WALL STREET >>> Stay Vigilant

Tough Market Ahead;
Dow Tanked 140 Heading Into Sept

This is a tough market to make money using a trend-following system. The ranging markets may continue for some time and requires different techniques, using shorter term momentum oscillators.

Reminder:
End of the third quarter is a bearish time of the year, with many major crashes (1929, 1987) occuring in October. We are likely to see further consolidation in September followed by a breach of support. The breach, however, may either resolve into a primary down-trend or rally sharply to complete a bear trap. All we can do is remain vigilant and stick to objective signals.

Dow Jones Industrial Average
The Dow found support at 10000 and rallied sharply on Friday but then again reversed 140 points Monday. Expect another test of resistance & support at 10500 and 10000 respectively. Reversal below the former primary support level at 9900 would indicate a primary down-swing, with a target of 9000*.

Twiggs Money Flow (21-day) respect of the zero line would be a positive sign suggesting minimal support for a new up-trend.

FBMKLCI Futures

Index futures' immediate resistance at 1,450 level

THE spot month contract on FTSE Bursa Malaysia Derivatives closed at 1,414 last Friday with open interest of 10,566 contracts. It finally broke the 1,400 level effortlessly. Volume was moderate throughout the whole episode. Having ended at the upper end of this range, traders may adopt the strategy of entry on pullback, especially when it nears the support level of 1,380.

Based loosely on the trading pattern of the past two weeks when the futures were traded around the 1,400 and loose support was at 1,380, it would not be surprising to find the prices finally breaking this mould as it enters its next trading phase, which is the mark-up period. After a series of normalised trading pattern the past two weeks, we are now expecting market volatility to pick up and heavier gyration take place. The closing at 1,414 could be the tip of the iceberg of heavier volatility ahead.
The breach into the overbought territories on the Relative Strength Index and the Commodity Channel Index are not expected to trigger concern of a major correction as momentum moves into a trending pace. Given this direction, traders should pay close attention to the possibility of a further strengthening in prices as a breakout has taken place.

What the bulls may find in their favour is the imminent positive crossover on the Moving Average Convergence Divergence signal. This should ground any concern of a bearish revival. Over the medium term, we may see fresh recovery in the market. The primary trend is still positive and we see the current development as the continuation to positive aspiration.

Tactically, the spot contract looks more bullish on the weekly chart as it continues to sail along the rising trendline. Notwithstanding the volatility on the daily chart, the smoothened weekly chart looks much more promising. With support intact at the 1,400 level, the immediate resistance can be located at the 1,450 level.

Technical Reports

The Moving Average Convergence Divergence turned positive with the faster above the signal line. Both lines remain in the negative region. The daily Relative Strength Index closed at the overbought, while the daily Commodity Channel Index finished at the overbought.

Minyak sawit mentah dijangka cecah RM3,000 satu tan

HARGA minyak sawit mentah (MSM) Malaysia dijangka meningkat 20 peratus kepada sekitar RM3,000 satu tan pada separuh kedua 2010 berikutan kekangan bekalan susulan cuaca tidak menentu memperlahankan pertumbuhan pengeluaran dan mengukuhkan permintaan, kata penganalisis di Godrej International, Dorab Mistry.

Beliau berkata, terdapat aliran meningkat kukuh dalam harga minyak makanan khususnya minyak sawit yang ketika ini diniagakan sekitar RM2,500 di Bursa Malaysia Derivatives (BMD). Minyak sawit menokok enam peratus pada Julai, selepas susut dua bulan berturut-turut sebelum ini.

“MSM di BMD akan diniagakan hampir RM3,000 dan kemudian berkemungkinan menokok melepasi harga sasaran itu bergantung kepada faktor pengeluaran dan ekonomi dunia,” katanya dalam satu ucapan di Brazil.

Pengeluar MSM utama dunia Indonesia dan Malaysia berdepan pengeluaran hambar selepas cuaca kering El Nino membantutkan pengeluaran dan merencatkan bunga sawit yang kaya dengan minyak pada separuh pertama 2010.

Ia disusuli corak cuaca La Nina yang juga boleh memberikan kesan negatif kepada pengeluaran kerana ia membawa lebih banyak hujan dan menghentikan tuaian buah sawit di kawasan tertentu.

Peladang bimbang hujan lebat menyukarkan kerja pengangkutan minyak sawit ke kilang dan pelabuhan.


“Saya berpegang kepada ramalan pengeluaran MSM Malaysia pada 2010 iaitu pada 17.2 juta tan. Pengeluaran MSM Indonesia juga mengecewakan dan saya rasa perlu mengurangkan ramalan pertumbuhan kepada 500,000 (daripada satu juta tan),” katanya.

WALL STREET >>> DJIA Leaps 165 Points as Bernanke Soothes Investors

Buyers grabbed stocks on Bernanke's hopeful stimulus

After a brief trip into the red this morning, stocks eventually powered higher thanks to reassuring remarks from Federal Reserve Chairman Ben Bernanke. At a conference in Jackson Hole, Wyo., the central banker pledged to do whatever's necessary to resurrect the U.S. economy, should "unexpected developments" stifle the recovery.

Federal Reserve Chairman Ben Bernanke on Friday acknowledged what many Americans have been sensing for months – the economic recovery is in trouble.

While balancing his remarks with observations on how far the economy has come since the darkest days of the recent financial crisis, Bernanke conceded that growth has stalled and that the Fed remains poised to enact new programs to get things moving again.

Using cautious language, the Fed chief described economic growth as “somewhat less vigorous than we expected.” Stubbornly high unemployment is a particular concern for Fed policy makers, according to Bernanke.

The promise did more than just pacify the Street, with investors essentially shrugging off a downwardly revised forecast from Intel Corp. and another 787 Dreamliner delay from fellow blue chip Boeing Company. What's more, the bulls even triumphed despite a Commerce Department report showing second-quarter gross domestic product rose at a slower pace than previously estimated, with the major market indexes paring the majority of their weekly deficits by the close.

Further reflecting investors' revived appetite for riskier assets was the action in the bond markets, according to a senior technical strategist, who noted the heftiest single-session drop for the iShares Barclays 20+ Year Treasury Bond (TLT) exchange-traded fund in over a year.

"Proving we all can't win all the time, it was a great day for stocks, but a horrible day for bonds. The risk trade was off for the day, as money came running out of the safety play and into risky assets," he said.

The Dow Jones Industrial Average (DJIA – 10,150.65) reclaimed the 10,000 level and then some today, adding 164.8 points, or 1.7%, as all but one of its 30 components finished higher.

Leading the advancing equities were industrial issues DuPont and Alcoa, with Hewlett-Packard bucking the trend amid a heated battle for 3PAR Inc.. Thanks to today's triple-digit advance, the Dow finished the week on a relatively mild deficit of 0.6%.

The S&P 500 Index (SPX – 1,064.59) followed suit by rallying 17.4 points, or 1.7%, successfully surmounting short-term resistance in the 1,060 region. In similar fashion, the Nasdaq Composite (COMP – 2,153.63) advanced 34.9 points, or 1.7%, though the index's intraday surge was stifled by its 10-week moving average. For the week, the SPX surrendered 0.7% while the tech-rich COMP suffered a 1.2% loss.

Bernanke's assurance weigh on the dollar; Crude 3rd straight win
Crude futures finished higher for the third straight session today, as Fed Chairman Bernanke vowed to take action if the economic recovery begins to falter. The promise weighed on the value of the greenback, boosting the appeal of the dollar-denominated commodity among foreign-currency holders. Against this backdrop, crude oil for October delivery advanced $1.81, or 2.5%, to end at $75.17 per barrel – black gold's first finish north of $75 per barrel since Aug. 18. For the week, the front-month contract added 2.3%.

Central Bank measuures to resist deflations lift GOLD
Meanwhile, gold futures ended a wishy-washy session just fractionally higher today, as Bernanke said the central bank would take measures to resist deflation. By the close, December-dated gold futures gained 20 cents, or less than 0.1%, to settle at $1,237.90 an ounce.

For the week, the front-month contract added 0.7%, marking the malleable metal's fourth straight weekly gain. Elsewhere, September-dated silver futures tapped a multi-month peak of $19.34 an ounce early in the session, ending the week with an impressive gain of 5.8% -- silver's best week-over-week performance since early April.

HAPPY WEEKEND

BURSA MALAYSIA >>> Closing Market Data 27 Aug 2010

BURSA & THE FBM KLCI

Other than a stellar week, what is there to comment some more?

Pls click on any image to ENLARGE & view data

HAPPY WEEKEND

WALL STREET >>> DJIA Tumbles Below 10000

Stocks Hit By Broad Base Selloff; Dow At 7 Weeks Low Ahead Of GDP

Today's market action was an eerie reversal of Wednesday's pattern. Yesterday, a negative housing report sparked early losses -- which were then erased by an afternoon wave of bargain-hunting. Unfortunately, traders seem to have misplaced their rose-colored glasses overnight: Stocks started off on strong footing today after a surprisingly large drop in weekly jobless claims, but lingering economic anxieties pressured the major market indexes into negative territory by the time midday rolled around.

In particular, a bit of bad news from the Kansas City Fed seems to have sparked the sudden shift in sentiment; the region's manufacturing index dwindled to zero in August, down substantially from July's reading of 14. As a result, the major market indexes reversed course from respectable gains to modest daily losses -- and the Dow Jones Industrial Average (DJIA) settled south of the key 10,000 mark.

“This market continues to be very fragile. All economic data coming out of Washington has put a damper on this market,” said a senior Wall Street analyst.

The Dow Jones Industrial Average (DJIA – 9,985.81) finished on a deficit of 74.25 points, or 0.7%, as all but two of its 30 components closed lower. Boeing and Home Depot were the only advancing blue chips, while Cisco Systems paced the 28 declining Dow members.

The Dow finished the day south of 10,000 for the first time since July 6, and has already racked up a weekly loss of 2.2%.

The S&P 500 Index (SPX – 1,047.22) followed suit by shedding 8.1 points, or 0.8%, and breaching support at 1,050 for the first time since July 6. Likewise, the Nasdaq Composite (COMP – 2,118.69) gave up 22.9 points, or 1.1% -- but the tech-heavy COMP remained within its recent trading range between 2,100 and 2,150.

Crude futures inched slightly higher, notching a second consecutive daily win despite turmoil in the equities market. Black gold has lured buyers since dipping as low as the $70 region earlier this week, and the trend toward bargain-hunting continued today -- even after stocks gave back their morning advance following the Kansas City Fed report. Crude oil for October delivery ended on a gain of 84 cents, or 1.2%, at $73.36 per barrel.
Conversely, gold futures staged a modest retreat after attaining an eight-week peak on Wednesday. The day's mixed bag of economic data didn't offer traders any cues, and so commodity players erred on the side of profit taking. As a result, gold for December delivery wrapped up the day on a drop of $3.60, or 0.3%, at $1,237.70 per ounce.

HAPPY TRADING

TECHNICAL ANALYSIS : Composite Index 26/08/2010 / 综合指数 2010年 08月 26日

综合指数 2010年 08月 26日

如图中箭头A所示，富时综合指数出现回弹，上扬11.03点或0.8%，这使到综指重新回到1400点的水平，1400点再次的成为综指当前的支持水平，阻力水平则是1436点的费氏线。

如图所示，布林频带（Bollinger Bands）收窄3%，所以虽然综指回弹，不过综指目前仍然算是处于调整巩固的格局中，直到布林频带再度打开为止。在综指调整巩固时，通常布林中频带（Bollinger Middle Band）将成为综指调整的第一目标，它也是综指的动态支持线，所以只要在能在布林中频带上获得扶持，综指有望继续转强，直到综指跌破布林中频带为止。

如图中箭头B所示，马股的成交量减少21.6%，这使到成交量跌破了40天成交量移动平均线（VMA）的水平，这显示在综指出现调整的时候，投资者开始小心翼翼，或减少交易。无论如何，综指在午盘后上扬，这有望使到投资者接下来再度回笼。

如图中箭头C所示，由于随机指标（Stochastic）再度上扬，所以综指的短期走势再度达到100%的水平，由于随机指标处于70%以上，所以综指的短期走势并未下跌，不过随机指标再度触及100%使到综指短期过热的警报未拆除，综指仍然有短期调整的风险。

总的来说，综指虽然回弹至1400点以上，不过综指短期走势仍然过热，因为布林频带仍然处于收窄的趋势。以技术而言，综指将继续维持调整巩固的格局，直到布林频带重新打开为止，届时若综指仍然处于布林中频带以上，综指将有望恢复上扬的趋势。

Composite Index 26/08/2010

As indicated by A, the FBM KLCI rebounded on Thursday, gaining 11.03 points or 0.8%, with the KLCI standing above the 1400 level. Immediate support for the KLCI remains at 1400 while the resistance is at 1436 WinChart Automatic Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands contracted 3%, suggesting that the KLCI might be consolidating. If the KLCI should consolidate, the market direction would be unclear, until the re-expansion of the Bollinger Bands.

As indicated by B, total market volume declined 21.6%, with volume falling below the 40-day VMA level. This suggests that most investors are being cautious while staying on the sidelines. If volume should stay low, the market is less likely to pick up its strength.

As indicated by C, the Stochastic is touching 100% again, signaling that the short term movement of the KLCI is over-heated again. Nevertheless, with the Stochastic above 70%, the market movement

for the short term is still bullish biased.

In short, the KLCI returned to above 1400 level, but short term over-bought condition remains intact. The KLCI is likely to consolidate with the Bollinger Bands contracting but immediate technical outlook is still on the positive side.

HAPPY TRADING

FBM KLCI Futures >>> Market Overview

FKLI Higher In Line With Strong Cash Market
THE FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures contracts closed higher yesterday in line with the steadier cash market and overnight gains on Wall Street, dealers said.

August 2010 contract rose 16 points to 1,409.5, September 2010 gained 19 points to 1,409.5, December 2010 lifted 16.5 points to 1,408 and March 2011 rose 15 points to 1,408. Volume rose to 19,925 lots from 11,567 Wednesday while open interests added to 23,167 contracts from 19,459 contracts previously.

The FBM KLCI gained 11.03 points to close at 1,408.

FKLI Recommendation
Go SHORT at next rally

WALL STREET >>> Dow Snap 4 Days Losing Streak

Bulls Wave Off Dreary Data; Dow Erases Triple-Digit Slide

Bright and early this morning, the stage was set for another sell-off. Fresh on the heels of Tuesday's gruesome existing-home sales plunge, traders learned today that new home sales plummeted to an all-time low in July. Sales for the month sank 12.4% to a seasonally adjusted snail's pace of 276,000, falling well short of economists' expectations. And as if that weren't enough negative news for one morning, U.S. durable goods orders improved by a slimmer-than-forecast 0.3% in July.

Stocks spiraled lower right out of the gate as traders panned this latest round of downbeat data... but a strange thing happened between lunchtime and the closing bell. After four straight days of losses, stocks finally dipped low enough to lure in some bargain hunters. By the time 3 p.m. rolled around, the major market indexes were cautiously exploring positive ground -- and the bulls proved their mettle by keeping stocks afloat right through the close thus reversing a 4 days funk.

In fact, the Dow Jones Industrial Average (DJIA – 10,060.06) strengthened its grip on the key 10,000 level, ending the day on a slim gain of 19.6 points, or 0.2%. A total of 21 blue chips trekked higher, led by Home Depot; meanwhile, United Technologies paced the eight decliners. General Electric shares spent time on both sides of breakeven before finishing completely flat.

In a close reflection of Tuesday's trading, the Dow's rally attempt today was capped by the 10,100 region.

The S&P 500 Index (SPX – 1,055.33) also notched a minor daily gain, tacking on 3.5 points, or 0.3%. The SPX's eleventh-hour momentum fizzled out in the 1,060 neighborhood, near the site of Tuesday's bearish gap.

Finally, the Nasdaq Composite (COMP – 2,141.54) managed to rack up the day's healthiest advance, with the tech-rich index climbing 17.8 points, or 0.8%. However, like its broad-market brethren, the COMP is still trading well below its 10-day moving average.

Bargain Hunters Lift Crude Oil

Crude futures celebrated the end of a five-day losing streak, with black gold muscling its way modestly higher by the close. Oil took a dive in early trading after a government report showed weekly increases to crude and gasoline supplies, but it seems that traders have already priced in their concerns about bloated inventories.

Like stocks, oil futures seemed to benefit from being short-term oversold; the contract touched an intraday nadir of $70.76 this morning, which was its lowest price since June 8. However, a late-day buying push propelled crude oil for October delivery to a daily gain of 89 cents, or 1.2%, at $72.52 per barrel.

HAPPY TRADING

BURSA MALAYSIA >>> Closing Market Data 25 Aug 2010

MARKET DOWN 0.63% ON PROFIT TAKINGS

FBM KLCI Close Below 1400

Stocks on Bursa Malaysia fell 0.63% to close at 1396.97 points on profit taking activities, in line with weaker regional peers on the back of cautious sentiment among investors following overnight losses on Wall Street.

At 5.00pm the FBM KLCI fell 8.80 points on late selling, pushing the 30-stock index down to end the day at 1,396.97. The market traded within a range of 8.86 points between an intra-day high of 1405.27 and a low of 1396.41 during the session.

Lagging Movers were AXIATA (-8 sen to RM4.42), SIME (-11 sen to RM7.76), IOI (-9 sen to RM5.16), CIMB (-6 sen to RM7.85) and MISC (-15 sen to RM8.75). Leading Movers were GENTING (+9 sen to RM8.99), MAXIS (+4 sen to RM5.45), MAYBANK (+1 sen to RM8.13), YTL (+5 sen to RM7.48) and YTLP (+1 sen to RM2.29).

Turnover was 873 million shares valued at RM1.73 billion. The broader market saw declining stocks beating advancers 585 to 186 while 268 stocks were unchanged.
At Bursa Malaysia, BAT fell the most, down 76 sen to RM43.86 in late selling with 22,100 shares done. Lafarge Cement lost 16 sen to RM6.95 while RHB Cap, HELP and MISC shed 15 sen each to RM6.58, RM3.85 and RM8.75 respectively.
Among glove makers, Hartalega lost 20 sen to RM7.63, Supermax and Latexx-WA 16 sen each to RM5.07 and RM2.65. Glove makers fell on concerns a stronger ringgit could impact their exports in the short-term.
Actively traded stocks include TIMECOM, AXIATA, TEJARI, GENM, GENTING, SIGGAS, MAYBANK, SCOMI, DIALOG and BJCORP.

The Finance Index eased 0.59% to 12642.31 points, the Properties Index slipped 1.06% to 840.63 points and the Plantation Index lost 0.91% to 6500.27 points.

The FBM Emas Index slipped 69.64 points to 9,358.74, the FBM70 Index slid 97.521 points to 9,165.52 and the FBM ACE Index dwindled 48.14 points to 3,738.70.

HAPPY TRADING

WALL STREET >>> Unimpressive Bulls

The major US market indexes sacrificed key technical support levels

Monday started off promising as the Dow climbed more than 90 points at the opening bill amid enthusiasm for the latest developments on the M&A front that suggest confidence in the economy and stock valuation.

If you were keeping an eye on the market last week, today's action had an eerily familiar ring to it. A flurry of merger-and-acquisition activity translated to early gains, but enthusiasm over Wall Street's renewed appetite for dealmaking quickly gave way to lingering economic concerns. There were no major data points on the docket today -- but with key reports on the housing market and second-quarter gross domestic product due out later this week, traders erred on the side of caution. Despite ramped-up bidding wars for 3Par and Potash Corp. stocks were struggling to stay above the breakeven line by midday.

By the close, all three major market indexes had given back their early gains to finish narrowly below short-term support levels -- opening the door for either an oversold bounce or a fresh wave of selling pressure on Tuesday.

The Dow Jones Industrial Average (DJIA – 10,174.41) sacrificed its recent perch above 10,200, racking up a daily deficit of 39.2 points, or 0.4%. Fourteen of the Dow's 30 components closed lower, led by Caterpillar and Cisco Systems, while Merck and Wal-Mart set the tone for the 14 gainers. Splitting the difference were Bank of America and Chevron, which both finished flat.

The S&P 500 Index (SPX – 1,067.36) settled just a hair's breadth below the recently supportive 1,070 neighborhood, with the index swallowing a loss of 4.3 points, or 0.4%. Finally, the Nasdaq Composite (COMP – 2,159.63) notched a daily deficit of 20.1 points, or 0.9%, ending on the south side of support at the 2,160 level.

Crude futures ended slightly lower today, with black gold moving inversely to the U.S. dollar. Less-than-stellar economic data out of the euro zone helped propel the greenback higher, making dollar-denominated oil futures less attractive. Plus, the same general skittishness that pressured stocks this afternoon bled over to oil futures and other riskier assets.
As a result, crude oil for October delivery ended the day on a drop of 72 cents, or roughly 1%, at $73.10 per barrel.

HAPPY TRADING

BMD Crude Palm Oil Futures Outlook

NO CLEAR DIRECTIONS

To some CPO is on a downtrend but TA being subjective, CPO looks like consolidation to ZL after a run-up from 06 July. It seems to display some minor support / bargain hunting as prices drift lower to the 2500 Support level clinging to the 30 MA for immediate support.

A 10 & 30 MA Golden Cross will be a significant BUY SIGNAL.

The Bollinger Bands (which is not shown due to congestion) in daily chart are NOT expanding even with prices below Mid BB. This is the first sign that the bears are not in total control and optimism remains until the BB starts expanding noticeably.

In the 60 mins chart, the Stoch rebounded off the oversold 20 mark into the neutral 50 whilst the MACD also showed some hook-up.

CPO benchmark Nov gain RM16 today with prices stopping at the Mid BB. No Bollinger Bands expansion seen due to insufficient buying support. The overnite Soybean Oil prices will be decisive for CPO prices to sustain it's position above Mid BB coming session.

Technically prices are slightly stronger resistance wise than last few sessions with bears totally dominant. Hopefully the bulls can regroup and offer mre resisrance from here.

FCPO Recommendation

Until CPO prices is noticeably well supported above the 30 MA, ZLBT advice caution for LONGS / BUYERS.

However a BUY ON DIP around 2500 level with 2480 Stoploss is recommended

FKLI 1400 Not If But When. Foregone Conclusion

THE FBM Bursa Derivatives Malaysia Composite Sp0t Month Index futures closed at 1,390 with an open interest of 17,205 contracts. The resistance at 1,380 was soft last week when futures contract penetrated above this line to close at 1,390 last Friday against the backdrop of a higher cash index.

The decisive break above this line is yet another milestone for the futures contract as it signals the domineering uptrend pattern in the long-term view. The presence of the bullish candlestick pattern on the daily chart is yet another positive reminder of the bullish pace.

Beginning from late July this year, the positive "V" daily chart formation marked the commencement of a technical rebound which is now at the tail end. This bullish pattern with its beginning at 1,334 level which is now more than 50 points higher.However, moving forward based on the depth of the previous correction, any weak correction from current level may open opportunity to reload as the spot contract has finally broken the previous consolidation band.

The weekly chart remains vibrant as it has realised the strong results from the daily counterpart and now posing a concern to the bears. The slow but steady climb may have posed a headache to the structural bears.

Tactically for this week the spot contract may continue to head up after breaking from the 1,380 resistance mark. The presence of month-end convergence may force the premium in the market to be narrowed and the August may tail the cash index closely. Notwithstanding this "technical" issue, medium term direction of the contract may likely challenge the 1,400 level.

FKLI Recommendation

Buy on dip / selloff

Preferably during forced selling / margin calls

Target 1400 Stoploss 1380

FBM KLCI Weekly Technical Analysis

FBM KLCI 16 > 20 Aug 2010 Weekly Technical Analysis

For the week ended on the 20th of August, 2010, the KLCI lost a total of 34.87 of a points, with weekly high of 1395.03 points and a weekly low of 1358.95 points, total volume was 4,902,271,200 shares, upped 24.4%.

Main Chart: The KLCI continued its rally after being supported by the 14, 21, 31 EMA, breaking above 1370.52 resistance. The next resistance for the KLCI is at 1400 points while the support is at 1354 and 1340.63 WinChart Automatic Fibonacci Retracement.

Volume: As indicated by B, total market volume was above the 40-day VMA level, this shows that the market is well-participated as the market sentiment as a whole was still positive. Generally, if volume should remain above the 40-day VMA level, it is likely to have a positive effect for the market.

Bollinger Bands: The Bollinger Bands re-expanded last week, with the KLCI above the Bollinger Middle Band, thus the KLCI started its rally. The rally of the KLCI is likely to continue until the contraction of the Bollinger Bands or the expansion rate decreases.

MACD: The MACD histogram ticked higher, suggesting that the KLCI movement is improving. The improvement of the KLCI is likely to carry on as long as the MACD histogram is still rising.

WinChart RSI: The WinChart RSI stays above 70%, thus suggesting that the mid term movement of the KLCI is still on the bullish side.

Stochastic: The Stochastic is touching 100%, suggesting that the short term movement of the KLCI is indeed bullish, but it is now over-heated, thus a pull back is likely to take place in the near future. If the Stochastic should break below 70%, it would be a signal suggesting a beginning of a technical correction.

In a Nut Shell: Uptrend of the KLCI remains intact as long as the KLCI is still above the rising 14, 21, 31 EMA, as the immediate technical outlook is still bullish biased. However, short term over-heated is in-sight, and therefore, we shall expect some sort of a pull back, while not affecting the uptrend.

Following are more readings of its technical indicators:-

Moving Averages: The FBM KLCI stayed firmly above all 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 Friday.
On Balance Volume (OBV): Its short-term OBV trend continued to stay above the support of its 10-day exponential moving averages.
Relative Strength Index: Its 14-day RSI stood at the 78.35 per cent level on Friday.

Outlook
Initial mild pullbacks on Monday sent the FBM KLCI to its intra-week low of 1,358.95 on Monday, just above this column's envisaged support zone (1,324 to 1,356 levels).
Subsequent persistent rebounds sent the FBM KLCI to its intra-day high of 1,395.03 on Friday, moving into the confines of this column's envisaged resistance zone (1,364 to 1,398 levels).
A quick glance at the performance of the FBM KLCI's 30 components, its gainers overwhelmed losers by 24 to 4.
BAT, Genting, Maybank and CIMB's combined gains of 64 sen, 43 sen, 41 sen and 39 sen helped the FBM KLCI in tracing out a week-on-week gain of 34.8 points, or 2.56 per cent. Axiata remained the top performing component with a total year-to-date gain of RM1.30, or 42.62 per cent.

The FBM KLCI's weekly chart continued to stay above its immediate downside support (See FBM KLCI's weekly chart - A3:A4) at the market close on Friday. Also, it continued to stay below the support of its intermediate-term uptrend (A5:A6).

Chartwise, the FBM KLCI's daily trend staged a successful re-test of the support of its intermediate-term uptrend (See FBM KLCI's daily chart - B1:B2) on August 12 before staging continuing rebound yesterday. It continued to stay above its intermediate-term downtrend (B3:B4).

The FBM KLCI's daily, weekly and monthly fast MACDs (moving average convergence divergence) stayed above their respective slow MACDs on Friday.

The FBM KLCI's 14-day RSI stayed at 78.35 per cent level on Friday. Its 14-week and 14-month RSI stayed at 70.65 and 68.26 per cent levels respectively.
Last week, this column commented that the FBM KLCI was likely to build another base for the next rebound. It did. The base was short and swift before unleashing a week-on-week gain of 34.87 points.

The FBM KLCI is poised to overcome its psychological resistance of 1,400 with the announcement of some quarterly results by some heavyweight components of the FBM KLCI. Second and third liners will continue to provide the market momentum.

Next week, the FBM KLCI's envisaged resistance zone remains at the 1,399 to 1,433 levels while its immediate downside support is at the 1,357 to 1,291 levels.

HAPPY TRADING