Sep 14, 2015

FBM KLCI Weekly Technical Outlook

Negative Sentiments Remains - 14 Sep 2015

fbm klci technical chartFBM KLCI Weekly Chart 

Weekly Recap

Trading on Wall Street resumed on a positive tone after the Labour Day public holiday on the back of stabilising China stockmarket. The Dow rallied 390.30 pts to 16,492.68 pts on Tuesday led by technology stocks like Apple Inc. and Amazon.com Inc. However, the Dow retreated on Wednesday as crude oil price dipped significantly; the key index fell 239.11 pts to 16,253.57 pts. Nevertheless, the Dow managed to recoup earlier losses as buying interest started to pick up among healthcare companies like Gilead Sciences Inc. and UnitedHealth Group Inc. – the Dow gained 76.83 pts to 16,330.40 pts on Thursday, followed by another increase of 102.69 pts to 16,433.09 pts on Friday. Last week, the Dow added 330.71 pts.

Meanwhile, tracking the negative performance on Wall Street two weeks ago, coupled with the weaker Ringgit, share prices on Bursa Malaysia started the week on a softer tone as the FBM KLCI fell 6.31

pts to 1,582.85 pts on Monday. However, bargain hunting activities emerged within selected index heavyweights like Genting and Genting Malaysia which sent the key index higher to end at 1,587.12 pts (+4.27 pts), 1,603.36 pts (+16.24 pts) and 1,614.02 pts (+10.66 pts) over the next three trading days respectively. Also, buying interest was noted among small caps and lower liners like Focus Lumber Bhd and Tex Cycle Technology Bhd. Nevertheless, profit taking activities resumed and the FBM KLCI declined 10.42 pts to 1,603.60 pts on Friday. Still, on a W.o.W basis, the FBM KLCI managed to gain 14.44 pts.

 

FBM KLCI Weekly Technical Readings

The weekly MACD Histogram extended another green bar and the weekly RSI is oversold.

Meanwhile, the daily MACD Histogram has turned red, but the daily RSI is hovering above 50.

FBM KLCI Support & Resistance

Last week, the FBM KLCI has rebounded off the 1,560 level and surged above the immediate resistance of the 1,600 psychological level. As both the weekly MACD and RSI indicators are suggesting that the momentum could be recovering over the near term, the FBM KLCI is likely to trend higher towards the 1,640-1,660 levels. Meanwhile, if the FBM KLCI violates below 1,580, next support will be set around 1,530.

Moving Forward

Wall Street may trend sideways over the near term between the 16,000-16,700 levels as investors may still be cautious ahead of the upcoming FOMC meeting. Meanwhile, share prices on the local front could extend its negative trading sentiment as the FBM KLCI is hovering below EMA20. If the 1,560 level is violated, follow-through selling interest will emerge. Nevertheless, export-based and plastic-related will be on traders’ radar.

Sector focus
malaysia oil & gas index

The Oil and Gas user-index trended above the EMA9 level with improved volumes. The MACD Histogram has turned green, but the RSI is overbought. Resistance will be pegged around 78 and 80. Support will be located around 72.47.

by Malacca Securities