FBM KLCI - in consolidation

Stocks on Bursa Malaysia closed mixed yesterday as last-minute selling in selected heavyweights limited gains. Market sentiment firmed up for the first time in recent days with interest seen in smaller capitalised stocks but CIMB came under some selling pressure and dragged the benchmark FBM KLCI into the negative territory. At close, the FBM KLCI slipped 2.04 points or 0.12% to 1,741.37 after hovering between 1,736.57 and 1,746.49 throughout the day. Gainers outpaced losers by 571 to 262 while 280 counters were unchanged. Total volume rose to 1.73 billion units worth RM2.15 billion, from 1.61 billion units worth RM1.81 billion recorded on Monday. Read more >>

FBM KLCI - likely to further consolidate

Stocks on Bursa Malaysia ended broadly lower for the second consecutive day on last Friday, dragged down by oil and gas-related heavyweights. The weak performance of the local bourse was influenced by the Organization of Petroleum Exporting Countries (OPEC) meeting on Thursday, which decided not to cut production, and hence, causing further plunge in Brent crude to hover near a four-year low. The FBMKLCI lost 9.02 points or 0.49% to close at 1,820.89 after moving between 1,815.31 and 1,827.16 throughout the day. Week-on-week, the key index gained 11.76 points from 1,809.13 on previous Friday. Losers outpaced gainers by 609 to 241 with 292 counters unchanged. Total volume increased to 1.87 billion units worth RM1.99 billion from 1.55 billion units worth RM1.36 billion on Thursday. Weekly turnover increased to 9.49 billion shares worth RM9.20 billion from previous week’s 8.68 billion shares worth RM8.30 billion. Read more >>

FBM KLCI - lower on profit-taking

Stocks on Bursa Malaysia closed lower yesterday on profit-taking after three straight days of gains and taking the cue from regional markets amid the fall in oil prices. The FBMKLCI shed 12.26 points or 0.67% to close at 1,829.91, after hovering between 1,845.76 and 1,828.04 throughout the day. Market breadth was negative with losers outpacing gainers by 567 to 252 with 304 counters unchanged. Total volume fell to 1.55 billion units worth RM1.36 billion from 1.73 billion units worth RM1.47 billion on Wednesday. Read more >>

FBM KLCI - higher on technical rebound

Stocks on Bursa Malaysia rebounded to close in positive territory yesterday, spurred by bargain hunting mostly in selected blue-chips and heavyweights. The FBMKLCI rose 11.9 points or 0.66% to close at 1,818.38, after fluctuating between 1,805.35 and 1,818.38 throughout the day. Advancers thumped decliners by 437 to 345, with 306 counters unchanged. Total volume increased to 1.76 billion units worth RM1.71 billion from 1.41 billion shares worth RM1.39 billion transacted on Monday. Read more >>

FBM KLCI - lower on continued weak sentiment

Stocks on Bursa Malaysia closed broadly lower yesterday, dragged down by losses in blue-chips and small-capitalised stocks, in line with weak market sentiment in other Asian markets, although there was strong demand for Chinese stocks as the Shanghai-Hong Kong Stock Connect makes its debut. The benchmark FBMKLCI settled at its intra-day low of 1,806.48, down 7.31 points or 0.04%, after trading as high as 1,814.58. Losers led gainers by 532 to 245, with 286 counters unchanged. Total volume decreased to 1.41 billion shares worth RM1.39 billion from 1.64 billion units worth RM1.6 billion on last Friday. Read more >>

FBM KLCI - closed just above 1,600-point

Stocks on Bursa Malaysia closed higher yesterday on improved sentiment in regional markets after Eurozone leaders agreed on a 120 billion Euro package as a short-term measure to combat the debt crisis. The benchmark FBM KLCI gained 1.70 points or 0.11% from last Friday to close at 1,600.85. Gainers led losers by 412 to 302, while 334 counters were unchanged. Turnover decreased to 1.078 billion shares worth RM1.284 billion from 1.301 billion shares worth RM1.885 billion last Friday.

The FBM KLCI opened 0.72 point higher at 1,599.87 and climbed to the intra-day high of 1605.22 within the first hour of trading, but active profit-taking activity kept the key index from climbing further and slid to close near the opening. Chart-wise, the FBM KLCI formed a white inverted hammer candlestick which indicates the bulls’ effort was met with selling pressure from the bears, and the FBM KLCI is likely to stay range-bound and continue to consolidate today within the flag chart pattern with immediate overhead resistance at 1,605 while the downside support is at 1,591.

MACD is almost flat but its histogram was shorter, indicating the key index is losing its momentum and goes into a consolidation. RSI (14) was marginally higher at 59.7 from 58.8 previously, reflecting the mild gain and the short term relative strength is still in the mildly bullish state. Stochastic, however, has hooked downward to 66.9 from 68.3, indicating an inherent weakness is developing. Mixed readings from the indicators showed that the FBM KLCI is going into a consolidation mode and is likely to stay range-bound.

The overall trend of the FBM KLCI remained up. However, the short term trend is turning sideways as the 5-day SMA has just crossed below the 10-day SMA with the index just floating above these two short term moving averages, and a break below the 5-day SMA at 1,598 would likely see the key index sliding towards the immediate support at 1,591. With the total market volume staying just above 1 billion shares, the overall market is likely to stay quiet with some rotational play on the second and third liners.

Overnight, the Dow fell -8.70 points or -0.07% to close at 12,871.39. Today, the FBM KLCI is likely to trade within a range of 1,593 to 1,611.

This week's expected range: 1570 – 1631
Today’s expected range: 1593 – 1611

Resistance: 1605, 1608, 1611
Support: 1593, 1596, 1598

Stocks to watch : FABER, KIANJOO, TSH, HOHUP, IVORY, SCOPE

FBM KLCI - lower on continued consolidation

Stocks on Bursa Malaysia closed mostly lower yesterday, weighed by losses in heavyweights, with sentiment remaining cautious over high oil prices, and questions remained as to whether the European Central Bank’s second liquidity injection could resolve the Eurozone debt crisis. The FBM KLCI ended 2.31 points lower at 1,556.73, after opening 3.09 points higher at 1,562.13. Losers led gainers by 511 to 309 while 309 counters were unchanged. Turnover was higher at 1.727 billion shares worth RM1.588 billion, from 1.642 billion shares, worth RM1.633 billion transacted on Monday.

The FBM KLCI opened 3.09 higher at 1,562.13 and slid lower throughout the day and hit the intra-day low of 1,552.62 at late afternoon before rebounding to close off low. Chart-wise, the FBM KLCI formed a bearish black candlestick with long lower shadow which is a confirmation to the top reversal signal produced by the black inverted hammer candlestick formed on Monday. This indicated that the market was under selling pressure, but there are buying supports when it comes down to the support level. Nevertheless, the FBM KLCI is still trapped in the consolidation range and formed a rectangle shape chart pattern.

MACD was lower, indicating a continued loss in the market momentum. Nonetheless, as it is still above the zero-line, the current weakness is viewed as just a correction in a bull market. RSI (14) slid lower to 59.6, indicating a continued loss in the short term relative strength of the key index, and has now moved into the mildly bullish zone from the bullish zone previously. Stochastic slid lower to 69.1, also indicated that the key index is losing its strength and the short term down cycle is in continuation. Readings from the indicators showed that the FBM KLCI is losing its momentum and is poised to further consolidate. Nevertheless, it has not turn bearish yet.

The short term trend of the FBM KLCI remained sideways while the medium and longer term trend is still up. Immediate over resistance zone is at 1,567 to 1,577 while the immediate downside support zone is at 1,553 to 1,540, with 1,549 being the critical support level. A break below the 1,549-point level will likely see the FBM KLCI sliding lower to the 1,540 and 1,530 zone. The volume registered reflected the consolidation mode of the index-link counters but the penny stocks were still in active rotational play.

Overnight, the Dow rose +23.61 points or +0.18% to close at 13,005.12, the first time since financial crisis. Today, the FBM KLCI is likely to trade within a range of 1,542 to 1,573.

This week's expected range: 1541 – 1577
Today’s expected range: 1542 – 1573

Resistance: 1562, 1567, 1573
Support: 1542, 1547, 1552

Stocks to watch: ZELAN, HSL, KIANJOO

FBM KLCI - retreated from new high on heavy profit-taking

Stocks on Bursa Malaysia ended mixed yesterday with gains seen in the finance counters amid weak performances of the overseas market, following the slump at the Hong Kong and China stock markets. The FBM KLCI closed 2.17 points or 0.14% higher at 1499.11, after briefly touching 1504.19. Decliners outnumbered advancers by 497 to 328 while 283 counters were unchanged. Turnover was lower at 1.169 billion shares worth RM1.636 billion from Tuesday’s 1.374 billion shares worth RM1.874 billion.

The FBM KLCI opened 0.74 point lower at 1496.20 but surged to the intra-day high of 1504.37 within the first half an hour after market opened. Heavy profit-taking activities immediately appeared which sent the key index down to 1496.73 before late afternoon bargain hunting activities lift the key index to close off low at 1499.11, just 0.89 points below the 1,500-point key psychological resistance level. Chart-wise, the FBM KLCI formed a shooting-star candlestick, which is a bearish top reversal signal, hence, the key index is likely to correct downward further. Immediate support zone for the key index is found at 1493 to 1478, while the overhead resistance zone is at 1500 to 1505.

MACD continued to slide lower, however, its histogram continued to turned shorter upward, indicating a slow down in the bearish downward momentum, and the building up of positive momentum. RSI (14) continued to climb higher into the bullish zone and is now at 68.7. Stochastic is at 70.5, and has started to move higher, indicating the beginning of an up cycle. Signals from the indicators are signaling a bullish outlook for the FBM KLCI in the short term.

The underlying uptrend of the FBM KLCI remained intact, and as the FBM KLCI has made an attempt in testing the 1500-point level, it is expected to continue testing the level in the near term. Overnight, the Dow fell -43.18 points or -0.39% lower to close at 11,126.28. Today, the FBM KLCI is likely to trade within a range of 1487 to 1513.

This week's expected range: 1459 – 1516
Today’s expected range: 1487 – 1513

Resistance: 1504, 1508, 1513
Support: 1487, 1491, 1495

Stocks to watch: DNP, KFC, CSCSTEEL, SAPCRES, YTLLAND, KIANJOO

FBM KLCI - continued to close at fresh year high

Stocks on Bursa Malaysia closed mixed yesterday, with the benchmark index advancing for the fourth consecutive days due to gains in Maxis, CIMB and Sime Darby. Interests were seen in selected heavyweights ahead of their quarterly results. However, gains were capped as investors took profits after the recent gains. The FBM KLCI closed 7.04 points or 0.51% higher at 1385.51 after opening 2.12 points higher at 1380.59. Losers outpaced gainers by 377 to 334 while 312 counters were unchanged. Volume dwindled to 998 million shares worth RM1.615 billion compared with Wednesday’s 1.112 billion shares worth RM1.755 billion.

The FBM KLCI opened with an up gap of 2.12 points and surged to the morning session high of 1383.71, and profit-taking activities pulled it off high to consolidate around 1381, buying interest on selected heavyweights in the last hour pushed the index to close at 1385.51, the highest point of the day. The key index formed a bullish white candlestick which indicates continuation of the uptrend. After breaching through the resistance at 1383, the key index is expected to continue its upward journey to test the next level of resistance at 1395.

MACD continued to climb higher after making a golden-cross yesterday, indicating the picking up in the upward momentum. RSI(14) at 75 is very bullish, continued to move higher into the overbought zone. Stochastic at 97.4 is also short term overbought. Signals from the indicators are indicating a very bullish undertone of the FBM KLCI. However, the overbought signs may forewarn of a possible pull-back soon.

The underlying short, medium and long term trend of the FBM KLCI remained up, and a rally towards the 1400 level is expected. The overhead resistance zone now lies at 1390 to 1400 while the immediate downside support zone is at 1360 to 1370.

In view of the bullish undertone and strong uptrend of the key index, any correction downward to the support level should be viewed as an opportunity to accumulate quality shares at lower price. Overnight, the Dow rose +9.69 points or +0.09% higher to close at 10,415.54. Today, the FBM KLCI is likely to trade within a range of 1376 to 1391.

This week's expected range: 1327 – 1395
Today’s expected range: 1376 – 1391

Resistance: 1387, 1389, 1391
Support: 1376, 1378, 1382


Stock to watch: UKB, KEURO, KIANJOO

KLCI lacking participation

The KLCI started Friday(071207) with a positive mood, the CI touched the record high of 1449.70 within the first twenty minutes of the session, and thereafter profit taking sets in and sent the CI down to the low of the day at 1431.77, an 18 points retracement from the peak but closed off low at 1434.04 (-6.35, -0.44%). Losers outnumbered gainers with 542 to 275. Volume traded was weak at only 790 million shares, this clearly indicates the local market lacks participation from the mass retailers, the CI's gain over the last few days was merely due to the gain in a few heavy weights.

Technically, Friday's price action has lead to the formation of a bearish engulfing candlestick which indicates distribution, especially happening near the top. The KLCI may continue to retrace downward to the 1423 level, which may provides support for the immediate term. For the medium term the 1400 psychological support is important. For the long term, our KLCI is still on the uptrend. Base on the trend channel, we are looking at the very possible target of 1500, this target may be achieved by the first quarter of 2008.

Some of the stocks that may offer short term trading opportunity are Kianjoo and Pohkong.
















Disclaimer: The above is not a recommendation to buy or sell, all suggestions mentioned are purely for academic study purposes for our trend trader club members only, and the author may have personal interest and position in some of the examples mentioned. Any losses incurred if you were to trade base on the study examples above is solely your own responsibility. Do consult your dealer before taking any action

Temporary bottom

The market has been bearish for the last few days as a spill over effect of the Dow's poor performance, however, our KLCI has been showing good resilience. As usual, the market started off the day with a slight positive sentiment with the CI registering the days high of 1385.89 within the first half an hour, thereafter, it went into the red territory hitting the low of 1370.33 and made a "u" turn upward after 3 pm, and as usual the magic hand brings the CI to close at 1383.43 (+1.08, +0.078%) forming a bottom reversal candlestick known as Hammer. From the chart, one can see that our CI is finding good support around the 1380 level, the market breadth of 420 gainers to 388 losers shows that the KLSE is not at all that bearish, in fact many counters such as KBES, MPHB, CBSTECH are showing signs that they can't wait to go up. Well, as the saying, "what goes up must come down, and what came down will go up too", that is how the market works. The broad trend of the KLCI is still up, the present is only a minor correction within a major uptrend. The market may go "yo-yo" between 1380 and 1413 to build a base before it climb further up, however, I believe that with the good effort of the whole nation our KLCI will continue to move up, slowly but steadily because Malaysia boleh.

On the regional side, Hang Seng Index (HSI) also showed the formation of a Hammer-like bottom reversal candlestick. From the chart one can see the immediate support of the HSI on the 50 day MA. The next major support for the HSI is around 26500, if this level can't hold, then the HSI will really turn bear. HSI's volatility is really different from that of KLCI, one must learn to get used to it. It is just like going to Indonesia, one must get used to the juta (million) of Rupiah that one carries, don't be nervours.

As for the DJI, it is showing a bullish Engulfing bottom reversal candlestick, the bulls are fighting back. As mentioned in the previous post, the 12950 level must be defended for the uptrend to be maintained, it did. With this, I believe a temporary bottom is formed, and DJI may go into a choppy sideway market while waiting for their problems to be solved.

Back to our KLSE, some of the counters that shows strong upward move amid the bearish time are MPHBWB, KIANJOO, CBSTECH, HARNLEN, KBES, and IE.

Disclaimer: The above is not a recommendation to buy or sell, all suggestions mentioned are purely for academic study purposes for our trend trader club members only, and the author may have personal interest and position in some of the examples mentioned. Any losses incurred if you were to trade base on the study examples above is sole your own responsibility. Do consult your dealer before taking any action.