Millionaire Trend Trader: FBM KLCI - likely to trend higher

Monday, July 16, 2012

FBM KLCI - likely to trend higher

Stocks on Bursa Malaysia ended slightly higher last Friday after see-saw trading throughout the day, lifted by gains in selected key heavyweight counters. Regional market sentiment improved after China’s second-quarter growth report met market expectations. Back home, the market showed some continued sell-off in plantations counters, and the benchmark FBM KLCI gained 0.89 of a point to end at 1,626.38, after hovering between the 1,621.37 and 1,628.09 levels, Week-on-week, it gained 5.83 points from 1,620.55 the previous week, and it touched a new high at 1,629.45 on Wednesday. Gainers led losers by 379 to 367 while 330 counters were unchanged. Turnover advanced to 1.290 billion shares worth RM1.616 billion from 1.279 billion shares worth RM1.681 billion on Thursday. Weekly volume increased to 6.309 billion shares worth RM8.618 billion from 5.671 billion shares worth RM7.734 billion the previous week.

Last week was a recording making week for the FBM KLCI which saw the benchmark index continuously chart new high. The FBM KLCI opened 1.2 points lower last Monday at 1,619.35 and slipped to the intra-week low of 1,616.24 before rebounding to close 0.24 of a point lower at 1,620.31. Tuesday saw the FBM KLCI rose 3.98 points to close at a new high of 1,624.29 prompted by gains in plantation counters. Buoyed by persistent buying interests in selected blue-chips, the benchmark FBM KLCI rose 5.16 points on Wednesday to a new record close of 1,629.45 after touching an intra-day high of 1,632.15. On Thursday, The FBM KLCI opened 0.63 point lower at 1,628.82 and slipped lower, but it rebounded fairly quickly to hit another new record intra-day high of 1,632.94 before heavy profit-taking activity sent it to close 3.96 points lower at 1,625.49, and Friday saw the benchmark index rebounding marginally to close 0.89 point higher after hitting an intra-day low of 1,621.37.

On the weekly chart, the FBM KLCI formed a bullish white spinning-top candlestick with a slightly longer upper shadow which indicates the upward momentum of benchmark index has reduced comparing with previous week’s bullish white Marubozu candlestick, and slight uncertainties due to profit-taking has surfaced as the index charts record high. Anyway, the FBM KLCI is still in a bullish uptrend. On the daily chart, the FBM KLCI rebounded to form a bullish white piercing-line candlestick after opening lower and hitting the intra-day low of 1,621.37, indicating the bulls were trying to fight back after being beaten on Thursday, and the key index is likely to continue its rebound to climb higher today.

Weekly MACD continued to climb higher after making a golden-cross last week, indicating a continued improvement in the weekly momentum. Daily MACD, however, has turned flat and its histogram has turned shorter, indicating a reduction in the daily upward momentum. Weekly RSI (14) was higher at 64.1 from 63.1 reflecting the continued gain and the weekly relative strength is still in the bullish state. Daily RSI (14) has hooked up marginally to 68.6, reflecting a mild rebound and the daily relative strength of the FBM KLCI is still in the bullish state. Weekly Stochastic was marginally higher at 93.4 but has tapered off, indicating a slow down in the upward strength. Daily stochastic, however, continued to slide lower 86.3, indicating the short term profit-taking correction is not over yet. Readings from the weekly indicators showed that the FBM KLCI is still in a bullish state while the daily indicators showed that the key index is undergoing a short term pullback correction but overall is still bullish.

The FBM KLCI has corrected itself on last Thursday after hitting a new record intra-day high level of 1,632.94, but Friday’s price action showed that the key index is likely to stage a rebound to re-test the recent high. Immediate overhead resistance zone is at 1,629 to 1,633, if the key index is able to break through the 1,632.94-point level convincingly, then it might rally to the next target level of 1,641 follow by 1,650. Technically, the FBM KLCI has an upside target of 1,660 to 1,700 from a longer term perspective.

Last Friday, the Dow rose +203.82 points or +1.62% to close at 12,777.09. This week, the FBM KLCI is likely to trade within a range of 1,600 to 1,650, and for today, it is likely to trade within a range of 1,615 to 1,635.

This week's expected range: 1600 – 1650
Today’s expected range: 1615 – 1635

Resistance: 1629, 1632, 1635
Support: 1615, 1618, 1622

Stocks to watch: OLDTOWN, SCOPE, SUPERMX, WEIDA, PRLEXUS

No comments:

Post a Comment

What's happening now is that the market remains trading at very thin volumes and that can affect prices, even when just a handful of shares are traded. The decision of any fund to pull out from certain stock hits the price. - Carlos Slim

You get recessions, you have stock market declines. If you don't understand that's going to happen, then you're not ready, you won't do well in the markets. - Peter Lynch

Vision is perhaps our greatest strength.. it has kept us alive to the power and continuity of thought through the centuries, it makes us peer into the future and lends shape to the unknown.
- Li Ka Shing

Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised. - Warren Buffet

Learning is a never ending journey in the stock market. The very moment you think you have learned enough, you'll fall. - Harrison Ho

When people are frightened, they cut their time horizon dramatically, even advisors will say to sell because they see portfolios crumble and they fear people will have nothing left. It's really not rational, but it does happen. - David Dreman

I've found that when the market's going down and you buy funds wisely, at some point in the future you will be happy. You won't get there by reading 'Now is the time to buy.' - Peter Lynch

A military operation involves deception. Even though you are competent, appear to be incompetent. Though effective, appear to be ineffective. - Sun-tzu

Financial markets are supposed to swing like a pendulum: They may fluctuate wildly in response to exogenous shocks, but eventually they are supposed to come to rest at an equilibrium point. - George Soros

If you don't change, reality in the end forces that change upon you. - Stuart Wilde

The investor of today does not profit from yesterday's growth. - Warren Buffet

Analysts have always been overly optimistic.
- David Dreman

We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don't let yourself be lulled into inaction. - Bill Gates

A corporation's primary goal is to make money. Government's primary role is to take a big chunk of that money and give it to others. - Larry Ellison

If you believe that some day it's going to happen, some day it probably will happen. You just have to make sure you're there when it's happening, and ideally you're at the front of the parade, and the principle beneficiary of when it happens, but it's not a kind of thing where you just sort of sit back and wait. - Steve Case

I try to learn from the past, but I plan for the future by focusing exclusively on the present. That's where the fun is. - Donald Trump

The more flexible an economy, the greater its ability to self-correct in response to inevitable, often unanticipated, disturbances and thus to contain the size and consequences of cyclical imbalances. - Alan Greenspan

The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow. - Rupert Murdoch

The price pattern reminds you that every movement of importance is but a repetition of similar price movements, that just as soon as you can familiarize yourself with the actions of the past, you will be able to anticipate and act correctly and profitably upon forthcoming movements. - Jesse Livermore

In the business world, the rearview mirror is always clearer than the windshield. - Warren Buffett

Be extremely subtle, even to the point of formlessness. Be extremely mysterious, even to the point of soundlessness. Thereby you can be the director of the opponent's fate. - Sun-tzu

Look at market fluctuations as your friend rather than your enemy.. profit from folly rather than participate in it. - Warren Buffett

I hate weekends because there is no stock market. - Rene Rivkin

Before this century is over, the Dow Jones Industrial Average will probably be over one million versus around 10,000 now. So for the long-term, the outlook is tremendously bullish if you buy stocks blindly to keep for a century. - John Templeton

A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well. - Jeff Bezos

Making good decisions is a crucial skill at every level. - Peter Drucker

We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful. - Warren Buffett

The individual investor should act consistently as an investor and not as a speculator. This means.. that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase. - Benjamin Graham

In this business if you're good, you're right six times out of ten. You're never going to be right nine times out of ten. - Peter Lynch

The financial markets generally are unpredictable. So that one has to have different scenarios.. The idea that you can actually predict what's going to happen contradicts my way of looking at the market. - George Soros

Our favourite holding period is forever. - Warren Buffet

If you buy all the stocks selling at or below two times earnings, you will lose money on half of them because instead of making profits they will actually lose money, but you will only lose a dollar or so a share at most. Then others will be mediocre performers. But the remaining big winners will go up and produce fabulous results and also ensure a good overall result. - John Templeton

When I'm bearish and I sell a stock, each sale must be at a lower level than the previous sale. When I am buying, the reverse is true. I must buy on a rising scale. I don't buy long stocks on a scale down, I buy on a scale up. - Jesse Livermore

I've learned that mistakes can often be as good a teacher as success. - Jack Welch

Well, you know, I was a human being before I became a businessman. - George Soros

Checking the results of a decision against its expectations shows executives what their strengths are, where they need to improve, and where they lack knowledge or information. - Peter Drucker

The market does not beat them. They beat themselves, because though they have brains they cannot sit tight. - Jesse Livermore

Wide diversification is only required when investors do not understand what they are doing. - Warren Buffett

Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception. - George Soros

Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed. - Benjamin Graham

The price pattern reminds you that every movement of importance is but a repetition of similar price movements, that just as soon as you can familiarize yourself with the actions of the past, you will be able to anticipate and act correctly and profitably upon forthcoming movements. - Jesse Livermore

I think you have to learn that there's a company behind every stock, and that there's only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies. - Peter Lynch

Before you can really start setting financial goals, you need to determine where you stand financially. - David Bach

The average man doesnâ€™t wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesnâ€™t even wish to have to think. - Jesse Livermore

Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years. - Warren Buffett

Suppliers and especially manufacturers have market power because they have information about a product or a service that the customer does not and cannot have, and does not need if he can trust the brand. This explains the profitability of brands. - Peter Drucker

The key to making money in stocks is not to get scared out of them. - Peter Lynch

I never hesitate to tell a man that I am bullish or bearish. But I do not tell people to buy or sell any particular stock. In a bear market all stocks go down and in a bull market they go up. - Jesse Livermore

Millionaire Trend Trader

"T+10 interest FREE margin trading account"

Monday, July 16, 2012

FBM KLCI - likely to trend higher

No comments:

:: Disclaimer ::