ZLBT Weekend Reviews >>> FBM KLCI Futures

FKLI : Skating On Thin Ice

For the week ended on the 29th of April, 2011, the FKLI Spot month contract gained a total of 9.5 points Friday-to-Friday. with a weekly high of 1539.5 (27/04/2011) and a weekly low of 1516 points recorded last Tuesday. Total market volume traded was 3168 (daily) or 39,792 weekly total contracts versus 31,485 the previous week.

Weekly Hi/Lo range 1539.5 - 1516.0 >>> 23.5 pts. Open / Close range points for the week >>> 1521.0 / 1532.0 = 11. Today Spot month contract April 2011 contract expired at 1532.0

Main Chart : Last week ended 29/04, the FKLI was struggling to stay above the 4, 9,18 EMA (Short-term). The bulls managed to survived but still get underpined by the 1537 Fibonacci Retracement 61.8% for year 2011, Failure to break away convincingly from the 4, 9, 18 EMA indicates the half strength of the FKLI at best. April Spot Month closed at 1532, below the Daily Mid BB.

Bollinger Bands : Basically, the daily Bollinger Bands is still contracting, and this suggests that the FKLI is likely to remain in a consolidation mood. Generally, when the Bollinger Bands is contracting, the direction of the FKLI is expected to remain unpredictive.

MACD : The daily MACD histogram Round Bottom is still uncompleted but with slight improvement nevertheless. Technically, when the MACD histogram is rising, it suggests that the FKLI is slowly gaining strength.

RSI : The daily RSI has risen slightly above neutral 50%, but it has not broken above 70%. If the RSI should climb above 70%, it would be a short term bullish signal for the FKLI. April expired with RSI at 53 >>> a nose above waterline neutral 50%.

Stochastic: Daily Stochastic improved somewhat to 53.90%, inching above the short term neutral territory. This suggests that the short term movement of the KLCI is likely to stay sideway with a tad of improvement bias If May 2011 were to continue where April left off.

Summarizing The Week
Daily Short term movement of the FKLI is noticed to be on the recovery side and since the FKLI has not formed any downtrend, a minimal advantage favours the buyers. Unless, the FKLI breaks below the 4, 9, 18 EMA and should begin to form lower-highs, then the possibility of the FKLI revisiting the 1486 low of the Fibonacci Retracement for this year. As per see over last week performance, the FKLI undertone is not as strong as one would wish it to be. With the major daily technicalities yet to display any potentials to form regular higher highs, a bullish mindset is questionable. Exuberance is an option not the norm.

Weekly mid-term movement is still unconvincing with the RSI 14-day closing the week at 56.1. Stochastic reads 54.3% but with the 14 below the 3 with a death cross flashing a sell signal. Mid-term FKLI traders would feel more confident if the 14-day recross the 3-day line and progress closer to the 70% territory. Weekly histogram remains below the MACD Zero triggerline indicating below par strength of the weekly FKLI. A histogram above and in Round Top formation means more upthrust for the FKLI.

Noticeably, the FKLI weekly candles are seen to be in a Bowl Formation it is stil uncomfortably close to the Bollinger Middle Band. Another green weekly candle will force the BB to expand and with prices above Mid BB during expansion, the sentiments may shift from neutral/bearish to neutral bullish.

The next downsider to monitor is the 30 SMA which is providing support together with the Mid BB. The double indemnity is not very supportive, technically speaking. All it takes is 2 or more negative sessions and the weekly FKLI will turn into a red candle below the mid BB. Once the 30 SMA has been violated, the bears will storm the bull's fort. Should the bears launch an all out attack after the weekly SMA 30 had been neutralised, selling into strength would be a fine option.

For the done week, the FKLI can best be sum up as "unsecured safety."

HAPPY WEEKEND