Millionaire Trend Trader: FBM KLCI - closing at new record high

Thursday, July 5, 2012

FBM KLCI - closing at new record high

Stocks on Bursa Malaysia closed higher yesterday in tandem with the rally in regional bourses, driven by expectation that policymakers will implement monetary measures to boost the weakening global economy. The benchmark FBM KLCI climbed to an all-time intra-day high of 1,614.79 before settling at 1,613.75, up 6.01 points or 0.37%, after opening 1.70 points higher at 1,609.44. Gainers led losers by 408 to 353 while 331 counters were unchanged. Turnover decreased to 1.082 billion shares worth RM1.696 billion from Tuesday’s 1.253 billion shares worth RM1.843 billion.

The FBM KLCI opened 1.70 points higher at 1,609.44, the intra-day low, and rallied to the new record intra-day high of 1,614.79 within the first thirty minutes of trading. Thereafter, the key index slid lower to a low of 1,610.80 on profit-taking activity before rebounding in the late afternoon to close at a new record high. Chart-wise, the FBM KLCI formed a bullish white candlestick which gaps away from the previous candlestick, indicating an increased in buying interest of the blue-chips stocks, and the key index is likely to continue scaling new high until sign of exhaustion appear.

MACD and its histogram were higher, indicating an increased in the upward momentum. RSI (14) was higher at 65.6, indicating the key index is turning more bullish, and Stochastic was also higher at 87.3, indicating an improvement in the market strength and continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI is currently in a bullish state, and the bullishness may carry the key index higher.

The trend of the FBM KLCI is up and bullish as the benchmark index is currently staying above all the short, medium and long term moving averages. After making a new record high, the key index is likely to face more profit-taking activity which will cause a pullback correction. Immediate downside support zone is at 1,611 to 1,609 while the immediate overhead resistance is at 1,615. If the key index is able to breakthrough the resistance at 1,615, the next higher target is looking at 1,621.

US market was closed yesterday for their Independence Day holiday, and over in Europe, the DAX was down -13.41 points or -0.20% to close at 6,564.80. Today, the FBM KLCI is likely to trade within a range of 1,605 to 1,621.

This week's expected range: 1570 – 1631
Today’s expected range: 1605 – 1621

Resistance: 1615, 1618, 1621
Support: 1605, 1607, 1610

Stocks to watch: SHCHAN, THPLANT, PERDANA, PRESBHD, ULICORP, CENSOF

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Thursday, July 5, 2012

FBM KLCI - closing at new record high

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