Millionaire Trend Trader: FBM KLCI - higher on technical rebound

Thursday, June 28, 2012

FBM KLCI - higher on technical rebound

Stocks on Bursa Malaysia ended on a mixed note with The FBM KLCI finished above the 1,600-level yesterday, taking cue from gains on regional markets. The benchmark index settled at 1,601.89, inching up 7.79 points or 0.49% after shuffling between 1,593.56 and 1,601.89 throughout the day. It had opened 0.37 of a point better at 1,594.47. Losers outnumbered gainers by 366 to 364, while 309 counters were unchanged. Total volume rose to 1.179 billion valued at RM1.631 billion from the 1.047 billion shares worth RM1.479 billion transacted on Tuesday.

The FBM KLCI opened 0.37 point lower and slipped to the intra-day low of 1,593.56 within the first five minutes after opening, and it rebounded strongly to move higher for the rest of the day to end at the day’s high. Chart-wise, the FBM KLCI formed a bullish Harami candlestick which indicates fight back by the bulls or technical rebound after a day of hammering by the bears, and the key index is likely to move higher today on follow through buying. Immediate overhead resistance zone is at 1,603 to 1,611 while the immediate downside support zone is at 1,593 to 1,590.

MACD has hooked upward but its histogram was shorter, indicating a mixed condition or consolidation. RSI (14) hooked upward to 61.7 fro 58 previously, indicating the short term relative strength of the FBM KLCI has again turned bullish. Stochastic, however, continued to slip lower to 73.4, indicating the short term down cycle is not over yet. Mixed signals from the indicators showed that the FBM KLCI is still in a consolidation mode but with an upward bias.

With the rebound yesterday, the FBM KLCI has again closed above the short term 5-day SMA and other medium to long term moving averages, indicating the uptrend of the FBM KLCI is still intact. With the listing of Felda Global Ventures Holdings Bhd today, the sentiment of the market is likely to be bullish.

Overnight, the Dow rose +92.34 points or +0.74% to close at 12,627.01. Today, the FBM KLCI is likely to trade within a range of 1,588 to 1,611.

This week's expected range: 1559 – 1636
Today’s expected range: 1588 – 1611

Resistance: 1605, 1608, 1611
Support: 1588, 1590, 1596

Stocks to watch: PERMAJU, INGRESS, WELLCAL, BIMB, DIGISTA

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Thursday, June 28, 2012

FBM KLCI - higher on technical rebound

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