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Saturday, January 30, 2010

Bursa Malaysia >>> Corrections To Continue Next Week

Technical Analysis FBM KLCI 290110 Friday
The KLCI ended lower on Friday, while rebounded at the 1250 support, the KLCI closed 5.35 points or 0.4% lower at 1259.16 points. As indicated by A, the support for the KLCI remains at 1250 Automatic Fibonacci Retracement while the resistance is still at 1272 Automatic Fibonacci Retracement followed by the 1300 level.

As shown in the chart, the Bollinger Bands expanded 20%, which is a slower expansion rate than the previous day; this implies that the falling KLCI is likely to slow down, or it might be consolidating soon. If the KLCI should rebound, the Bollinger Middle Band would be a target of the rebound.

As indicated by B, total market volume increased 4.1%, while barely staying above the 40-day VMA level. Therefore, the overall market participation is still on the healthy level. If volume should fall below the 40-day VMA level, the market sentiment is likely to turn weaker.
As indicated by C, the Stochastic %K line touches the %D line. If the %K line should cross above the %D line, it would be an early signal suggesting a beginning of a technical rebound. But still, the short term movement of the KLCI shall remain weak unless the Stochastic should break above 30% level.

In conclusion, the KLCI is due for a technical rebound or a consolidation. But if the KLCI has to break away from the bearish biased movement, it has to break above the Bollinger Middle Band.

Following are the readings of some of the FBM KLCI's technical indicators:

* Moving Averages: The FBM KLCI continued to stay above its 100- and 200-day moving averages. It stayed below its 10-, 20-, 30- and 50-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 below the support of its 10-day exponential moving averages.
* Relative Strength Index (RSI): Its 14-day RSI stood at the 32.91 per cent level on Friday.

Bursa Malaysia >>> Corrections To Continue Next Week
The FBM KLCI's sharp technical pullback hit its intra-week low of 1,253.09 yesterday, breaching the support zone (1,262 to 1,296 levels).

For the week just ended, the benchmark FBM Kuala Lumpur Composite Index shed 41.29 points to 1,259.16 from last week's 1,300.45.

Some FBM 30 component lower liners cum speculative stocks recorded substantial losses for the past week

For the week ended Friday, the Finance Index dipped 336.7 points to 11,078.79 from 11,415.49, the Plantation Index fell 251.59 points to 6,188.13 from 6,439.72 and the Industrial Index was 114.86 points lower at 2,586.04 from 2,700.9.

The FBM Emas Index dropped 266.0 points to 8,484.0, the FBM Top 100 Index decreased 261.54 points to 8,249.32 and FBM ACE Index declined 113.38 points to 4,381.83. Total turnover slipped to 5.23 billion shares worth RM7.66 billion from 5.927 billion shares worth RM7.437 billion a week earlier.

Volume on the main market dropped to 4.14 billion units valued at RM7.5 billion from last week''s 4.838 billion units valued at RM7.188 billion. Call warrants went down to 193.12 million units worth RM37.04 million from 284.809 million units worth RM55.089 million. The ACE Market volume fell to 558.8 million units valued at RM93.18 million from 748.839 million units valued at RM165.66 millioOverall market sentiment is likely to remain fragile. The FBM KLCI is likely to further consolidate its recent gains. Intermittent technical rebounds will cushion the impact of the week's consolidations.

Second and third liners will continue to remain the trading focus of the week.

Next week, the FBM KLCI's envisaged resistance zone hovers at the 1,262 to 1,296 levels while its immediate downside support is at the 1,221 to 1,255 levels.


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