Share prices on Bursa Malaysia opened sharply lower on Monday before recovering the earlier losses over the last five trading days. The FTSE Bursa Malaysia Composite Index (FBM KLCI) continued to stay above its critical support of 1,250 when it closed at 1,270.20 points yesterday (Friday 04 Dec).
As expected there was not much excitement in the local stock market. Trading was range-bound amid a cautious mood. Buying momentum also seemed to be weakening as bearish technicals suggested limited upside for Bursa Malaysia shares.The FTSE Bursa Malaysia Small Cap Index added 5.77 points, or 0.06 per cent to close at 9,948.47 points while the FTSE Bursa Malaysia ACE Index gained 58.18 points, or 1.36 per cent, to 4,349.13 level.
Following are the readings of some of the FBM KLCI's technical indicators:
Moving Averages: The index continued to stay above its 30-, 50-, 100- and 200-day moving averages. It stayed below its 10- and 20-day moving averages.
Momentum Index: Its short-term momentum index stayed precariously 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 56.13 per cent level yesterday.
Outlook
The FBM KLCI's sharp technical pullback hit its intra-week low of 1,248.58 on Monday, staging a successful re-test of this column's envisaged support zone (1,233 to 1,267 levels).
Subsequent technical rebounds hit its intra-week high of 1,273.46 on Thursday failed in its bid to re-challenge this column's envisaged resistance zone (1,274 to 1,308 levels.)
The FBM KLCI's weekly chart continued to stay below the support of its intermediate-term uptrend (See FBM KLCI's weekly chart - A3:A4) at the market close on Thursday. 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) on Thursday. Also, it continued to stay above the neckline (B1:B2) of its head-and-shoulders pattern formation.
The FBM KLCI's daily and weekly fast MACDs (moving average convergence divergence) stayed below their respective slow MACDs yesterday. Its monthly fast MACD continued to stay above its monthly slow MACD. It continued to display short-term consolidations at play.
The FBM KLCI's 14-day RSI stayed at 56.13 per cent level yesterday. Its 14-week and 14-month RSI stayed at 72.62 and 63.96 per cent levels respectively.
Last week, the devaluation of Vietnamese dong as well as the Dubai request for "standstill" bailout repayment were likely to trigger the FBM KLCI to breach its near-term support of 1,250. It did. The FBM KLCI hit its intra-week low of 1,248.58 on Monday.
Once again, heavyweight index-linked counters continued to uphold the market momentum for the FBM KLCI to stay above its critical support of 1,250. The index recovered to close at 1,270.20 points yesterday (Friday 4/12/09). Following the two bearish factors confronting the market sentiment, the local bourse is likely to remain in its consolidation mode for another week. Further, overall market sentiment is likely to remain at current level on lack of fresh market leads on the local front.
Looks like it is going to be another quiet week ahead due to the lack of significant market leads and prevailing holiday mood. Analysts believe there is limited upside for the local stock market and buying momentum is likely to remain weak as investors remain on the sidelines.
While market punters may be looking for signs of year-end window-dressing, analysts say the current market trend has yet to provide any clear indication as to when such activities are likely to start. But according to Maybank Investment Bank Bhd head of retail research Lee Cheng Hooi, past trends would suggest that such activities usually start in the middle of December.
Moving Averages: The index continued to stay above its 30-, 50-, 100- and 200-day moving averages. It stayed below its 10- and 20-day moving averages.
Momentum Index: Its short-term momentum index stayed precariously 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 56.13 per cent level yesterday.
Outlook
The FBM KLCI's sharp technical pullback hit its intra-week low of 1,248.58 on Monday, staging a successful re-test of this column's envisaged support zone (1,233 to 1,267 levels).
Subsequent technical rebounds hit its intra-week high of 1,273.46 on Thursday failed in its bid to re-challenge this column's envisaged resistance zone (1,274 to 1,308 levels.)The FBM KLCI's weekly chart continued to stay below the support of its intermediate-term uptrend (See FBM KLCI's weekly chart - A3:A4) at the market close on Thursday. 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) on Thursday. Also, it continued to stay above the neckline (B1:B2) of its head-and-shoulders pattern formation.
The FBM KLCI's daily and weekly fast MACDs (moving average convergence divergence) stayed below their respective slow MACDs yesterday. Its monthly fast MACD continued to stay above its monthly slow MACD. It continued to display short-term consolidations at play.
The FBM KLCI's 14-day RSI stayed at 56.13 per cent level yesterday. Its 14-week and 14-month RSI stayed at 72.62 and 63.96 per cent levels respectively.
Last week, the devaluation of Vietnamese dong as well as the Dubai request for "standstill" bailout repayment were likely to trigger the FBM KLCI to breach its near-term support of 1,250. It did. The FBM KLCI hit its intra-week low of 1,248.58 on Monday.
Once again, heavyweight index-linked counters continued to uphold the market momentum for the FBM KLCI to stay above its critical support of 1,250. The index recovered to close at 1,270.20 points yesterday (Friday 4/12/09). Following the two bearish factors confronting the market sentiment, the local bourse is likely to remain in its consolidation mode for another week. Further, overall market sentiment is likely to remain at current level on lack of fresh market leads on the local front.Looks like it is going to be another quiet week ahead due to the lack of significant market leads and prevailing holiday mood. Analysts believe there is limited upside for the local stock market and buying momentum is likely to remain weak as investors remain on the sidelines.
While market punters may be looking for signs of year-end window-dressing, analysts say the current market trend has yet to provide any clear indication as to when such activities are likely to start. But according to Maybank Investment Bank Bhd head of retail research Lee Cheng Hooi, past trends would suggest that such activities usually start in the middle of December.Meanwhile, OSK Research is maintaining its bullish view for the local stock market towards the near term, as its technical readings are suggesting that the strength of the bulls is still relatively stronger than the bears.
Next week, the FBM KLCI's envisaged resistance zone hovers at the 1,274 to 1,308 levels while its immediate downside support is at the 1,233 to 1,267 levels.
HAPPY TRADING & GOODLUCK2ALL
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