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Saturday, October 10, 2009

FBM KLCI cruises past resistance high '09

Share prices on Bursa Malaysia ended today’s session mixed for two straight days amid bullish sentiment buoyed by Wall Street’s strong overnight close, dealers said.

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) ended 3.73 points higher at 1,233.82, making it the highest closing point so far this year.
The benchmark index, which opened 0.04 of a point lower at 1,218.57 this morning, touched an intra-day high of 1,236.89 during the trading session. It had ended 0.942 per cent higher yesterday at a new high of 1,230.09.

According to the dealers, some funds experienced a slowdown in momentum due to the stronger US dollar against most Asian currencies in late afternoon today.
Foreign funds were believed to have helped push the local bourse to the new high as a weaker US dollar earlier shifted overseas funds to Asia.

From a technical view, the dealers noted that the FBM KLCI was well above the immediate resistance level of 1,231.50.
“Any boost would easily cause it to test a new level of 1,242.0,” said one of the dealers.

At the closing bell, the FBM Emas Index advanced 22.50 points to 8,279.43, the FBM Top 100 increased 23.10 points to 8,070.70, the FBM 70 added 18.00 points to 8,095.93 and the FBM ACE Index added 20.12 points to 4,125.19.

The Finance Index went up 57.04 points to 10,332.19 and the Plantation Index gained 21.35 points to 5,971.19 but the Industrial Index was flat at 2,654.83.

Advancers led decliners 344 to 299 with 261 counters unchanged and 390 untraded. Turnover declined to 712.749 million shares worth RM1.211 billion from 812.326 million shares valued at RM1.338 billion yesterday.

KNM Group was the most actively traded stock, adding half sen to be at 80.5 sen with 43.840 million shares changing hands.
It was followed by Time Engineering which rose 15 sen to 34 sen and Green Packet-Warrants which added 1.5 sen to 37 sen.Other actively traded stocks included GenM which fell four sen to RM2.73 and Multi Sports which gained three sen to 53.5 sen.

Among the heavyweights, Sime Darby rose two sen to RM8.60, Maybank dropped three sen to RM6.74, CIMB Group increased 10 sen to RM12.22 and Tenaga Nasional and IOI Corp went up one sen each to RM8.22 and RM5.28 respectively.

On Bursa Malaysia, the FBM KLCI posted a week-on-week gain of 27.57 points, or 2.29 per cent.

Among other indices, the FTSE Bursa Malaysia Small Cap Index gained 263.84, or 2.70 per cent, to the 10,051.31-level, while the FTSE Bursa Malaysia ACE Index added 29.86, or 0.73 per cent, to the 4,125.19-level.

Following are the readings of some of the FBM KLCI's technical indicators:
* Moving Averages: The FBM KLCI continued to stay above its 10-, 20-, 30-, 50-, 100- and 200-day moving averages.
* Momentum Index: Its short-term momentum index stayed above the support of its neutral reference line.
* On Balance Volume (OBV): Its short-term OBV trend stayed above the support of its 10-day exponential moving averages.
* Relative Strength Index (RSI): Its 14-day RSI stood at the 69.67 per cent level yesterday.

Technical Outlook
The FBM KLCI staged a retest of its major psychological support of 1,200 when it hit its intra-week low of 1,203.27 on Monday, staging a re-test of this column's envisaged support zone (1,168 to 1,202 levels).
Subsequent technical rally took the FBM KLCI to its 15-month high of 1,236.89 yesterday, moving into the confines of this column's envisaged resistance zone (1,210 to 1,244 levels).

The FBM KLCI's weekly chart staged a successful re-test of the support of its intermediate-term uptrend (See FBM KLCI's weekly chart -A3:A4) at the market close Friday. It continued to stay above the neckline (A1:A2) of its head-and-shoulders pattern formation.

Chartwise, the FBM KLCI's daily trend continued to stay below the lower support (See FBM KLCI's daily chart - B3:B4) of its intermediate-term uptrend channel (B3:B4 and B5:B6) yesterday. Also, the FBM KLCI had since stayed above the neckline (B1:B2) of its head-and-shoulders pattern formation.

The FBM KLCI's daily, weekly and monthly fast MACDs (moving average convergence divergence) stayed above their respective slow MACDs yesterday. The FBM KLCI's 14-day RSI stayed at the 69.67 per cent level yesterday. Its 14-week and 14-month RSI stayed at the 74.45 and 61.63 per cent levels respectively.

Last week, this column commented that buying support might step in during the later part of the week in its preparations for the Budget rally. The FBM KLCI had since embarked on its pre-Budget rally when it chalked up a week-on-week gain of 27.57 points.
Overall market sentiment will continue to display underlying resilience in its run-up to Budget tabling day. Share prices on Bursa Malaysia will continue to maintain their technical composure within its pre-Budget day window.

Next week, the FBM KLCI's envisaged resistance zone hovers at the 1,237 to 1,271 levels while its immediate downside support is at the 1,196 to 1,230 levels.

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