Bursa Malaysia >>> April Market Revisited

APRIL 2011 MARKET REVIEWS
Bursa Malaysia shares fell back into base building mode in April, forcing the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) to pull back from a fresh three-month high, after China raised interest rates on rising inflation concerns, increased euro zone woes and lower IMF forecast for global growth. The ruling coalition’s success in securing a two-third majority in the Sarawak state elections, announcement of seven new EPP projects by the PM and the strong ringgit which appreciated to a new 13-year high however failed to kick-start a lack-luster market bent on consolidation.

For the month of April, the FBM KLCI slipped 10.18 points or 0.66% to close at 1,534.95, with losses on IOI Corp (-47sen), Maybank (-21sen), Tenaga (-24sen) and Sime Darby (-21sen) offsetting gains on Genting Bhd (+56sen) and YTL Corp (+17sen). Average daily traded volume and value for April moderated marginally to 1.24bn shares worth RM1.67bn, compared with the 1.25bn and RM1.74bn average in March.

Small cap stocks fell back into hibernation mode, but the FTSE Bursa Malaysia Small Cap (FBMSC) index, a capitalization weighted index of the top 98% of main board stocks, excluding the FTSE Bursa Malaysia 100 (FBM100) index, managed to add 105.61 points, or 0.8% in April to 13,102.1. The FTSE Bursa Malaysia EMAS (FBMEMAS) index, a capitalization weighted index of stocks in the FBM100 and FBMSC, retraced 36.37 points, or 0.3% to 10,576.09. Year-to-date, the FBMSC appreciated 3.78% while the FBMEMAS is up 1.94%.

The table below depicts the performance of KLCI, FBM Emas and FBM Small Cap Indices compared with major global and regional stock indices for the month of April and year-to-date.

The FBM KLCI Stalled Below 1,565 in April

SMA 50-day and 100-day Cushion Downside

The FBM KLCI formed a short-term double-top early last month (Chart 1), peaking at 1,565.04 on 4 April and 1,563.43 on 8 April, prior to a dip to extreme low of 1,514.94 on 19 April, before ending above the 50-day moving average line (in green). The 1,565 high ties in with the 38.2% Fibonacci Projection of the upswing from 1,445 low of Sept 2010 to the previous 1,532 peak of Nov 2010, while downside for the index was adequately cushioned by the 50-day and 100-day (in red) moving averages.

FIBONACCI FAN TARGETS & PROJECTIONS

The April consolidation has forced the signal line on the weekly MACD indicator to hook down again on the weekly chart (Chart 2), suggesting potential further consolidation in May. Nonetheless, a breakout above the January peak of 1,576 is foreseen by the second half of the year, which would lift the index up to record heights. Using the Fibonacci Projection method, upon a successful breakout, the subsequent upside targets are 1,655, 1,704, 1,743, 1,782 and 1,831, which are the respective 23.6%FP, 38.2%FP, 50%FP, 61.8%FP and 76.4%FP of 1,243 low (27 May 2010) to 1,576 high (6 Jan 2011). These projected upside targets are likely to be met as the market trade towards 2012.

Base and Best Case Upside to 1,813/2,043 by Jan 2012

Looking ahead on the monthly KLCI chart below (Chart 3), we maintain our base case upside projection for extended wave (3) rally to target of 1,813, assuming the prior wave 3 rally (from 548 low of April 2001 to 1,525 peak of January 2008) equals the current up-wave from 836 low, that is (1,525 - 548 = 977 + 836 = 1,813). Our best case upside projection is 2,043 by Jan 2012, assuming wave (3) equals 1.236X of wave 3.

Conclusion : KLCI Target 1,813 (Base Case) and 2,043 by Jan 2012 (Best Case)

We maintain that the recent correction from the Jan 2011 peak of 1,576 ended at the double-bottom support of 1,474, confirming our best case scenario for downside termination. As such, the index should resume the wave (3) rally from the March 2009 low of 836, and aim for upside target of 1,813 (base case) and 2,043 (best case) by Jan 2012, assuming wave (3) equals 1.236X of wave 3. The months of May and June were quite mixed, translating to a mixed 2Q performance, but with a reasonable 2% average return for the period.

HAPPY WEEKEND

TECHNICAL ANALYSIS : 综合指数 2011年04月21日 / FBMKLCI 21/04/2011

综合指数 2011年 04月 21日
如图中箭头A所示，富时大马综合指数（综指）周四一度在14、21、31天综合加权移动平均线（Exponential Moving Average – EMA）以上开始，不过最后却再次跌破14、21、31天EMA，以1526.33点挂收，按日下跌4.69点或0.31%。因此这表示综指还未能成功突破14、21、31天EMA。

另一方面，布林频带（Bollinger Bands）还未打开，这表示综指基本上还未形成新的趋势，而继续有维持在盘整格局的迹象。无论如何，综指阻力水平落在1537.77点的费氏线，支持水平则是1513.56点的费氏线，及1498或1500点的水平。

 如图中箭头B所示，马股总成交量周四增加8%，这使到成交量稍微突破40天的成交量平均线（VMA）。接下来若成交量能继续维持在40天的成交量平均线以上，那表示马股整体上的交投恢复到健康的水平。一般是，若成交量能继续维持在40天的VMA以上，那将有助于马股的整体的表现。

如图中C圈所示，随机指标（Stochastic）再次跌破30%水平，这表示综指短期有再次进入偏弱格局的风险。以技术而言，只要随机指标继续处于30%水平，那综指接下来短期的走势将是偏弱的。

总的来说，综指至今还未形成任何趋势，而继续有维持在盘整格局的迹象。无论如何，投资者可以留意综指接下来是否形成较高底（Higher-Low），转强的先兆；还是较低高峰（Lower-High），转弱的首个特征。

FBM KLCI 21 April 2011
As indicated by A, the FBM KLCI opened above the 14, 21, 31 EMA, but it failed to sustain its gains, and at the close, losing 4.69 points or 0.31%, at 1526.33 points, and failed to stay above the 14, 21, 31 EMA.

Meanwhile, the Bollinger Bands has not expanded clearly, thus this suggests that the KLCI is still in a consolidation mood. Nevertheless, resistance for the KLCI is at 1537.77 WinChart Automatic Fibonacci Retracement while the support is at 1513.56 and 1498 or 1500 level.

As indicated by B, total market volume increased 8%, with volume breaking above the 40-day Volume Moving Average by margin. If volume should stay above the 40-day Volume Moving Average, it means that the market participation is at a 'healthy' level, which usually implies an improvement of the market sentiment.

As circled at C, the Stochastic retreated, and back below 30%, and if the Stochastic should stay below 30%, this suggests that the market movement for the short term is likely to be weak.

In short, the KLCI has not formed any new trend. Readers could monitor if the KLCI should later form a higher-low (early characteristic of an uptrend), or a lower-high (an early sign of weakness.)

HAPPY TRADING