FBM KLCI and FKLI Not About To Kill; Steady Yourself For Some Thrills and Spills

Gonna Be A Rough Ride This Week

Share prices on Bursa Malaysia are likely to be higher next week on the back of positive corporate data as well as the government's initiatives in boosting the economy and with the market abuzz with talks on privatisation which kept interest positive.

On external factors, the direct impact of other global markets on the country would be minimal as Bursa Malaysia was quite resilient compared to other regional bourses. He expected the support level next week to be at 1,320 and the next resistance level at 1,350. For the week just-ended, the key FBM KLCI rose 2.57 points to 1336.65.

Share prices on Bursa Malaysia rose a for a second week, lifting the blue-chip benchmark index to a two-month high while small-cap stocks staged a strong comeback by late week as retail participation in the sector picked up after a month-long absence due largely to the Fifa World Cup distraction.

The 30 blue-chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) climbed 12.34 points, or 0.93 per cent last week to settle at 1,336.65, with Axiata (+11 sen), Maybank (+12 sen), Public Bank (+16 sen), Tenaga (+16 sen) and Sime Darby (+10 sen) contributing to three quarters of the index's increase.

The Finance Index advanced 148.94 points to 12,100.61, Plantation Index increased 15.56 points to 6,289.50 and the Industrial Index rose 21.18 points to 2,655.03. Total volume for the week rose to 3.40 billion shares worth RM5.94 billion from 2.81 billion shares worth RM5.02 billion last week.
The daily slow stochastics indicator for the FBM KLCI crossed for a sell signal deep in the overbought zone, implying weakness ahead, which is further reinforced by a similar sell signal on the weekly indicator triggered in the overbought region.
However, the 14-day and 14-week Relative Strength Index (RSI) climbed higher towards the 60 reading, suggesting improving upside momentum. Meantime, the daily Moving Average Convergence Divergence (MACD) signal line expanded higher following last week's buy signal, while the weekly MACD signal line has hooked up to indicate improving upside potential. Meanwhile, the +DI and -DI lines on the 14-day Directional Movement Index (DMI) indicator sustained a bullish expansion, but the ADX line weakened to suggest a weakening uptrend.

Spot month July KLCI futures contract traded on Bursa Malaysia Derivatives was up 12 points or 0.9 per cent week-on-week to 1,340.5 for a slightly lower 3.85 point premium to the cash index, compared with the 4.19 point premium the previous Friday.

FKLI August, September and December each increased three points to 1,340, 1,339 and 1,338.5, respectively.
Turnover, however, declined to 4,545 lots from 7,695 lots on Thursday while open interest rose to 19,958 contracts from 19,344 contracts on Thursday.

The above FKLI Monthly Chart shows a distinctive Cup & Handle formation but be reminded since that is a monthly chart, be ready for a lot of rumbles & tumbles in-between . The longterm outlook os optimistically positive for FKLI.

FKLI Recommendations

BUY ON DIPS & SUDDEN SELLDOWNS

U.S. Marhets >>> A Defining Week Ahead

Defining Week Ahead For World Markets

Tug-O-War Between Good Earnings and Bad Economic ReportsDJIA Drops 261 Points on Surprise Consumer Confidence Plunge
Traders had plenty of news to digest today: Goldman Sachs finally settled with the Securities and Exchange Commission; BP plc finally plugged its leaky oil well; Apple Inc. finally conducted a press conference to address "Antennagate"; and heavy hitters Citigroup, Google, General Electric, and Bank of America all reported quarterly earnings.
However, most of the day's mayhem can be traced back to a massive plunge in consumer confidence.By the time the dust settled, the Dow Jones Industrial Average (DJIA – 10,097.90) was sitting on a drop of 261.4 points, or 2.5%. The blue-chip barometer ended below its 10-day and 20-day moving averages for the first time since July 6, as all 30 of its components fell. Bank of America led the pack with a 9.2% plunge, while American Express (AXP), Cisco Systems (CSCO), Home Depot (HD) and GE all shed more than 4%.
The Dow ended the week on a drop of about 1%, reversing just a slim portion of last week's gains.
The S&P 500 Index (SPX – 1,064.88) swallowed a decline of 31.6 points, or 2.9%, bringing its weekly loss to 1.2%.
In the process, the SPX unceremoniously snapped a two-day winning streak above its 50-day moving average.
The Nasdaq Composite (COMP – 2,179.05) suffered the day's most dramatic percentage loss, giving up 70 points, or 3.1%, by the time the closing bell mercifully sounded.
However, the COMP notched the slimmest weekly loss, ending just 0.8% below last Friday's close.ANALYST QUOTE OF THE WEEK
"What was looking like a nice week turned into a huge sell-off," observed a Senior Technical Strategist, noting that the unfortunate combination of disappointing earnings and troublesome economic data "was all it took for the bears to take control.
Nonetheless, after a nearly 5% jump last week >>> a 1.2% drop for the week isn't all that bad."

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FCPO Recommendations

SELL INTO STRENGTH / RALLY

BURSA MALAYSIA >>> Some Profit Takings Anticipated; Downside Limitation

FBM KLCI: Some Profit Takings Noted; No Major Trend Violations

FKLI Recommendations

BUY ON DIP / WEAKNESS

WALL ST. >>> Dow Erases Triple-Digit Drop

Turnaround Thursday: Triple-Digit Tumble Vanishes

Wall Street enjoyed a wave of late-day buying on Thursday to erase a triple-digit selloff as enthusiasm over possible resolutions to the headaches at BP and Goldman Sachs largely overshadowed economic jitters triggered by a pair of gloomy manufacturing reports.

The financial sector was in focus today, thanks to the latest earnings report from JPMorgan Chase & Co. (JPM). The banking titan topped analysts' second-quarter profit expectations, but cautious comments from CEO Jamie Dimon about JPM's troubled consumer-lending portfolio threw a damper on the upbeat results. Meanwhile, in economic news, traders weighed a steep decline in weekly jobless claims against weak manufacturing data in the New York and Philadelphia regions. After seven straight days of gains for the Dow Jones Industrial Average -- and with heavy hitters Citigroup (C), Bank of America (BAC), General Electric (GE), and Google (GOOG) on deck to report earnings -- the market was rocked by an energetic bout of profit-taking. However, last-minute rumors that Goldman Sachs (GS) reached a settlement with the Securities and Exchange Commission (SEC) awakened the bulls, and stocks pared most of their losses by the close.

"Wow. That was fun, but in the end we were virtually flat," said Senior Technical Strategist Ryan Detrick. "Still, you have to give the bulls the benefit of the doubt. Earnings have been good -- and coming on the heels of the best week in months last week, we're up again this week. Not bad."

The Dow Jones Industrial Average (DJIA – 10,359.31) was down more than 100 points at its intraday nadir, but battled back to finish on a decline of just 7.4 points, or 0.07%. Eighteen of the 30 blue chips advanced, led by Cisco Systems (CSCO) and Intel (INTC), while Travelers Companies (TRV) paced the 10 decliners. IBM (IBM) and Kraft Foods (KFT) split the difference by finishing flat. Despite today's less-than-stellar action, the Dow still notched a third straight daily finish above its 50-day moving average.

The S&P 500 Index (SPX – 1,096.48), on the other hand, managed to close the day slightly higher. The SPX added 1.3 points, or 0.1%, but its momentum was capped by the 1,100 level -- not to mention the sound of the closing bell. Finally, the Nasdaq Composite (COMP – 2,249.08) barely budged, shedding just 0.8 point by the close. Nevertheless, the COMP tackled its own 50-day trendline for the first time since May 12.

Crude futures followed suit with stocks today, ending with a thump in the wake of troubling economic news. Traders panned uninspiring manufacturing reports from the New York and Philadelphia Federal Reserve Banks, and news of China's year-over-year decline in second-quarter gross domestic product only served to heighten concerns about the state of the global economy. However, crude's losses were minimized by the day's not-so-bad report on jobless claims, along with the U.S. dollar's weak showing versus the euro. Crude oil for August delivery gave up 42 cents, or 0.6%, to finish at $76.62 per barrel.

On the other hand, gold futures capitalized on the market's jittery mood. A negative session for stocks, along with the greenback's decline against the euro, helped the malleable metal attract a few buyers today. Gains were muted, though, as traders seemed unwilling to make any big moves ahead of tomorrow's report on consumer-level inflation. August-dated gold futures ended the day with a gain of $1.30 at $1,208.30 per ounce.