued to slide lower, indicating a continued loss in the weekly momentum. Daily MACD also slid lower and has crossed below the zero-line, spelling the end of the bull trend and the beginning of a bear trend. Weekly RSI (14) plunged lower to 55.9 from previous week’s 63.4, indicating a continued weakening of the index’s weekly relative strength. Daily RSI (14) also slipped lower to 35.2, indicating the FBM KLCI has turned bearish from the short term perspective. Weekly Stochastic has crossed below the 80-level to 78.3, indicating the end of the weekly up cycle and the beginning of a weekly down cycle. Daily Stochastic continued to slide lower to 4.3, indicating the index’s short term strength is very weak. Nevertheless, as the stochastic has reached a deeply short term oversold situation, some technical rebound might be expected. Readings from both the weekly and daily indicators showed that the FBM KLCI is current very weak and bearish, and the downtrend may continue for a while until a solid reversal is seen.

The short trend of the FBM KLCI remained down, whilst the medium term has now turned bearish as the key index has closed below the lower support trend-line of the uptrend channel as well as below the 60-day SMA, which means the uptrend that started on 26^th September 2011 is officially over, and any rebound from now should be viewed as an opportunity to sell, especially on the index-linked blue-chips. For the coming week, the FBM KLCI is likely to further correct downward with a critical downside support at the 1,540-point level, being the 23.6% Fibonacci retracement level for the range from the pivot low of 1,310.53 on 26^th September 2011 to the pivot high of 1,609.33 registered on 3^rd April 2012.

Last Friday, the Dow rose +23.69 points or +0.18% to close at 13,228.31. This week, the FBM KLCI is likely to trade within a range of 1,532 to 1,618, and for today, it is likely to trade within a range of 1,549 to 1,594.

This week's expected range: 1532 – 1618
Today’s expected range: 1549 – 1594

Resistance: 1577, 1586, 1594
Support: 1549, 1557, 1562

FBM KLCI - remained in consolidation mode

Stocks on Bursa Malaysia closed marginally higher yesterday with the FBM KLCI settling at 1,579.69 with a marginal gain of 0.34 point or 0.02% in cautious trading and taking cue from gains on regional markets. Despite the gains on regional markets and strong US corporate results alongside reassurances from the Federal Reserve to support growth, the local bourse lacked traction due to the absence of fresh market moving factors. Decliners led advancers by 453 to 253 while 321 counters remained unchanged. Total volume rose to 1.454 billion valued at RM1.461 billion from the 1.47 billion shares worth RM1.53 billion transacted Wednesday.

Taking cue from the strong performance of the Dow overnight, the FBM KLCI opened 0.98 of a point higher at 1,580.33 and surged to the intra-day high of 1,583.08 within the first fifteen minutes of trading, and profit-taking activity which appeared pressed the key index lower to the intra-day low of 1,577.71 before rebounding to close marginally higher. Chart-wise, the FBM KLCI formed a black spinning-top candlestick which indicates uncertainty or indecision of market direction with a downward bias. Hence, the key index is likely to continue to consolidate at current level. Immediate critical support is the 1,577-point horizontal support level, and a close below this support level is likely to see the FBM KLCI sliding further southward.

MACD and its histogram continued to slide lower, indicating a further loss in the index’s momentum. MACD is currently at a critical position as it is just marginally above the zero-line, and a break below the zero-line would indicate that the FBM KLCI has turned bearish. RSI (14) made a gentle hook up to 42.9 from 42.5 previously, reflecting the mild gain on the index. Nevertheless, it indicates that the short term relative strength of the FBM KLCI is in the moderately bearish zone. Stochastic was lower at 7.08, and is deep into the short term oversold zone, indicating very weak short term strength of the key index. However, the stochastic has shown sign of tapering off indicating a reduction in the downward momentum and a rebound might be expected ahead. Readings from the indicators showed that the FBM KLCI is currently weak and bearish bias, and likely to extend its consolidation phase.

The short term trend of the FBM KLCI still remained down while the medium term trend is being challenged at the moment, as the key index is hovering around the 50-day SMA and is very close to the 60-day SMA which is currently at 1,575.64-point. A close below the 60-day SMA would mean the medium term trend also turn bearish. Nevertheless, the long term trend is still up. Immediate downside support zone is at 1,577 to 1,566 while the overhead resistance zone is at 1,583 to 1,586.

Overnight, the Dow rose +113.90 points or +0.87% to close at 13,204.62. Today, the FBM KLCI is likely to trade within a range of 1,571 to 1,589.

This week's expected range: 1577 – 1613
Today’s expected range: 1571 – 1589

Resistance: 1583, 1586, 1589
Support: 1571, 1574, 1577

FBM KLCI - in consolidation

Stocks on Bursa Malaysia closed lower yesterday despite opening on a higher note due to weak sentiments amid the persistent worries on the global economy. The local market was mostly influenced by external factors while internal developments like the Bersih 3.0 rally, scheduled to be held this Saturday, added to the negative sentiment. The FBM KLCI ended 2.93 points or 0.19% lower at 1,579.35 after opening 0.16 of a point higher at 1,582.44. Losers outnumbered gainers by 405 to 315 while 346 counters were unchanged. Total market volume increased to 1.47 billion shares worth RM1.53 billion from Tuesday’s 1.42 billion shares worth RM1.55 billion.

The FBM KLCI opened 0.16 of a point higher at 1,582.44 and moved higher to the intra-day high of 1,585.93 within the first forty five minutes. The key index then made a turn and slid lower for the rest of the day and hit the intra-day low of 1,578.68 before rebounding marginally to close off low. Chart-wise, the FBM KLCI formed a black inverted hammer candlestick which indicates the bulls were trying to fight back initially but succumbed to the selling pressure from the bears, and the key index is likely to continue its consolidation.

MACD and its histogram continued to slide lower, indicating a continued loss in the index’s short term momentum. RSI (14) was lower at 42.5, indicating a continued loss in the short term relative strength deeper into the mildly bearish zone. Stochastic continued to slide lower into the short term oversold zone and registered a reading of 8.7. Readings from the indicators showed that the FBM KLCI is currently weak and bearish. However, as the stochastic oscillator has reached the short term oversold zone, a rebound might be expected ahead.

The short term trend of the FBM KLCI is currently down and bearish; nevertheless, the medium to longer term trend is still up. The key index is currently closing just marginally below the 50-day SMA support, and a continue break of this important medium support level will likely see heavier selling pressure which might push the FBM KLCI to a lower level. Immediate downside support zone is at 1,578 to 1,566 with 1,574, the 60-day SMA support, being a critical support level to watch, and the overhead resistance zone is at 1,586 to 1,593.

Overnight, the Dow rose +89.16 points or +0.69% to close at 13,090.72. Today, the FBM KLCI is likely to trade within a range of 1,569 to 1,593.

This week's expected range: 1577 – 1613
Today’s expected range: 1569 – 1593

Resistance: 1584, 1589, 1593
Support: 1569, 1574, 1576

FBM KLCI - sign of temporary bottom

Stocks on Bursa Malaysia closed lower yesterday amid uncertainties in the local politics and the global economy. The FBM KLCI ended 1.52 points or 0.10% lower at 1,582.28 after opening 3.23 points lower at 1,580.57. Losers outnumbered gainers by 409 to 273 while 348 counters were unchanged. Total market volume decreased to 1.42 billion shares worth RM1.55 billion from Monday’s close of 1.663 billion shares worth RM1.595 billion.

Taking cue from the weak performance of Wall Street overnight, the FBM KLCI opened with a down gap of 3.23 points at 1,580.57 and slid lower to the intra-day low of 1,579.04. The key index rebounded from the low to touch the intra-day high of 1,583.29 and stayed sideways in a tight range for a major part of the day before a last minute buying in selected blue-chips helped to lift the index higher despite being in the red the whole day. Chart-wise, the FBM KLCI formed a small white spinning-top candlestick in a possible star position which indicates indecision of market direction with the appearance of buying support at current level, and the key index may stage a rebound or continue to consolidate at present level. Immediate downside support zone is at 1,579 to 1,573, where 1,573-point is the 60-day SMA support.

MACD and its histogram continued to slide lower, indicating a continued loss in the index’s momentum. Nevertheless, the MACD line is still above the zero-line, indicating the present weakness may still be a correction in a bull market. RSI (14) was marginally lower at 44.6 from 45.7 previously, and showed sign of tapering off, indicating a slow down in the bearish relative strength, and the index continued to stay in the mildly bearish zone. Stochastic was at 14.2, and has slid lower to the oversold zone for the first time, indicating very weak market strength but a rebound maybe expected ahead. Readings from the indicators showed that the FBM KLCI is currently weak and mildly bearish, and the weakness may extend until there are signs of positive reversal.

The short term trend of the FBM KLCI is currently down, whereas the medium and long term trend still remained up. The FBM KLCI is currently sitting right above the medium term 50-day SMA which is now at 1,580-point, a continue break of this support level will likely see the key index sliding towards to 60-day SMA which is now at 1,573-point, and a break below the 60-day SMA would spell the end of the medium term uptrend. With all indicators showing weaknesses in the FBM KLCI, the key index is likely to remain in consolidation for a short while.

Overnight, the Dow rebounded +74.39 points or +0.58% to close at 13,001.56. Today, the FBM KLCI is likely to trade within a range of 1,575 to 1,588.

This week's expected range: 1577 – 1613
Today’s expected range: 1575 – 1588

Resistance: 1584, 1586, 1588
Support: 1575, 1577, 1579

FBM KLCI - beginning of a bear trend?

Stocks on Bursa Malaysia closed on a bearish note yesterday as renewed concerns over the Eurozone debt crisis and weak economic data dampened investor sentiment globally. The FBM KLCI ended 8.05 points or 0.51% lower at 1,583.80 after opening 0.02 of a point higher at 1,591.87. Losers outnumbered gainers by 581 to 199 while 291 counters were unchanged. Total market volume improved to 1.663 billion shares worth RM1.595 billion from Friday’s close of 1.631 billion shares worth RM1.475 billion.

The FBM KLCI opened 0.02 of a point higher at 1,591.87 and surged to the intra-day high of 1,592.45 right after opening. The key index came under strong selling pressure and slid lower for the rest of the day with intermittent weak rebound, it hit the intra-day low of 1,580.28 before rebounding on last minute buying of selected blue-chips to close off low. Chart-wise, the FBM KLCI formed a bearish long black candlestick which indicates sellers were dominant throughout the day, and the selling pressure may continue into today. Hence, the FBM KLCI is likely to further correct downward with immediate critical support at 1,580 provided by the 50-day SMA which coincides with the lower channel support line. A break or close below the 1,580-point level would mean the end of the uptrend which started on the 26^th September 2011 and marks the beginning of a bear trend.

MACD and its histogram continued to slide lower, indicating a pickup in the downward momentum. RSI (14) slid below the 50 level to 45.7, indicating the short term relative strength of the FBM KLCI has turned mildly bearish. Stochastic continued to slide lower to 24.4, indicating weak market strength and continuation of the short term down cycle. Readings from the indicators showed that the FBM KLCI is currently weak and bearish, and is likely to extend its downward action.

The short term trend of the FBM KLCI has turned bearish as the key index is closing below all the short term moving averages, i.e. the 5, 10, 20 and 30-day SMAs. The medium to longer term trend are however, still up. Anyway, trend change always starts with the short term to the medium and then to the long term, and as of now, the critical medium term 60-day SMA support is at 1,572, and the index may find some support here. A close below this critical medium term support would mean a big bear is coming.

Overnight, the Dow fell -102.09 points or -0.78% to close at 12,927.17. Today, the FBM KLCI is likely to trade within a range of 1,566 to 1,605.

This week's expected range: 1577 – 1613
Today’s expected range: 1566 – 1605

Resistance: 1591, 1598, 1605
Support: 1566, 1573, 1578

FBM KLCI - surfacing of bearish signals

Stocks on Bursa Malaysia closed lower last Friday on continuing pessimism on regional markets plagued by renewed concerns over the Eurozone debt crisis and weak US economic data. The FBM KLCI lost 4.77 points or 0.3% to 1,591.85 after opening 0.22 point higher at 1,596.84. On a Friday-to-Friday basis, the benchmark index lost 11.27 points from previous Friday’s 1,603.12. Losers outpaced gainers by 364 to 317 while 361 counters were flat. Turnover was lower at 1.631 billion shares worth RM1.475 billion from the 1.708 billion shares worth RM1.555 billion on Thursday. Total weekly volume increased to 8.602 billion shares valued at RM7.534 billion from 4.638 billion shares, valued at RM5.913 billion the previous week.

The FBM KLCI was basically in a corrective mode last week; it opened 0.7 point lower at the intra-week high of 1,602.42 and continued to slide lower to close 5.61 points lower at 1,597.51 on Monday, in line with its regional peers as a surge in Spanish government bond yields and the slower growth of the Chinese economy renewed concerns across the markets. The FBM KLCI continued to stay in red on Tuesday to end 1.32 points lower at 1,596.19, weighed down by the Eurozone debt crisis that has struck global risk appetite, sending most equity markets weaker. The benchmark index rebounded on Wednesday in tandem with the rally in regional markets prompted by positive US corporate earnings and encouraging Spanish debt sales to end 2.67 points better at 1,598.86. The FBM KLCI continued to stay weak on Thursday to end 2.24 points easier at 1,596.62, but on Friday it lost 4.77 points to close the week at 1,591.85, the lowest point of the week.

On the weekly chart, the FBM KLCI formed a bearish black Marubozu candlestick which indicates selling pressure was dominant throughout the week as the key index opened at the highest point and closed at the lowest point of the week. With this bearish down move, the FBM KLCI is likely to slide lower in the coming week. Immediate downside support is at 1,582-point level provided by the 10-week SMA, and a break below this support level is likely to see the key index sliding lower to the next support level at 1,570. On the daily chart, the FBM KLCI also formed a bearish black Marubozu candlestick which indicates sellers were dominant for the day, and the key index has also closed below the 20-day SMA. With this bearish down move, the FBM KLCI is likely to slide lower to test the next lower support level at 1,588 provided by the 30-day SMA.

Weekly MACD has hooked downward slightly while the histogram continued to turn shorter, indicating a continued loss in the weekly momentum. Nevertheless, the weekly MACD line is still above its signal-line and is in the positive zone. Daily MACD and its histogram continued to slide lower, indicating a continued loss in the daily momentum, reflecting the corrective mode of the FBM KLCI. Weekly RSI (14) has hooked downward to 63.4 from 67.4 the previous week, indicating a loss in the weekly relative strength. Daily RSI (14), however, continued to slide lower to 51.9, and is approaching the neutral line. Weekly Stochastic has also hooked downward to 88.9 and has crossed below its slow stochastic line, indicating a possible beginning of a bear cycle. Daily Stochastic continued to slide lower to 43.7, indicating the daily short term cycle has turned bearish. Readings from the weekly and daily indicators showed that the FBM KLCI is beginning to show signs of bearishness and the bear cycle may have just begun.

The short term trend of the FBM KLCI has started to turn bearish as the key index has closed below the short term 5, 10 and 20-day SMAs. However, it is still above the 30-day SMA, which is a critical short term support trend line for the FBM KLCI. A break below the 30-day SMA, which is now at 1,588, is likely to trigger selling pressure which will likely push the benchmark index lower to the 50-day SMA support at 1,579, which coincides with the lower channel support at 1,580-point level, and a close below the 1,579 level will spell the end of the current uptrend which started on 26th September 2011. With all the technical indicators flashing bearish signals, investors can expect further downward correction for the FBM KLCI this week.

Last Friday, the Dow rose +65.16 points or +0.50% to close at 13,029.26. This week, the FBM KLCI is likely to trade within a range of 1,577 to 1,613, and for today, it is likely to trade within a range of 1,585 to 1,602.

This week's expected range: 1577 – 1613
Today’s expected range: 1585 – 1602

Resistance: 1595, 1599, 1602
Support: 1585, 1588, 1590

FBM KLCI - in sideways consolidation mode

Stocks on Bursa Malaysia closed lower yesterday as investors tracked losses in regional markets as cautious sentiment prevailed amid lingering concerns over the Euro-zone debt crisis. The FBM KLCI ended 2.24 points easier at 1,596.62 after opening 0.23 points higher at 1,599.09. Losers outpaced gainers 429 to 281 while 350 counters were unchanged. Turnover decreased to 1.708 billion shares, worth RM1.555 billion, from 2.134 billion shares, worth RM1.615 billion, registered on Wednesday.

The FBM KLCI opened 0.23 point higher at 1,599.09 and surged to the intra-day high of 1,602.12 within the first five minutes of trading. The key index then slid lower on profit-taking activity to hit the intra-day low of 1,595.54 before rebounding slightly to close off low. Chart-wise, the FBM KLCI formed a bearish black inverted-hammer like candlestick which indicates the bears were in control. With the price action dominated by selling yesterday, the FBM KLCI is likely to continue to consolidate and move range-bound today with a downward bias. Immediate downside support zone is at 1,594 to 1,587 provided by the 20 and 30-day SMA.

MACD and its histogram continued to slide lower, indicating a continued loss in the index’s short term momentum. RSI (14) hooked down to 56, indicating the short term relative strength has again weakened but is still in the mildly bullish zone. Stochastic oscillator also slid lower to 53.1, indicating a continued loss in the index’s strength and a continuation of the short term down cycle. Readings from the indicators showed that the FBM KLCI is losing its momentum and the consolidation process is likely to extend.

The short term trend of the FBM KLCI has turned sideways while the medium and longer term trend still remained up. The FBM KLCI is likely to continue with its sideways range-bound trend with an immediate overhead resistance zone at 1,602 to 1,605 while the downside support zone is at 1,594 to 1,587. With the volume staying at 1.7 billion shares, the overall market is still going to be dominated by rotational play on penny stocks with the index linked counters continued to consolidate.

Overnight, the Dow fell -68.65 points or -0.53% to close at 12,964.10. Today, the FBM KLCI is likely to trade within a range of 1,587 to 1,609.

This week's expected range: 1574 – 1623
Today’s expected range: 1587 – 1609

Resistance: 1601, 1605, 1609
Support: 1587, 1591, 1594

Stocks to watch: OLDTOWN, CANONE, DELEUM

FBM KLCI - higher on technical rebound

Stocks on Bursa Malaysia closed higher yesterday in tandem with the rally in regional markets prompted by positive US corporate earnings and encouraging Spanish debt sales. The benchmark FBM KLCI finished 2.67 points or 0.17% better at 1,598.86. Gainers outpaced losers by 394 to 350 while 337 counters were unchanged. Turnover increased to 2.134 billion shares, worth RM1.615 billion, from 2.079 billion shares, worth RM1.625 billion, recorded on Tuesday.

Taking cue from the strong performance of Wall Street overnight, the FBM KLCI opened with an up gap of 1.88 point higher at 1,598.07, and it surged to the intra-day high of 1,602.34 within the first thirty minutes of trading. Profit-taking activity then pushed the key index lower and it was bouncing between the intra-day high and low for the rest of the day. Chart-wise, the FBM KLCI formed a white inverted hammer candlestick which indicates attempts by the bulls to push the index higher but the bears were more dominant at the end of the day. The FBM KLCI is currently trapped in a triangle which indicates consolidation and the key index is likely to continue to move sideways range-bound today.

MACD and its histogram continued to slide lower, indicating a continued loss in the index’s momentum and represent a short term consolidation. RSI (14) hooked up slightly to 58 from 56.3 previously, hovering in the mildly bullish zone. Stochastic oscillator was lower at 57.1, indicating a continued loss the key index’s strength and a continuation of the short term down cycle. Readings from the indicators showed that the FBM KLCI is currently in a sideways consolidation mode, and this may continue until clear sign of breakout is observed.

The short term trend of the FBM KLCI has turned sideways as the key index is currently forming a triangle pattern, which represents short term consolidation. The medium and longer term trend, nevertheless, is still up. Immediate overhead resistance zone is at 1,602 to 1,605 while the immediate downside support zone is at 1,593 to 1,586. With the total volume continue to stay above the 2 billion shares mark, the market is likely to continue to be dominated by rotational play on the penny stock while the index linked counters consolidate themselves.

Overnight, the Dow fell -61.49 points or -0.47% to close at 13,054.05. Today, the FBM KLCI is likely to trade within a range of 1,592 to 1,607.

This week's expected range: 1574 – 1623
Today’s expected range: 1592 – 1607

Resistance: 1602, 1604, 1607
Support: 1592, 1595, 1597

FBM KLCI - marginally lower on mild selling pressure

Stocks on Bursa Malaysia ended in red yesterday, weighed down by the Eurozone debt crisis that has struck global risk appetite, sending most equity markets weaker. The FBM KLCI ended the day 1.32 points or 0.08% lower at 1,596.19 after hitting an intra-day low of 1,593.92. Despite cautious trading, gainers outnumbered losers by 355 to 341 while 351 counters closed unchanged. Turnover rose to 2.079 billion shares worth RM1.625 billion from 1.049 billion shares worth RM1.263 billion on Monday.

The FBM KLCI opened 0.24 point higher at 1,597.75 and climbed to the intra-day high of 1,600.67 at mid-morning. However, selling pressure which emerged pressed the key index lower for the rest of the day to hit the intra-day low of 1,593.92 before rebounding slightly to close off low. Chart-wise, the FBM KLCI formed a black spinning-top candlestick which indicates indecision of market direction and sellers were still slightly dominant. The presence of a spinning-top candlestick after a prior downtrend indicated that the market was reluctant to move lower and may stage a rebound.

MACD and its histogram continued to slide lower, indicating a continued loss in the index’s momentum. Nevertheless, as the MACD is still above the zero-line, current weakness is being viewed as just a correction in a bull market. RSI (14) was lower at 56.3, indicating a continued loss in the short term relative strength, and is now moving lower into the mildly bullish zone. Stochastic was lower at 62.3 and has crossed below the slow stochastic line, indicating a loss in the market strength and possibly a continuation of the down cycle. Readings from the indicators showed that the FBM KLCI is losing its momentum and is likely to continue to consolidate.

The immediate short term trend of the FBM KLCI is down as the key index has closed below the 5 and 10-day SMA for the last two days. However, its medium to long term trend still remained up. With the momentum indicators showing a continued loss in the index’s momentum, the FBM KLCI is likely to stay sideways range-bound for the short term. Immediate downside support zone is at 1,593 to 1,586 while the overhead resistance zone is at 1,600 to 1,605. The sudden surged in the total volume yesterday was due to active trading in the ACE market stocks, while the main board was in consolidation mode.

Overnight, the Dow rose +194.13 points or +1.50% to close at 13,115.54. Today, the FBM KLCI is likely to trade within a range of 1,586 to 1,608.

This week's expected range: 1574 – 1623
Today’s expected range: 1586 – 1608

Resistance: 1600, 1604, 1608
Support: 1586, 1590, 1593

Stocks to watch: WTK, HIBISCS, HIBISCS-WA, DOMINAN

FBM KLCI - lower in line with regional weakness

Stocks on Bursa Malaysia closed on a bearish note yesterday as renewed concerns over the Eurozone debt crisis dampened investor sentiment globally. The weaker performance of the local bourse was in line with its regional peers as a surge in Spanish government bond yields and the slower growth of the Chinese economy renewed concerns across the markets. The FBM KLCI ended 5.61 points lower at 1,597.51 after opening 0.7 of a point easier at 1,602.42. Losers outnumbered gainers by 428 to 272 while 320 counters were unchanged. Total market volume slipped to 1.049 billion shares worth RM1.263 billion from Friday’s close of 1.348 billion shares worth RM1.656 billion.

Taking cue from the bearish performance of Wall Street last Friday, the FBM KLCI opened 0.7 point lower at 1,602.42 and plunged to the intra-day low of 1,594.63 within the first five minutes of trading. The key index then rebounded to 1,601 but continued to succumb to selling pressure and ended the day below the 1,600-point level. Chart-wise, the FBM KLCI formed a bearish black candlestick which indicates the bears were in control for the day, and confirmed the possible reversal signal generated by the spinning-top candlestick formed on Friday. With the bearish down move yesterday, the FBM KLCI had closed below the short term 5 and 10-day SMA, and is likely to continue to consolidate. Immediate downside support zone is at 1,594 to 1,590, where 1,590 is the 20-day SMA support level, and the next lower support level is expected at 1,586 provided by the 30-day SMA.

MACD has turned downward and its histogram also turned longer southward, indicating a changed in the momentum to a bearish note. Nevertheless, the MACD is still above the zero, and hence, the current weakness may well be just a short term correction in a bull market. RSI (14) hooked downward to 57.4 from 62.2 previously, indicating a weakening of the short term relative strength to the mildly bullish level. Stochastic hooked downward marginally to 68.4, indicating a pause in the short term up cycle and the market strength. Readings from the indicators showed that the FBM KLCI is currently undergoing a short term correction and consolidation process, and this may continue until clear signs of breakout are seen.

The medium to longer term uptrend of the FBM KLCI still remained intact while for the short term, the key index may moves sideways range bound until a breakout is seen above the all-time-high level of 1,609.33. With total volume just above the one billion shares level, the broad market is likely to remain in a slow and sluggish mode with rotational play on the penny stocks.

Overnight, the Dow rebounded +71.82 points or +0.56% to close at 12,921.41. Today, the FBM KLCI is likely to trade within a range of 1,586 to 1,611.

This week's expected range: 1574 – 1623
Today’s expected range: 1586 – 1611

Resistance: 1602, 1606, 1611
Support: 1586, 1590, 1593

FBM KLCI - likely to move range-bound

Stocks on Bursa Malaysia ended marginally higher last Friday on improved sentiment. The FBM KLCI rose 1.85 points or 0.12% to 1,603.12 after hovering between 1,600.75 and 1,604.71, while on a Friday-to-Friday basis the key index gained 4.25 points from 1,598.87 registered the previous Friday. Gainers led losers by 400 to 325 while 355 counters were unchanged. Total volume surged to 1.348 billion shares worth RM1.656 billion from Thursday’s 1.108 billion shares valued at RM1.601 billion, while total weekly volume declined to 4.638 billion shares, valued at RM5.913 billion, from previous week’s turnover of 5.41 billion shares worth RM6.23 billion as last week was holiday shortened due to a public holiday on Wednesday.

The FBM KLCI opened last week on a black day which saw the key index sliding to the intra-day low of 1,588.58, losing 10.29 points at its worst before rebounding to close off low at 1,591.58. Taking cue from the weak performance on Wall Street overnight, the FBM KLCI opened with a down gap of 3.51 points at 1,587.77 and slid lower to the intra-week low of 1,586.99 before rebounding to close in the positive territory with a 5.89 points gain at 1,597.17. Bursa Malaysia was closed on Wednesday in conjunction with the installation ceremony of Seri Paduka Baginda Yang di-Pertuan Agong. The FBM KLCI continued to move higher on Thursday with a gain of 4.1 points to 1,601.27 and Friday saw the benchmark index stand firmly above the 1,600-point level and ended the week at 1,603.12.

On the weekly chart, the FBM KLCI formed a white hanging-man candlestick, which indicates the bears were initially strong in driving the index lower but later the bulls re-surfaced and push the key index back to the positive territory. Technically, the appearance of a hanging-man candlestick after an uptrend indicates weakness is surfacing and a possible reversal is in sight. On the daily chart, the FBM KLCI formed a white spinning-top candlestick which indicates indecision of market direction and a possible reversal ahead. Hence, the key index may take a pause to move range-bound with an upward bias as the underlying longer term trend is still up. Immediate downside support zone is envisaged at 1,587 to 1,579 provided by the 5 and 10-week SMA, while the immediate overhead resistance is at 1,609.33, the all-time-high level.

Weekly MACD continued to rise, but with a slower momentum as shown by the shorter histogram. Daily MACD was marginally high but is still below the signal line, and the daily histogram was shorter upward, indicating a very gradual pickup in the momentum. Weekly RSI (14) was higher at 67.4 and the daily RSI (14) was also higher at 62.2, indicating both the weekly and daily relative strength are in the bullish zone. Weekly Stochastic oscillator was higher at 94.7 but showed sign of tapering off, indicating a slow down in the weekly upward momentum. Daily stochastic hooked up to 68.7 from 58.8, and has crossed above the slow stochastic line, indicating the short term down cycle or correction was over and a continuation of the uptrend. Readings from the weekly and daily indicators showed that the FBM KLCI is still in a bullish state, but the upward momentum was a bit weak, and hence, the key might go into a range-bound consolidation but with an upward bias.

The overall uptrend of the FBM KLCI remained intact as the key index continued to stay above all the short, medium and long term moving averages. However, the upward momentum was a little weak as shown by the momentum indicators. In the absence of strong stimulus on the horizon to spark a desired rally to bring the market higher, the FBM KLCI may sustain the range-bound pattern with a slight positive bias for another week or until a clearer picture emerges.

Last Friday, the Dow fell -136.99 points or -1.05% to close at 12,849.59. This week, the FBM KLCI is likely to trade within a range of 1,574 to 1,623, and for today, it is likely to trade within a range of 1,597 to 1,609.

This week's expected range: 1574 – 1623
Today’s expected range: 1597 – 1609

Resistance: 1605, 1607, 1609
Support: 1597, 1599, 1601

Stocks to watch: KFM, CYPARK, N2N, CANONE, JOHOTIN

FBM KLCI - closed above 1,600

Stocks on Bursa Malaysia ended broadly higher yesterday with interest in selected blue-chips pushed the FBM KLCI to end above the psychological 1,600-point level. External factors, including weaker regional bourses, had capped the local indices from going up further. The market barometer that opened 0.22 of a point higher at 1,597.39 finished 4.1 points or 0.26% higher at 1,601.27 from Tuesday’s 1,597.17. Decliners led advancers 366 to 360 while 321 counters traded unchanged. Total volume increased to 1.108 billion shares valued at RM1.601 billion from 1.105 billion units valued at RM1.577 billion on Tuesday.

The FBM KLCI opened 0.22 of a point higher at 1,597.39 and slipped to the intra-day low of 1,593.57 within the first five minutes of trading. It then rebounded and continued to move higher with intermittent mild pullback on profit-taking for the rest of the day. The key index hit the high of 1,602.05 before closing slightly off high. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates a continuation of the up move from Tuesday’s rebound. It is now standing above the psychological resistance level of 1,600-point and is expected to continue moving higher today to re-challenge the historical high level of 1,609.33.

MACD was almost flat but its histogram has turned shorter upward, indicating an initial change in the momentum from down to up. RSI (14) was higher at 61.2, indicating a return of the short term relative strength to the bullish zone. Stochastic was marginally lower at 58.8, indicating a mild weakening of the short term strength and the down cycle is still intact. Mixed signals from the indicators showed that the momentum of the FBM KLCI is showing initial signs of reversal but more data is required to confirm this.

The general trend of the FBM KLCI is up as it is staying above all the short, medium and long term moving averages. Immediate overhead resistance zone is at 1,602 to 1,610 while the immediate downside support zone is at 1,593 to 1,586. With overall volume remained at the low level of just above one billion shares, the broad market is likely to remain sluggish with rotational play on penny stocks.

Overnight, the Dow rose +181.19 points or +1.41% to close at 12,986.58. Today, the FBM KLCI is likely to trade within a range of 1,587 to 1,611.

This week's expected range: 1570 – 1630
Today’s expected range: 1587 – 1611

Resistance: 1605, 1608, 1611
Support: 1587, 1590, 1595

Stocks to watch: JOHOTIN, BRAHIMS, OLDTOWN

FBM KLCI - higher on technical rebound

Stocks on Bursa Malaysia closed higher on Tuesday with investors increasing their interest in selected heavyweights. Positive economic data in trade and manufacturing statistics, released earlier Tuesday, led to local investors buying up, especially plantation stocks. The FBM KLCI closed 5.89 points or 0.37% higher at 1,597.17 after opening 3.51 points lower at 1,587.77. Gainers outnumbered losers by 365 to 332 while 333 counters were unchanged. Total volume improved to 1.105 billion units valued at RM1.577 billion from Monday’s closing figure of 1.076 billion shares worth RM1.077 billion. Bursa Malaysia was closed yesterday in conjunction with the installation ceremony of Seri Paduka Baginda Yang di-Pertuan Agong.

Taking cue from the weak performance on Wall Street, the FBM KLCI opened with a down gap of 3.51 points at 1,587.77 and slid lower to the intra-day low of 1,586.99 within the first five minutes of trading. The FBM KLCI then rebounded and move higher for the rest of the day to hit the intra-day high of 1,598.53 before pulling back to close off high. Chart-wise, the FBM KLCI formed a bullish white piercing-line candlestick which indicates a fight back of the bulls after being whipped down on Monday. The white piercing-line is a bottom reversal candlestick pattern that requires a follow through rebound for confirmation, and the key index is likely to trade higher today. Immediate overhead resistance is expected at the psychological resistance level of 1,600.

MACD and its histogram continued to slide lower, but the MACD showed sign of tapering off, indicating a reduction in the downward momentum. RSI (14) hooked upward to 58.9 from 55.6 previously, reflecting the rebound in the key index, and the short term relative strength is still in the mildly bullish zone. Stochastic has turned flat at 59.9, signaling a pause in the downward momentum, and nevertheless, the short term cycle is still down. Readings from the indicators showed that the FBM KLCI is currently in a consolidation.

The overall trend of the FBM KLCI remained up, and the short term trend has also reversed up with Tuesday’s rebound as the key index has again closed above the short term 5 and 10-day SMA, and the rebound on Tuesday may carry the key index higher today. Immediate overhead resistance zone is at 1,600 to 1,609 while the downside support zone is at 1,586 to 1,580. With the volume remained thin at around 1.1 billion shares, the overall market is likely to remain in a soft mode with rotational play on the penny stocks.

Overnight, the Dow rose +89.46 points or +0.70% to close at 12,805.39. Today, the FBM KLCI is likely to trade within a range of 1,578 to 1,610.

This week's expected range: 1570 – 1630
Today’s expected range: 1578 – 1610

Resistance: 1602, 1606, 1610
Support: 1578, 1582, 1589

Stocks to watch: MEGB, TGOFFS, YHS

FBM KLCI - lower on profit-taking

Share prices on Bursa Malaysia closed lower yesterday as investors continued to reduce their holdings, particularly in selected heavyweights, and investors were awaiting fresh leads from the US and European markets when these bourses opened later in the day, after being closed last Friday due to the Easter rest day. The benchmark FBM KLCI ended 7.59 points or 0.47% lower at 1,591.28 after opening 0.16 of a point higher at 1,599.03. Losers led gainers by 468 to 238 while 322 counters were unchanged. Total turnover declined to 1.076 billion shares worth RM1.077 billion from last Friday’s close of 1.275 billion units valued at RM1.143 billion.

The FBM KLCI opened 0.16 point higher at 1,599.03 but slid lower on selling pressure. It hit the low of 1,588.58 before rebounding to close off low. The key index was trading in the negative territory for a major part of the day. Chart-wise, the FBM KLCI formed a bearish engulfing candlestick which indicates the bears were fully in control. With the bearish down move yesterday, the FBM KLCI is likely to continue to slide lower today with an immediate downside target of 1,586 and 1,580.

MACD has made a dead-cross below the signal-line, flashing a short term sell signal. Nevertheless, as MACD is still above the zero-line, current weakness is being viewed as a short term correction in a bull market. RSI (14) plunged lower to 55.6 from previous reading of 61.7, indicating the short term relative strength is turning weaker but remained in the mildly bullish zone. Stochastic continued to slide lower to 59.9, indicating further weakening of the FBM KLCI and a continuation of the short term down cycle. Readings from the indicators showed that the FBM KLCI is undergoing a short term correction and may further consolidate.

The short term trend of the FBM KLCI is currently down as the key index has closed below the immediate short term 5 and 10-day SMA, and hence, the key index is expected to continue sliding lower to the next lower support zone at 1,586 to 1,582 provided by the 20 and 30-day SMA, and a close below the 30-day SMA may sound an alarm that the short term trend could have turn bearish. Nevertheless, the medium and long term uptrend is still intact.

Overnight, the Dow fell -130.55 points or -1.00% to close at 12,929.59. Today, the FBM KLCI is likely to trade within a range of 1,576 to 1,610.

This week's expected range: 1570 – 1630
Today’s expected range: 1576 – 1610

Resistance: 1598, 1604, 1610
Support: 1576, 1582, 1586

FBM KLCI - likely to take a breather

Stocks on Bursa Malaysia closed marginally higher last Friday, despite mixed trading in the regional markets due to renewed concerns over the European financial crisis, as Spain had revived fiscal concerns with its 10-year benchmark bond yield rising to 5.8 percent, the highest in five months. The benchmark FBM KLCI finished 5.43 points or 0.34% higher at 1,598.87, and week-on-week, it gained 2.54 points from 1,596.33 previously after recorded the new all-time high of 1,609.33 on last Tuesday. Market breadth was positive with gainers led losers by 457 to 248 while 324 counters were unchanged. Turnover was higher at 1.28 billion shares worth RM1.14 billion from 1.14 billion shares worth RM1.22 billion on Thursday.

The FBM KLCI started last week with a bang which saw the benchmark FBM KLCI advancing 7.45 points to close Monday at 1,603.78, surpassing the previous all-time high of 1,597.08, in line with a rally in the regional markets, and supported by gains in banking stocks. The FBM KLCI registered another new intra-day record high of 1,609.33 before settling at 1,606.63 on Tuesday, charting another new record close. Stocks on Bursa Malaysia closed lower on Wednesday on profit-taking, dampened by banking stocks amid weaker sentiments in the regional markets, as investors remained cautious due to the disappointed economic news from Europe and the United States, and the benchmark FBM KLCI declined 7.36 points to close at 1,599.27. Weaker sentiment in the Asian market brought on by a weak Spanish bond auction inflamed concerns about the European debt crisis as well as concerns on the US economy on Thursday, and the FBM KLCI declined another 5.83 points to 1,583.75. The market rebounded on Friday, and the FBM KLCI gained 5.43 points to finish the week at 1,598.87.

On the weekly chart, the FBM KLCI formed a white spinning-top candlestick with a slightly longer upper shadow which indicates uncertainty was surfacing in the market, and the longer upper shadow indicated the market was experiencing some selling pressure when it hit new record high. Hence, the FBM KLCI is likely to consolidate or further correct downward this week, with an immediate downside support zone at 1,590 to 1,573. On the daily chart, the FBM KLCI rebounded and formed a bullish white candlestick, and the key index is likely to move higher today. However, as the rebound last Friday managed to take the key index to a high of 1,600.60 but could not breakthrough the key psychological resistance level, the 1,600-point will continue to post as a strong resistance level.

Weekly MACD continued to climb higher, but its histogram was shorter, indicating the weekly upward momentum is weakening. Daily MACD continued to slide lower and so is the histogram, indicating a continued loss in the daily momentum, and hence, the FBM KLCI is likely to further consolidate itself from the daily perspective. Weekly RSI (14) was marginally higher at 66.7 from 66.3 previously and is tapering off, indicating a mild improvement in the weekly relative strength, and weakness could be developing. Daily RSI (14) has hooked upward to 61.7 from 58.7 previously, reflecting the rebound and change of the daily relative strength from mildly bullish to the bullish zone. Weekly Stochastic was higher at 94.4 from 91.6, indicating a marginal improvement of the weekly market strength. Daily stochastic, however, continued to slide lower to 67.8, indicating the continued weakening of the daily strength and a continuation of the short term down cycle. Readings from the weekly and daily indicators showed that the FBM KLCI is still bullish from the weekly perspective, while from the daily perspective it might continue to consolidate.

The overall trend of the FBM KLCI still remained up, as the key index continue to stay above all the short, medium and long term moving averages. The weekly indicators show that the key index is still in a bullish state, but there are signs from the weekly indicators that the upward momentum is weakening, and the benchmark FBM KLCI is poised for a correction. Nevertheless, the correction may be shallow and may post as an opportunity to buy low in an uptrend.

Last Friday, the US market was closed for Easter holiday. This week, the FBM KLCI is likely to trade within a range of 1,570 to 1,630, and for today, it is likely to trade within a range of 1,588 to 1,608.

This week's expected range: 1570 – 1630
Today’s expected range: 1588 – 1608

Resistance: 1602, 1605, 1608
Support: 1588, 1591, 1595

FBM KLCI - lower on continued profit-taking

Stocks on Bursa Malaysia closed lower yesterday amid profit taking and weaker sentiment in the regional markets. The weaker sentiment in the Asian market was brought on by a weak Spanish bond auction that inflamed concerns about the European debt crisis as well as concerns on the US economy. The benchmark FBM KLCI declined 5.83 points or 0.36% to 1,583.75, after opening 3.61 points lower at 1,595.66. Decliners beat advancers by 352 to 342 while 317 counters were unchanged. Turnover was lower at 1.14 billion shares worth RM1.22 billion from the 1.195 billion shares worth RM1.1 billion on Wednesday.

Taking cue from the weak performance of Wall Street overnight, the FBM KLCI opened with a down gap of 3.61 points at 1,595.66 and slid lower to the intra-day low of 1,591.85 on continued profit-taking activity. The key index then rebounded in the afternoon session to hit the intra-day high of 1,596.46 before some last minute sell down which brought the key index deeper into the negative territory. Chart-wise, the FBM KLCI formed a small black spinning-top like candlestick which represents consolidation with a downward bias, and the key index is likely to continue to consolidate today. The FBM KLCI is in a critical position now as it has hit the lower support trend line and rebounded from it, and a break below the support trend line is likely to see the key index sliding lower to the 1,580-point level.

MACD has hooked downward, and so is the histogram, indicating a weakening of the momentum. Nevertheless, as the MACD is still above the signal-line, the current weakness is viewed as just a correction. RSI (14) was lower at 58.7 from 63.7 previously, indicating a continued weakening of the short term relative strength and the FBM KLCI is now in the mildly bullish state. Stochastic continued to plunge lower to 75.2, indicating a continuation of the short term down cycle and weakening of the market strength. Readings from the indicators showed that the FBM KLCI is undergoing a correction, and is likely to further consolidate.

The FBM KLCI has just closed below the 5-day SMA, reflecting the short term correction. The key index is now sitting on the 10-day SMA which provided the immediate support yesterday, and a break below this 10-day SMA support which is now at 1,592 is likely to see the key index sliding lower to the 20 and 30-day SMA support zone at 1,582 to 1,580. Nevertheless, the overall trend of the FBM KLCI still remained up. As the total volume continued to dwindle, the overall market is likely to remain in a consolidation mode with some penny stocks in rotational play.

Overnight, the Dow fell -14.61 points or -0.11% to close at 13,060.14. Today, the FBM KLCI is likely to trade within a range of 1,586 to 1,601.

This week's expected range: 1571 – 1611
Today’s expected range: 1586 – 1601

Resistance: 1596, 1599, 1601
Support: 1586, 1589, 1591

FBM KLCI - lower on pullback correction

Stocks on Bursa Malaysia closed lower yesterday on profit-taking, dampened by banking stocks amid weaker sentiments in the regional markets, as investors remained cautious due to the disappointed economic news from Europe and the United States. The benchmark FBM KLCI declined 7.36 points or 0.46% to close at 1,599.27 after fluctuating between 1,597.8 and 1,609.16 throughout the day. Decliners led advancers by 501 to 235 while 346 counters remained unchanged. Turnover was lower at 1.195 billion shares worth RM1.1 billion from Tuesday’s 1.25 billion shares worth RM1.36 billion.

The FBM KLCI opened 0.91 of a point higher at 1,607.54 and surged to the intra-day high of 1,609.16 within the first five minutes of trading. Thereafter, the key index slid lower for the rest of the day on heavy profit-taking activity to hit the intra-day low of 1,597.80 before rebounding slightly on bargain hunting activity to close off low. Chart-wise, the FBM KLCI formed a bearish black candlestick which indicates sellers were dominant for the day, and it also served to confirm the top reversal signal issued by the black spinning-top candlestick formed a day earlier. With the bearish down move yesterday, the FBM KLCI is likely to further correct downward today. Immediate downside support is envisaged at 1,591-point level, the 38.2% Fibonacci retracement level of the range from the pivot low of 1,562.97 on March 13th to the pivot high of 1,609.33 on April 3rd.

MACD has turned flat, whereas its histogram has turned slightly shorter, indicating a pause in the upward momentum. RSI (14) took a dip to 63.7 from 70.7 a day earlier, indicating a pullback of the short term relative strength to the bullish zone from the very bullish or overbought zone. Stochastic has hooked downward to 88.5 from 97.3 a day earlier, and has crossed below the slow stochastic line, reflecting the correction and the possible beginning of a short term down cycle. Readings from the indicators showed that the FBM KLCI is undergoing a correction, which is healthy after the recent strong run up to a new record high level.

The underlying uptrend of the FBM KLCI remains unchanged, while the current weakness is viewed as a healthy correction to the uptrend, and provided an opportunity to accumulate quality shares at a lower level. The immediate term target for the FBM KLCI at 1,620 to 1,625 and the medium term target of 1,675 to 1,700 remains unchanged for the time being until a confirmed trend change is observed.

Overnight, the Dow fell -124.80 points or -0.95% to close at 13,074.75. Today, the FBM KLCI is likely to trade within a range of 1,583 to 1,621.

This week's expected range: 1571 – 1611
Today’s expected range: 1583 – 1621

Resistance: 1607, 1614, 1621
Support: 1583, 1590, 1594

Stocks to watch: JCY, WELLCAL, MPAY

FBM KLCI - toppish signal amid new record high

Stocks on Bursa Malaysia closed mixed yesterday, on weaker buying momentum despite the positive sentiment on regional markets, as most Asian stocks rose yesterday, driven by the positive manufacturing data from the US and China. The benchmark FBM KLCI advanced 2.85 points or 0.18% to close at 1,606.63 after opening 3.35 points higher at 1,607.13. Decliners beat advancers by 379 to 354 while 344 counters were unchanged. Turnover was lower at 1.25 billion shares worth RM1.36 billion from the 1.44 billion shares worth RM1.4 billion on Monday.

Taking cue from the strong performance of Wall Street overnight, the FBM KLCI opened with an up gap of 3.35 points at 1,607.13 and surged to the intra-day high of 1,609.33 within the first five minutes of trading, charting another new intra-day record high for the FBM KLCI. The key index, however, retreated on profit-taking activity to the intra-day low of 1,604.76 before rebounding to close off low at 1,606.63, registering another new record close. Chart-wise, the FBM KLCI formed a bearish black spinning-top candlestick in a possible star position, and a down move of the key index today would produce a bearish evening star formation. The appearance of a black spinning-top at this high level showed that the market was hesitant to move further and profit-taking activity was dominant. Hence, there’s a high likelihood that the FBM KLCI may undergo a healthy pullback correction today.

MACD and its histogram continued to climb higher, indicating a continued improvement in the index’s momentum. RSI (14) was higher at 70.7, indicating a very bullish condition of the FBM KLCI. However, it has stepped into the short term overbought zone, and a correction may be expected ahead. Stochastic was higher at 97.3, indicating a very strong market strength and continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI is currently in a very bullish state, but is overbought, and is likely to pullback.

The underlying trend of the FBM KLCI remained up as the key index continue to stay above all the short, medium and long term moving averages. However, from a broader picture, an ending diagonal triangle (indicated by the trend lines in green) is in the forming, and a break below the lower support trend line may spell a possible trend change. Nevertheless, the FBM KLCI is likely to maintain its uptrend as of now until something strong enough to change its trend happened.

Overnight, the Dow fell -64.94 points or -0.49% to close at 13,199.55. Today, the FBM KLCI is likely to trade within a range of 1,599 to 1,614.

This week's expected range: 1571 – 1611
Today’s expected range: 1599 – 1614

Resistance: 1609, 1612, 1614
Support: 1599, 1602, 1604

Stocks to watch: AT, APFT, SWKPLNT, NOTION

FBM KLCI - closing at new record high of 1,603.78

Stocks on Bursa Malaysia closed higher yesterday in line with a rally in the regional markets, and supported by gains in banking stocks. The benchmark FBM KLCI advanced 7.45 points or 0.47% to 1,603.78, surpassing the previous all-time high of 1,597.08. Advancers beat decliners by 400 to 353 while 324 counters were unchanged. Turnover was higher at 1.44 billion shares worth RM1.4 billion from 1.24 billion shares worth RM2.083 billion last Friday.

The FBM KLCI opened 1.76 points lower at 1,594.57 and moved higher to hit a new record high of 1,598.06 in early morning trade, but heavy profit-taking activity sent the key index to touch the intra-day low of 1,590.27. From here, the FBM KLCI recovered its lost ground and climb higher gradually to hit a new intra-day record high of 1,603.96 before pulling back marginally to close at the new record level of 1,603.78. Chart-wise, the FBM KLCI formed a bullish white candlestick which continues the uptrend of the previous candlestick. With this bullish breakout, the FBM KLCI has entered a new uncharted territory and is likely to continue moving higher to chart new record high level. Immediate overhead resistance is expected at 1,609, 1,613 and 1,618-point levels.

MACD continued to move higher after making the golden-cross last Friday, indicating a change in the momentum from a consolidation mode to a bullish mode. RSI (14) surged higher to 69.5, indicating a continued improvement in the relative strength from bullish to very bullish. Nonetheless, as the RSI is approaching the short term overbought zone of 70, a pullback correction is expected ahead. Stochastic surged higher to 94 from 85.6 previously, indicating a continuation of the short term up cycle and also the improvement of the market strength. Readings from the indicators showed that the FBM KLCI has turned bullish, and the bullish momentum is likely to carry the key index to a higher level. Nevertheless, as the oscillators are approaching the overbought zone, some pullback correction is expected ahead.

The trend of the FBM KLCI remained up and bullish. As the key index has just closed above the middle line of the uptrend channel, it may continue moving higher, and strong resistance is expected at the 1,620-point level exerted by the resistance line (in green). The index-linked counters are likely to continue with their buoyant performance as the index scale new high, while the penny stocks are likely to continue their current mode of consolidation.

Overnight, the Dow rose another +52.45 points or +0.40% to close at 13,264.49. Today, the FBM KLCI is likely to trade within a range of 1,581 to 1,618.

This week's expected range: 1571 – 1611
Today’s expected range: 1581 – 1618

Resistance: 1609, 1613, 1618
Support: 1581, 1585, 1594

Stocks to watch: ARMADA, BIMB, MBSB

FBM KLCI - likely to chart new record high

Stocks on Bursa Malaysia closed sharply higher last Friday on window-dressing activity, in line with the rally in regional markets fuelled by the ample liquidity injection from global central banks and accommodative monetary policy. The benchmark FBM KLCI advanced 10.89 points or 0.69% to 1,596.33, close to its all-time high of 1,597.08, and a week-on-week gain of 10.50 points from 1,585.83 previously. Advancers beat decliners by 402 to 360 while 334 counters were unchanged. Overall volume was thinner with 1.245 billion shares worth RM2.083 changed hands compared with 1.496 billion shares valued at RM1.398 billion on Thursday. Weekly turnover stood at 7.747 billion shares valued at RM7.784bil, against 12.395 billion units worth RM8.045bil which changed hands the prior week.

The benchmark FBM KLCI was basically in a consolidation mode during the first four days of the week, where on Monday, the key index closed 2.85 points lower at 1,582.98 after trading in a narrow range. The FBM KLCI rose 5.12 points to 1,588.10 on Tuesday buoyed by the rally in regional markets sparked by comments from US Federal Reserve chairman Ben Bernanke that easy monetary policy would remain to reduce unemployment. On Wednesday, the FBM KLCI closed 4.35 points lower to 1,583.75 in tandem with losses in global markets. The key index gained 1.69 points to close at 1,585.44 on Thursday after hitting the intra-week low of 1,581.79. Friday saw active window-dressing activity as the first quarter came to a close which helped pushed the benchmark index higher with a gain of 10.89 points to 1,596.33, just 0.75 of a point below the all time high of 1,597.08.

On the weekly chart, the FBM KLCI formed a bullish white candlestick which indicates continuation of buying supports from previous week, and on the daily chart, the FBM KLCI formed a bullish white candlestick with a breakaway gap from the hammer candlestick formed on Thursday, and this indicates a bullish euphoria in action. The upward momentum may carry the key index to a higher level in the uncharted territory this week to test the psychological resistance level of 1,600-point. If the FBM KLCI is able to breakthrough the 1,600-point with conviction, it may have a possible near term target of 1,625, while from the medium term perspective it may have a possible target of 1,670 to 1,700.

Weekly MACD continued to climb higher, whereas its histogram was slightly shorter, indicating a continuation of the bullish weekly momentum with mild internal weakness. Daily MACD had just made a golden-cross over its signal-line, flashing out a buy signal. Weekly RSI (14) was higher at 66.3 and the daily RSI (14) was also higher at 66.1, indicating both weekly and daily relative strength are in the bullish mode. Weekly Stochastic has hooked up and crossed over its weekly slow stochastic line, indicating the consolidation phase was probably over, and the daily stochastic also hooked upward to 85.6, indicating a continuation of the short term up cycle after the recent consolidation. Readings from both the weekly and daily indicators showed that the FBM KLCI has just turned bullish after the recent consolidation phase, and the upward momentum may carry it to a higher level.

The uptrend of the FBM KLCI remained intact as it is staying above all the short, medium and long term moving averages. Immediate overhead resistance will be at the 1,600-point psychological level while the downside support zone is at 1,588 to 1,581. With almost all technical momentum and trend indicators flashing bullish signals, investors can expect further upside for the FBM KLCI to chart new record highs this coming week. However, given the weak follow-through buying momentum as shown by the dwindling volume on the broader market, selling on strength may increase to limit upside potential. The ACE market penny stocks may continued their consolidation while the index-linked blue chips could likely dip on profit-taking post first-quarter window-dressing.

Last Friday, the Dow rose +66.22 points or +0.50% to close at 13,212.04. This week, the FBM KLCI is likely to trade within a range of 1,571 to 1,611, and for today, it is likely to trade within a range of 1,583 to 1,605.

This week's expected range: 1571 – 1611
Today’s expected range: 1583 – 1605

Resistance: 1599, 1602, 1605
Support: 1583, 1585, 1591