Millionaire Trend Trader: FBM KLCI - closing at all-time high

Tuesday, July 17, 2012

FBM KLCI - closing at all-time high

Stocks on Bursa Malaysia closed on a bullish note yesterday with the benchmark FBM KLCI finishing at an all-time high of 1,635.96, up 9.58 points or 0.58%, buoyed by buying interest in selected finance and utility blue chips. Bullish regional bourses as well as overnight gains on Wall Street helped to lift the local bourse. The index’s previous all-time high was recorded on July 11 at 1,629.45. Advancers outpaced decliners by 476 to 298 while 328 counters closed unchanged. Total volume decline to 1.112 billion shares, valued at RM1.509 billion, from 1.29 billion shares valued at RM1.616 billion last Friday.

Taking cue from the strong performance of Wall Street last Friday, the FBM KLCI opened with an up gap of 1.89 points at 1,628.37 and rallied higher to touch the all-time high level of 1,635.96 at late morning, the key index pulled back to consolidate and again moved higher on last minute buying to close at the highest point of the day. Chart-wise, the FBM KLCI formed a bullish white Marubozu candlestick which indicates buyers were very strong and was in control, and the buying momentum is likely to push the benchmark index higher. However, it may not be a good sign when the index gets too bullish near the top as it can also mean distribution. Immediate upside target is pegged at 1,641 follows by 1,650.

MACD and its histogram has both turned upward, indicating a pickup in the momentum after a short breather. RSI (14) was higher at 72.7 from 68.6, indicating an improvement of the relative strength from bullish to very bullish. Stochastic hooked upward to 88.9, but is still below the slow stochastic line, indicating a possible change in the short term cycle from down to up. Readings from the indicators showed that the momentum of the FBM KLCI has again pickup and is turning very bullish.

The FBM KLCI is currently very bullish and on a strong uptrend, and is likely to continue to chart new high in the short term with an immediate upside target of 1,641 to 1,650, and from a longer term perspective, it is likely to reach 1,661 and 1,700. From the total volume and value traded, the overall market is in a lukewarm state with blue-chip counters leading the way and is likely to remain so.

Overnight, the Dow fell -49.88 points or -0.39% to close at 12,727.21. Today, the FBM KLCI is likely to trade within a range of 1,623 to 1,644.

This week's expected range: 1600 – 1650
Today’s expected range: 1623 – 1644

Resistance: 1639, 1641, 1644
Support: 1623, 1625, 1630

Stocks to watch: IJMLAND, PERDANA, PRESBHD, MALTON, AMEDIA

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Tuesday, July 17, 2012

FBM KLCI - closing at all-time high

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