FBM KLCI - mild rebound

Stocks on Bursa Malaysia ended mixed yesterday with a mild rebound on the benchmark index, supported by buying on selected finance- and plantation-related stocks. Market sentiment was underpinned by the rally in the regional bourses. The FBM KLCI rose by 2.14 points or 0.15 per cent to end at 1461.78, after opening 4.68 points higher at 1464.32. Gainers outnumbered losers by 430 to 283 while 306 counters were unchanged. Volume fell to 905 million shares worth RM1.449 billion from 976 million shares worth RM1.351 billion on Tuesday.

The FBM KLCI opened 4.68 points higher at 1464.32 and surged to the intra-day high of 1466.29 in the first fifteen minutes before profit-taking activities sent it down to the intra-day low of 1459.12. The key index was in consolidation mode for most part of the day before last minute buying of selected heavyweights which lifted it off low to close 2.14 points higher at 1461.78. Chart-wise, the benchmark index formed a small body black candlestick which indicates low volatility and consolidation. The key index is currently supported below by the 5-day moving average (MA) at 1459 while it is bound on top by the 10-day MA at 1466. A breakout in either way will see the key index moving in that direction.

MACD continued to slide lower as shown by the increasing length of the histogram, indicating a continued loss in upward momentum and a correction mode of the key index. RSI (14) at 63.5 has hooked up slightly reflecting a sideways situation; it is however, still in the mildly bullish zone. Stochastic at 65.5 has turned upward and just crossed above its slow stochastic reflecting a technical rebound of the key index. Signals from the indicators are reflecting the consolidation mode of the FBM KLCI.

For the immediate near term, the FBM KLCI has fall into a sideways consolidation mode, nonetheless, the underlying medium to long term trend still remained up. Immediate support zone for the key index lies at 1440 to 1450 while the overhead resistance zone remained at 1470 to 1480.

Overnight, the Dow fell -22.86 points or -0.21% lower to close at 10,835.28. Today, the FBM KLCI is likely to trade within a range of 1451 to 1473.

This week's expected range: 1403 – 1514
Today’s expected range: 1451 – 1473

Resistance: 1466, 1469, 1473
Support: 1451, 1455, 1458

FBM KLCI - correction

Stocks on Bursa Malaysia ended lower yesterday as the heavyweights correct after the strong rebound on Monday, in line with the weaker performance of the regional markets. The benchmark FBM KLCI fell 5.07 points or 0.35% to close at 1459.64 after opening 1.30 points lower at 1463.41. Losers outnumbered gainers by 493 to 244 while 289 counters were unchanged. Volume fell to 976 million shares worth RM1.351 billion from 1.158 billion worth RM1.623 billion on Monday.

The FBM KLCI opened 1.30 points lower at 1463.41 following the weak performance of the Dow overnight. It rebounded to touched the intra-day high of 1465.47, but succumbed to the heavy profit-taking activities which sent the key index to the intra-day low of 1457.80 before rebounding to close off low at 1459.64. Chart-wise, the FBM KLCI formed a bearish Harami candlestick, which is a reversal signal. Hence, the key index is likely to continue its consolidation with a downward bias.

MACD continued to slide lower, indicating a pick up in the downward momentum. RSI(14) at 62.7 has hooked down, nonetheless, is still in the mildly bullish zone. Stochastic at 58.6 has turned up slightly, but is still below its slow Stochastic, reflecting the rebound, however, the down cycle has not been reversed yet. Signals from the indicators are indicating a state of consolidation of the FBM KLCI with a downward bias.

The FBM KLCI is now below the immediate term 5 and 10-day MA, hence, is expected to continue moving lower, unless it can close above 1467, only then the downtrend can be reversed. For the near term, the FBM KLCI is expected to be sideways or range-bound with a downward bias, with immediate support at 1440 to 1450 while the overhead resistance zone remained at 1470 to 1480. The medium to longer term uptrend remained intact. The FBM KLCI might continue to track the performance of regional key indexes on the lack of fresh leads back home.

Overnight, the Dow rose +46.10 points or +0.43% higher to close at 10,858.14. Today, the FBM KLCI is likely to trade within a range of 1448 to 1473.

This week's expected range: 1403 – 1514
Today’s expected range: 1448 – 1473

Resistance: 1464, 1469, 1473
Support: 1448, 1453, 1456

FBM KLCI - technical rebound

Stocks on Bursa Malaysia rebounded to end firmer yesterday in tandem with the rise in regional markets, as strong gains on Wall Street last Friday helped spur buying on the local bourse. The benchmark FBM KLCI closed 13.52 points or 0.93% higher at 1464.71 led by gains in CIMB, MAYBANK, and IOICORP. Gainers led losers by 469 to 292 while 276 counters were unchanged. Turnover stood at 1.158 billion shares, worth RM1.623 billion, up from last Friday's 1.727 billion shares worth RM1.531 billion.

Taking cue from the hefty rise of the DJIA last Friday, the FBM KLCI opened with an up gap of 7.54 points at 1458.73. Mild profit-taking sent the index to its intra-day low of 1456.30 but strong buying support pushed the key index to its intra-day high of 1467.18 before easing to close at 1464.71. Chart-wise, the FBM KLCI formed a bullish white candlestick which confirmed the reversal signal of the Doji star pattern that formed last Friday.

The FBM KLCI actually retreated when it hit the resistance zone at 1463 to 1465 posted by the 5 and 10-day moving averages (MA) as was mentioned in yesterday’s analysis, and the key index is closing right below these two short term MAs. If the key index is able to close above 1467 today, then there is a high likelihood that it will move higher to re-test the resistance zone at 1470 to 1480.

MACD continued to slide lower after making the “dead-cross” last Thursday, indicating the correction is not over yet, and the rebound yesterday could be short-lived. RSI(14) at 66 has hooked up in tandem with the rebound, is still in the bullish zone. Stochastic at 57.6 continued to slide lower indicating the down cycle is not over yet. Signals from the indicators are indicating the current correction is not over yet, and the key index is likely to remain in a range-bound situation.

The 5-day MA has just crossed below the 10-day MA, indicating the short term trend is beginning to turn southward, unless the key index is able to close above 1467, only then the downtrend might reversed up. The medium to longer term underlying uptrend remained intact for the moment. The FBM KLCI is expected to remain in a range-bound situation with the overhead resistance zone at 1470 to 1480 while its immediate support zone lies at 1440 to 1450. The overall market is expected to remain active with rotational play on lower liners while heavyweight counters consolidate.

Overnight, the Dow fell -48.22 points or -0.44% lower to close at 10,812.04. Today, the FBM KLCI is likely to trade within a range of 1447 to 1478.

This week's expected range: 1403 – 1514
Today’s expected range: 1447 – 1478

Resistance: 1469, 1474, 1478
Support: 1447, 1451, 1458

FBM KLCI - likely to be range-bound consolidation

Stocks on Bursa Malaysia closed mixed last Friday on continued profit-taking and losses among heavyweights. The benchmark FBM KLCI reached a new two-and-a-half year high on Tuesday, buoyed by strong performance in regional markets and following the announcement of the government's ETP. However, profit-taking emerged for the following three consecutive days, with heavyweight stocks recording heavy losses. The benchmark FBM KLCI lost 15.78 points or 1.08% to 1,451.19, week-on-week, from 1,466.97 the previous week. Weekly turnover rose to 5.958 billion shares worth RM7.865 billion from 3.575 billion shares worth RM7.460 billion the previous week.

The FBM KLCI opened 3.76 points higher at 1470.73 on last Monday and went into a correction mode for most part of the day before rebounding to close off low at 1469.69. On Tuesday, the key index continued its rebound from Monday to close 6.3 points higher at 1475.99, charting a new two-and-a-half-year high on the back of the announcement of the government’s Economic Transformation Programme. The FBM KLCI paused to consolidate within a tight trading range on Wednesday to close 1.24 points lower at 1474.75 after hitting an intra-day high of 1479.44. The benchmark index suffered heavy loss of 16.67 points to 1458.08 on Thursday as the market sentiments weakened, marking the first deep correction in 2 two months. On Friday, the key index continued its down move to hit the intra-week low of 1445.33 before rebounding to close 6.89 points lower at 1451.19.

On the weekly chart, the price action of the FBM KLCI formed a dark-cloud-cover candlestick pattern which indicates profit-taking and correction. It, however, is still staying above the 5-week moving average (MA) which is now at 1440, indicating the underlying short term trend remained up. If the key index closes below the 1440 level, then it will move lower to test the support at 1428.

On the daily chart, the FBM KLCI formed a Doji candlestick with long lower shadow in a possible star position, and the fact that the key index is able to rebound to close above the 1450 psychological level, there’s a high chance that it may continue to move upward. However, it may meet strong resistance posted by the 5 and 10-day MA at 1463 to 1465 area.

Weekly MACD continued to climb higher but at a slower pace, as shown by the shorter histogram, indicating a slow down in the medium term upward momentum. Daily MACD, however, continued to fall lower after making the “dead-cross” on last Thursday, indicating a pick up in the short term downward momentum.

Weekly RSI(14) at 73.7 has fell from the high of 79.6 registered on the previous week, reflecting the current correction. It is, nonetheless, still bullish in the medium term perspective. Daily RSI(14) at 60.8 continued to slide lower from the recent high reading of 86 registered on September 14, reflecting the rapid correction and is now at the edge of the mildly bullish zone.

Weekly Stochastic at 91.5 continued to slide lower and is below its weekly slow Stochastic, reflecting the continuous loss in weekly momentum. Daily Stochastic at 65 continued to slide lower, indicating the continuation of the short term down cycle.

Signals from the indicators are indicating that the medium term upward momentum of the FBM KLCI is slowing down; whereas for the short term, the key index is undergoing a correction which has just begun and might continue in the coming week.

The FBM KLCI is now staying below the short term 5 and 10-day MA, which indicates short term downtrend. The medium to longer term uptrend is, however, still very much intact. An important moving average to watch is the 30-day MA which is currently at 1422. The key index has been able to stay above this MA in the last three months when it corrects, if the key index could not hold above the 30-day MA in the current correction, it might move further downward to the 1400 level.

For this week, the FBM KLCI is likely to be range-bound or consolidate as investors might adopt a wait-and-see attitude amid prevailing concerns about weaknesses in the US and European economies. Immediate support level is at 1428 to 1441 while the overhead resistance zone is at 1463 to 1480.

The Dow rose +197.84 points or +1.86% higher to close at 10,860.26 on last Friday. This week, the FBM KLCI may trade within a range of 1403 to 1514, and for today it is likely to trade within a range of 1437 to 1463.

This week's expected range: 1403 – 1514
Today’s expected range: 1437 – 1463

Resistance: 1455, 1459, 1463
Support: 1437, 1441, 1446

FBM KLCI - correction finally sets in

Stocks on Bursa Malaysia ended broadly lower yesterday, dragged by losses in key heavyweights. A correction sets in after the benchmark index touched a two-and-a-half-year high on Tuesday with investors tracking losses on Wall Street amid pessimistic assessment by the US Federal Reserve's Federal Open Market Committee on Tuesday that the US economic recovery had slowed. The benchmark FBM KLCI lost 16.67 points or 1.13% to 1458.08. Losers beat gainers by 523 to 221 while 254 counters were unchanged. Turnover was lower at 999 million shares worth RM1.416 billion from 1.332 billion shares worth RM2.021 billion on Wednesday.
The FBM KLCI opened 0.95 point higher at 1475.7 and traded to the intra-day high of 1477.03 before selling pressure sent it to the intra-day low of 1456.64, the key index rebounded weakly to close at 1458.08 on late buying of selected blue-chip stocks. Chart-wise, the benchmark index formed a bearish black candlestick which confirms the top reversal signal of the dark-cloud-cover pattern formed on Wednesday. The key index is expected to correct further downward. As the index has penetrated the support level at 1460 by the 10-day moving average (MA), the immediate support level to watch is the psychological support at 1450 and the pivot high which turned support at 1441.

MACD has turned southward and has just made a “dead-cross” over its trigger line, indicating that a serious correction has started. RSI(14) plunged steeply from 81 to 65.7, indicating a deep correction. Stochastic at 82.6 continued to slide lower, indicating a down cycle had started. Signals from the indicators are indicating a correction of the FBM KLCI which is long overdue had started, and the key index may continue to move lower to test the lower support levels.

As mentioned in yesterday’s analysis that if the benchmark index breaks below 1470, it might slide lower to the 1460 level, it did. For the immediate short term, the FBM KLCI is expected to correct further downward, nonetheless, the underlying medium and long term trend is still up and may give buffer to the short term correction. Immediate key support for the index lies at 1450, 1441, 1428. Overhead resistance zone is at 1465 to 1480.

Overnight, the Dow fell -76.89 points or -0.72% lower to close at 10,662.42. Today, the FBM KLCI is likely to trade within a range of 1430 to 1480.

This week's expected range: 1403 – 1520
Today’s expected range: 1430 – 1480

Resistance: 1465, 1471, 1480
Support: 1430, 1443, 1450

FBM KLCI - lower on profit taking

Stocks on Bursa Malaysia ended mixed yesterday as the market succumbed to selling pressure after recent gains. The government's Economic Transformation Programme (ETP) unveiled on Tuesday did not have an immediate impact on the market as investors awaited specific details on its long-term implementation. The FBM KLCI fell 1.24 points or 0.08% to close at 1474.75 after opening 1.85 points higher. Gainers led losers by 398 to 363 while 280 counters were unchanged. Turnover increased to 1.332 billion shares worth RM2.021 billion from 1.049 billion shares worth RM1.513 billion on Tuesday.

The FBM KLCI opened with 1.85 points up gap at 1477.84 and surged to the intra-day high of 1479.44 within the first fifteen minutes. Profit-taking activities sent the key index lower. The index was moving in and out of the positive territory within a 4.71 points range, and eventually settled near the low of the day at 1474.75. Chart-wise, the key index formed a bearish black spinning-top candlestick and dark-cloud-cover pattern, which is a top reversal pattern. In fact, the key index has been congesting between the recent high of 1479.59 and the low of 1465.03 over the last five days, a sign that the key index has loss the upward momentum and may turn southward anytime.

MACD has just started to turn downward, but is still above the trigger line, while the histogram is turning shorter, indicating a loss in upward momentum. RSI(14) at 81.2 has hooked downward, nonetheless, is still in the overbought zone. Stochastic at 90.7 has hooked up, but is still below the slow stochastic line. Signals from the indicators are indicating that the benchmark index is gradually losing its upward momentum, and may continue to slide lower.

The underlying longer term uptrend remained intact. The near term 5-day moving average (MA) s at 1472 and has turned flat, while the 10-day MA is now at 1460. If the index breaks below 1470 level, it might slide lower to the immediate support at 1465 and 1460. Overhead resistance zone remained at 1480 to 1500.

Overnight, the Dow fell -21.72 points or -0.20% lower to close at 10,739.31. Today, the FBM KLCI is likely to trade within a range of 1466 to 1485.

This week's expected range: 1403 – 1520
Today’s expected range: 1466 – 1485

Resistance: 1478, 1481, 1485
Support: 1466, 1471, 1473

FBM KLCI - closed at new two-and-a-half-year high!

Stocks on Bursa Malaysia ended higher yesterday, buoyed by strong buying interest in selected blue-chips, pushed the benchmark FBM KLCI to close at a new two-and-a-half-year high at 1475.99, gaining 6.3 points or 0.43%. The unveiling of the government's Economic Transformation Programme (ETP) yesterday, aimed at boosting Malaysia's economy at 6% every year between 2011 and 2020, boosted market sentiment. Gainers led losers by 368 to 345 while 319 counters were unchanged. Turnover was higher at 1.049 billion shares, worth RM1.513 billion, from 850 million shares, worth RM1.381 billion on Monday.

The FBM KLCI opened 1.46 points higher at 1471.15 and surged to the intra-day high of 1479.59 within the first half-an-hour, the same resistance level registered on last Friday, and heavy profit-taking activities sent the key index down to the intra-day low of 1471.03. Buying interest on selected blue-chips which surfaced in late afternoon helped lift the key index to close 6.3 points higher at 1475.99. Chart-wise, the price action of the key index formed a bullish white candlestick which confirmed the reversal signal generated by the Hammer-like candlestick formed on Monday. The index is likely to continue moving higher; nonetheless, the level at 1479.59 is a major resistance to cross before it can chart new high.

MACD continued to move higher, but at a slower pace, as shown by the shorter histogram, which indicates a reduction in the upward momentum. RSI(14) at 81.4 is climbing marginally higher, indicating a very bullish undertone of the benchmark index, albeit in the overbought zone. Stochastic at 88.45, however, continued to slide lower, indicating a gradual loss in market strength. Signals from the indicators are indicating a bullish undertone of the FBM KLCI, with a gradual loss in upward momentum, and a correction is imminent.

The underlying trend of the FBM KLCI remained very bullish as indicated by the index staying above all the short, medium and long term moving averages that are all pointing northeast. Immediate support zone now lies at 1450 to 1465, while the overhead resistance zone remained at 1480 to 1500. As the market undertone is still very bullish, any correction should be viewed as an opportunity to accumulate quality stocks at lower price level. The market is likely to be in rotational play for the next three weeks until the budget 2011 announcement on October 15.

Overnight, the Dow rose +7.41 points or +0.07% higher to close at 10,761.03. Today, the FBM KLCI is likely to trade within a range of 1463 to 1488.

This week's expected range: 1403 – 1520
Today’s expected range: 1463 – 1488

Resistance: 1480, 1484, 1488
Support: 1463, 1467, 1471

Stock to Watch: KENCANA, SAPRES, TGUAN, XINQUAN