FBM KLCI - flat in mixed market

Stocks on Bursa Malaysia closed mixed yesterday on mild profit-taking ahead of the long Chinese New Year weekend. However, losses were limited amid investor interest in smaller cap stocks. The market was supported by improved risk appetite after the International Monetary Fund said it was planning a large expansion in its lending pool to safeguard the global economy against the worsening Euro-zone debt crisis. The FBM KLCI ended 0.57 point lower at 1,516.81 after opening 1.58 point lower at 1,515.80. Gainers led losers by 378 to 370 while 325 were unchanged. Turnover increased to 1.936 billion shares valued at RM1.618 billion as compared with Wednesday’s 1.490 billion shares worth RM1.599 billion.

The FBM KLCI opened 1.58 point lower at 1,515.80 but surged to the intra-day high of 1,522.32 in the first fifteen minutes of trade. However, profit-taking activity which surfaced pressed the key index southward for the rest of the day to hit the intra-day low of 1,514.04 before rebounding to close almost unchanged. Chart wise, the FBM KLCI formed a white inverted hammer candlestick which indicates the bulls were initially trying to take control but the bears later came out to press the index back to where it started. Hence, the FBM KLCI is likely to extend its range-bound consolidation but with an upward bias.

MACD continued to slide lower, indicating a continued loss in the index’s momentum. However, as MACD is still above the zero-line, the current weakness is view as a short term consolidation. RSI (14) was marginally lower at 57.5, reflecting the mild loss in the index and showed that the key index is still in the mildly bullish zone. Stochastic, however, has hooked upward to 60.3, showing sign that a possible rebound may take place. Readings from the indicators showed that the FBM KLCI is currently undergoing a short term consolidation process.

The immediate short term trend of the FBM KLCI has turned into sideways range-bound as it is capped on top by the 5 and 10-day SMA but was supported below by the 20 and 30-day SMA, but the longer term trend still remained up. Immediate overhead resistance zone is at 1,522 to 1,530 while the downside support zone is at 1,509 to 1,501. A breakout is either one direction will see the FBM KLCI continue moving in that direction.
As Bursa Malaysia is close for the Chinese New Year holiday on next Monday and Tuesday, the overall market is likely to remain as it is, and we like to take this opportunity to wish all our readers “Gong Xi Fa Cai” and may the year of the Dragon brings you and your family good health, happiness and prosperity.

Overnight, the Dow rose +46.24 points or +0.37% to close at 12,625.19. Today, the FBM KLCI is likely to trade within a range of 1,504 to 1,531.

This week's expected range: 1502 – 1540
Today’s expected range: 1504 – 1531

Resistance: 1521, 1526, 1531
Support: 1504, 1509, 1513

Stocks to watch: UNISEM, MPI, DKSH

FBM KLCI - uptrend continued

Stocks on Bursa Malaysia ended broadly higher yesterday and persistent buying in selected heavyweights pushed the FBM KLCI to end at its intra-day high of 1,521.73 with a gain of 7.6 points or 0.5%. Gainers thumped losers by 491 to 264, while 301 counters were unchanged. Total turnover rose to 1.64 billion shares worth RM1.71 billion from Friday's closing of 1.47 billion shares worth RM1.39 billion.

The FBM KLCI opened 0.93 point higher at 1,515.06 but pulled back to touch the intra-day low of 1,513.35. It then rebounded to the positive territory and stayed sideways for a major part of the day, and a last minute buying in selected heavyweights pushed the key index to close at the high of the day. Chart wise, the FBM KLCI formed a bullish white candlestick which indicates a confirmed reversal of the key index after four days of consolidation. It is likely to continue climbing higher today with immediate overhead resistance zone at 1,525 to 1,530.

MACD continued to climb higher but its histogram was shorter, indicating a lack of strength and momentum of the key index. RSI (14) was higher at 63.4, indicating the relative strength of the key index is still in the bullish zone. Stochastic was higher at 80.7, and has crossed above the slow stochastic line, indicating that the short term down cycle or correction is probably over and the resumption of the up cycle. Readings from the indicators showed that the short term correction of the FBM KLCI is probably over, and the key index may resume its upward momentum.

With the up move yesterday, the FBM KLCI has resumed its overall uptrend, and is ready to move higher to re-challenge the immediate resistance level of 1,530. The resistance zone formed by the gap at 1,530 to 1,539 may post as a strong barrier to the up move, while the immediate downside support zone is at 1,513 to 1,508. With the volume remained at the current level or higher, the market is poised for a pre-Chinese New Year rally with active rotational play on the second and third liners.

Overnight, the Dow rose +32.77 points or +0.27% to close at 12,392.69. Today, the FBM KLCI is likely to trade within a range of 1,507 to 1,531.

This week's expected range: 1479 – 1549
Today’s expected range: 1507 – 1531

Resistance: 1525, 1528, 1531
Support: 1507, 1510, 1516

Stocks to watch: REDTONE, MUHIBAH, DKSH, BIOOSMO, UNISEM

FBM KLCI - likely to extend consolidation

Stocks on Bursa Malaysia ended the first trading week of 2012 weaker, in line with its regional peers as sentiment continued to be influenced by the uncertainty looming over the Euro-zone debt problem. The FBM KLCI ended last Friday 0.30 point lower at 1,514.13, after fluctuating between 1,508.93 and 1,515.27 throughout the day, and week-on-week, the key index fell 16.6 from previous Friday's close of 1,530.73. Losers outnumbered gainers by 391 to 377 while 299 counters were unchanged. Volume decreased to 1.466 billion shares, worth RM1.389 billion, from 1.668 billion shares, worth RM1.462 billion, on Thursday. Total weekly volume increased to 6.399 billion shares worth RM5.785 billion from last week’s 6.21 billion shares worth RM6.74 billion.

The FBM KLCI was basically in consolidation mode throughout the whole of last week which saw the key index opened 7.13 points lower at 1,523.60 on the first trading day of the year and closed lower on heavy profit-taking to end Tuesday at 1,513.54. The key index continued to slide lower to hit the intra-week low of 1,502.09 before rebounding slightly to close Wednesday at 1,504.22, losing another 9.32 points. On Thursday, the FBM KLCI staged a rebound and recovered some lost ground to close 10.21 points higher at 1,514.43, and on Friday, the key index traded in a range-bound manner to end the day 0.3 of a point lower at 1,514.13.

On the weekly chart, the FBM KLCI formed a bearish black hammer-like candlestick in Harami position, a top reversal candlestick pattern, which indicates profit-taking activity after a strong up move the previous week. With the appearance of this bearish Harami candle pattern, the FBM KLCI is likely to continue to consolidate this week. Nevertheless, the key index is still closing above all the moving averages on the weekly chart which indicates that it is still bullish, after down move last week may just be a pullback correction after two weeks of strong up move. Immediate overhead resistance zone is at 1,525 to 1,530, while the downside support zone is at 1,502 to 1,490.

On the daily chart, the FBM KLCI formed a white hammer-like candlestick in Harami position which indicates consolidation. The key index is now closing below the 5-day SMA but remained above the 10-day SMA, which further strengthen the perception of consolidation. Immediate overhead resistance zone is at 1,515 to 1,530 while the downside support zone is at 1,508 to 1,500, and the cluster of long term moving averages may provide some cushion to any down move.

Weekly MACD continued to climb higher, and has just made a golden-cross, sending out a bullish buy signal for the medium term. Daily MACD was also higher, but the daily histogram was getting shorter indicating a slow down in the upward momentum and the key index is moving into a consolidation mode. Weekly RSI (14) was lower at 55.4, reflecting the pullback correction, and nonetheless, it is still in the mildly bullish zone. Daily RSI (14) was marginally lower at 61, indicating the daily relative strength of the key index is still in the bullish zone. Weekly Stochastic continued to climb higher to 96.1, indicating very strong market strength and continuation of the weekly up cycle. Daily stochastic continued to slide lower to 74.4, indicating a continued loss in the daily momentum. Readings from the weekly and daily indicators showed that the FBM KLCI is bullish from the weekly perspective, while from the daily side, it is currently undergoing a consolidation phase, and the key index should resume it upward momentum once the correction is over.

The longer term trend of the FBM KLCI remained bullish and up, while for the immediate short term, it is in correction mode. With the longer term trend still up, the FBM KLCI is likely to resume its short term uptrend once the current correction phase is over. While the index link heavyweights may continue to consolidate, the overall market is likely to be dominated by active trading in second and third liners stock on rotational play. Last Friday, the Dow fell -55.78 points or -0.45% to close at 12,359.92. This week, the FBM KLCI is likely to trade within a range of 1,479 to 1,549, and for today, it is likely to trade within a range of 1,503 to 1,522.

This week's expected range: 1479 – 1549
Today’s expected range: 1503 – 1522

Resistance: 1517, 1520, 1522
Support: 1503, 1506, 1510

Stocks to watch: UNISEM, PUNCAK, KPS, DKSH