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FBM KLCI Futures Close Mostly Higher >>> Upside Predicted Next Week

FBM KLCI Spot (July) Expired 1166.5

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures on Bursa Malaysia Derivatives ended mostly higher today despite gains on the cash market, dealers said. Spot month July 2009 increased 3.5 points to 1,166.5, and August 2009 and September 2009 went up 0.5 point each to 1,164.5 and 1,162.5 respectively, while December 2009 was down 0.5 point at 1,155.5.

Total volume dropped to 10,795 lots from 12,011 lots yesterday while open interest declined to 26,775 contracts from 31,995 contracts previously.On the cash market, the underlying FBM KLCI rose by 14.2 points to 1,174.90.
FBM KLCI Futures Likely To Rise Further Next Week

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures are expected to rise further next week in line with the cash market, dealers said.

On a Friday-to-Friday basis, the KLCI futures for July 2009 contract rose 9.5 points to 1,166.5 while August 2009 contract climbed 7.5 points to 1,164.5. For the other contracts months, September 2009 advanced 7.5 points to 1,162.5 and December 2009 went up 7.0 points to 1,155.5. A total of 65,897 lots were transacted this week, up from 40,017 lots last week.

Open interests increased to 26,775 contracts on Friday from 21,637 contracts previously. On the cash market, the underlying FBM KLCI ended the week higher by 19.02 points at 1,174.9 compared with 1,155.88 previously.

There will be roadblocks

Adding to the evidence supporting a possible FKLI pullback are medium-term indicators, like those noted in the FKLI daily & weekly charts, showing that the market is quite overbought, a condition that will need to be cleared.

In bull market conditions, which ZL would ascribe to our current situation, it is possible for overbought conditions to be worked off even as prices move higher. That is to say that prices may not pull back at all, but simply break up and out of the resistance levels. To the other extreme, a healthy price decline can also do the trick.

ZL is more optimistic with the 2nd option whereby 4 out of the Top 6 FBM namely Sime, Maybank, Commerz & PBB are much more overbought than the other 2 gigantos Tenaga & TM which are in fact lacking in tenacity than say, Genting, GenM or AMMB.

However, any FBM KLCI pullback at this level will not create much stress or anxiety since TM & Tenaga plus some of their peers in FBM 30 should be sufficient to counter balance any anticipated profit taking activities by Sime, Maybank, Commerz or even Public Bank Bhd.

True, the bulls may need a breather but rest assured the bears does not have the immediate strength to turn things around. Any bear infiltrators will be chased off by the bullish defenders. They have bigger guns ..... :D

FKLI Traders all onboard Express Bus to Bull City via Highway 1200!!!

FBM KLCI breaks out of overhead resistance

SHARE prices on Bursa Malaysia consolidated in the first four trading days of this week before staging a sharp rebound yesterday. The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) continued to stay above its critical support of 1,100 points when it closed at 1,174.90 as yesterday.

The FBM KLCI opened marginally lower on Monday before slipping to its intra-day low of 1,148.26. It closed at 1,156.43 points, giving a day-on-day gain of 0.55 point, or 0.05 per cent.
Overall market sentiment on Bursa Malaysia strengthened in tandem with rebounds on regional stock markets on Tuesday. The FBM KLCI closed at 1,172.38, giving a day-on-day gain of 15.95 points, or 1.38 per cent.
The market's rhythm was disrupted when investors reacted to the sharp fluctuations on the Shanghai market on Wednesday. The FBM KLCI closed lower at 1,164.48, giving a day-on-day loss of 7.90 points, or 0.67 per cent. Continuing consolidations and follow-through selling pressure sent the FBM KLCI to its intra-day low of 1,153.81 on Thursday. The benchmark index closed marginally lower at 1,160.66, giving a day-on-day loss of 3.82 points, or 0.33 per cent.

Once again, the top 10 components of the FBM KLCI sent the benchmark higher to 1,176.67 yesterday. The FBM KLCI closed higher at 1,174.90, giving a day-on-day gain of 14.24 points, or 1.23 per cent.
On the foreign front, after last week's sharp rebound gain of 3.72 per cent, the Dow Jones Industrial Average (DJIA) unfolded its consolidations. The DJIA closed at 9,154.46 on Thursday, giving a four-day gain of 61.22 points. The tech stock heavy Nasdaq Composite Index stayed above its support of 1,900 points. It closed at 1,984.30 on Thursday, posting a four-day gain of 18.34 points, or 0.93 per cent.

The Tokyo stock market staged yet another follow-through technical rebound over the last five trading days. The Nikkei 225 Index closed at 10,356.83 yesterday, posting a week-on-week gain of 412.28 points, or 4.15 per cent.

The Hong Kong stock market broke its overhead resistance of 20,000. The Hang Seng Index closed at 20,573.33, recording a week-on-week gain of 590.54 points, or 2.96 per cent.

On Bursa Malaysia, the FBM KLCI rebounded to close higher at 1,174.90 yesterday, giving a week-on-week gain of 19.02 points, or 1.65 per cent.
The FTSE Bursa Malaysia Second Board Index jumped 280.53 points, or 5.608 per cent to 5,291.32 while the FTSE Bursa Malaysia Mesdaq Index gained 160.72 points, or 3.92 per cent, to 4,258.71.

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.
* 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 continued to stay above the support of its neutral reference line.
* Momentum Index: Its short-term momentum index continued to stay above the support of its neutral reference line.
* On Balance Volume: Its short-term OBV trend stayed above the support of its 10-day exponential moving averages.
* On Balance Volume: Its short-term OBV trend stayed above the support of its 10-day exponential moving averages.
* Relative Strength Index: Its 14-day RSI stood at the 77.69 per cent level yesterday.
* Relative Strength Index: Its 14-day RSI stood at the 77.69 per cent level yesterday.
Outlook
The FBM KLCI's consolidation on Monday hit its intra-week low of 1,148.26, staging a successful re-test of this column's envisaged support zone (1,116 to 1,150 levels). Subsequent technical rebounds on Tuesday and Wednesday sent the FBM KLCI to its intra-week high of 1,178.99 on Wednesday, moving into the confines of this column's envisaged resistance zone (1,159 to 1,193).
The FBM KLCI's weekly chart staged a technical breakout of its overhead resistance (See FBM KLCI's weekly chart A5:A6) yesterday. It continued to stay above its resistance-turned-support trendline (A3:A4).

Chartwise, the FBM KLCI's daily trend staged a technical breakout of its overhead resistance (See FBM KLCI's daily chart B1:B2) yesterday. It continued to stay below its intermediate-term uptrend (B7:B8).
The FBM KLCI's daily, weekly and monthly fast MACDs (moving average convergence divergence) stayed above their respective slow MACDs yesterday. It will continue to underpin its near-term trend.
The FBM KLCI's 14-day RSI stayed at 77.69 per cent level yesterday. Its 14-week and 14-month RSI stayed at 75.47 and 57.70 per cent levels respectively. Last week, this column commented that the FBM KLCI was likely to pause for a brief consolidation before resuming its prior technical rebounds. It did.

The FBM KLCI is likely to move into its range-bound phase in consolidating its recent gains. There is an even chance of the index staging a re-challenge of its major psychological resistance of 1,200 sometime next week.
Next week, the FBM KLCI's envisaged resistance zone hovers at the 1,178 to 1,212 levels while its immediate downside support is at the 1,137 to 1,171 levels.

KL Shares End +1.2%; May Test 1200 Soon

KLCI ends +1.2% at 1174.90 supported by gains across all sectors following positive cues from Wall Street, gains in regional markets and positive local developments, say dealers. "Some positive changes are taking place in the local market which should improve liquidity and reduce volatility effective August 3.

The planned launch of the 1Malaysia unit trust fund worth MYR10.0 billion has also triggered buying interest from retail investors. There''s a good chance the index may extend gains next week and possibly test psychological resistance at 1200 if this momentum can be maintained," says dealer. Market volume moderate with 1.26 billion shares worth MYR1.95 billion traded. Market breadth positive with gainers leading decliners 485 to 207. Among gainers, Cycle & Carriage (2925) +39.1% at MYR3.70, Handal (7253) +15.5% at MYR1.34, Bumiputra-Commerce (1023) +4.9% at MYR10.80 and Gamuda (5398) +5.7% at MYR3.36.

Palm futures soar as commodities rally

Palm oil futures posted the biggest gain in 10 days after a surge in soybean oil prices widened the gap between the world’s two most consumed edible oils. Soybean oil was 30 per cent more expensive than its rival yesterday, according to Bloomberg data, after the vegetable oil closed up 5.6 per cent on the Chicago Board of Trade. That was the widest gap in a week.

Today’s palm oil gain narrowed the difference to 27 per cent. “The fundamental case for palm oil is very sound at the moment, mainly because the differential between soybean oil and palm oil provides a lot of support,” Nirgunan Tiruchelvam, an analyst at Royal Bank of Scotland Asia Securities (Singapore) Pte, said by phone. Prices eased slightly on mild profit-taking after soaring to intraday high of MYR2,248, says trading executive from Kuala Lumpur-based commodities brokerage; adds market may ease further to cover price gap between yesterday's settlement price, today''s intraday low. "The current rally in prices not sustainable, as CPO futures rose in tandem with CBOT soyoil gains. A downward price correction for soyoil is likely and this may weigh on CPO prices in the next trading session," says Singapore-based trading executive

Palm oil could average US$700 a ton in 2009, he said. The commodity has averaged US$610 so far this year.

Palm oil for October delivery soared as much as RM103, or 4.8 per cent, to RM2,248 (US$638) a ton on the Malaysia Derivatives Exchange, the biggest intra-day gain in 10 days. The contract closed 2.1 per cent higher at RM2,189, down 1.8 per cent for July, a third month of decline.

Soybeans for November delivery yesterday surged 6 per cent, the biggest advance in nine months in Chicago, amid a broader commodities rally, spurred partly by demand for a hedge against inflation as the dollar fell. The contract advanced 0.3 per cent to US$9.74 a bushel at 5:56 pm in Singapore. Soybean oil, crushed from the oilseed, was unchanged at 35.68 cents a pound after gaining as much as 6.5 per cent yesterday.

Crude oil in New York closed up 5.7 per cent yesterday at US$66.94 a barrel. The most active futures gained as much as 1.3 per cent today before trading at US$66.72 a barrel at 5:59 pm Singapore time. Vegetable oils track crude oil as they can be used as fuel substitutes.

Malaysian Exports Palm oil exports from Malaysia, the second largest producer, probably advanced for a third month, rising 14 per cent in July to 1.4 million tons, according to independent surveyor Intertek today. The gain was 15 per cent to 1.41 million tons, estimated Societe Generale de Surveillance, another independent cargo surveyor.

Export gains are needed to boost prices, amid record production, as palm oil is 20 per cent below the year’s high of RM2,799 reached on May 13 and “the market is pricing in for much stronger second half 2009 production,” said a Credit Suisse report today by analysts Teddy Oetomo and Agus Sandianto in Jakarta. Output in Malaysia, the No. 2 producer, gained a fourth month in June on a month-on-month basis, the country’s palm oil board said July 10.

TECHNICAL ANALYSIS >>> 综合指数 2009年 7月 31日 / Composite Index 31/07/2009

综合指数 2009年 7月 31日
如图中箭头A所示，富时综合指数在1163点的胜图自动费氏线获得扶持后，周五上扬14.24点或1.2%，继续站稳在1163点的以上，所以1163点继续成为综指的支持水平，这亦是综指自历史高峰下调50%的黄金分割回归线，综指接下来的阻力水平维持在1186点的胜图自动费氏线。

如图所示，布林频带（Bollinger Band）还是收窄，惟收窄的幅度已经减低，这以为综指的技术调整有结束的迹象。综指目前依然在布林中频带（Bollinger Middle Band）获得扶持，所以接下来若布林频带开始打开，综指的技术调整宣告结束，综指将有望恢复上扬的趋势。

如图中箭头B所示，马股总成交量增加整60%，使到成交量成功的达到了40天成交量移动平均线（VMA），所以只要成交量持续维持在40天平均值，这意味市场的成交量已经达到了足以令综指恢复涨势的水平。

如图中C圈所示，平均乖离的振荡指标（MACD Histogram） 却依然下滑，所以综指目前出现上扬的趋势并未获得振荡指标的确认，换句话说，若振荡指标接下来停止下跌，而且开始形成圆底（Rounding Bottom），那综指的技术调整将确定结束，而出现上扬的趋势了。

总的来说，综指目前有再度恢复涨势的条件，惟万事俱备，只欠布林频带打开的东风。所以接下来只要布林频带开始打开，那综指将能再度上扬，先决条件就是成交量也能维持在40天平均值以及振荡指标开始有上扬的痕迹。
Composite Index 31/07/2009
As indicated by A, the KLCI ended 14.24 points or 1.2% higher on Friday, after being supported by the 1163 Fibonacci Retracement. Therefore, the 1163 Fibonacci Retracement (50% retracement level from the peak of the KLCI) is still the support for the KLCI. Next resistance for the KLCI remains at 1186 Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands Width is still contracting, suggesting the KLCI is still consolidating, but with the rate of contraction has slightly reduced, implying that the consolidation might be coming to an end. If the Bollinger Bands Width should re-expand, it would be an end to the consolidation, and if the KLCI should remain above the Bollinger Middle Band, there is a chance for the KLCI to resume its uptrend.

As indicated by B, total market volume increased 60%, with volume reaching the 40-day VMA level. If volume should remain above 40-day VMA level, the bullish market sentiment is expected to sustain.

As circled at C, the MACD histogram is still falling, while the Rounding Top remains intact, this suggests that the KLCI consolidation remains. If the MACD histogram should form a Rounding Bottom, it suggests the end of the consolidation, and the KLCI could resume its rally.

Generally, the KLCI is set to rally again with healthy market volume, while awaiting for the expansion of the Bollinger Bands Width. If the Bollinger Bands Width should expand with the KLCI above the Bollinger Middle Band, with volume remain above the 40-day VMA level, more upside movement is expected for the KLCI.