KPS may move towards its intermediate resistance zone

SHARE prices on Wall Street hit its all-time high last week, sending share prices on the regional stock markets and Bursa Malaysia higher.

The FBM KLCI staged a follow-through technical rebound, hitting its intra-week high of 1,656.65 before closing at 1,653.96 points on March 8.

Of the FBM KLCI's 30 components, 23 counters posted gains, four registered losses while three remained unchanged.

The index hit its intra-week low of 1,622.81 on Monday before rebounding to its intra-week high of 1,656.65 last Friday, giving an intra-week trading range of 33.84 points compared with the previous week's 20.63 points.

The FTSE Bursa Malaysia Small Cap Index gained 331.22 points to 11,850.94 while the FTSE Bursa Malaysia ACE Market Index eased 0.25 point to the 3,990.16 level.

Meanwhile, the Dow Jones Industrial Average continued to stay above its major psychological support of 14,000. Tech stock-heavy Nasdaq Composite Index moved in tandem with the broader market, closing higher at 3,244.37 points last Friday.

Kumpulan Perangsang Selangor Bhd (KPS, 5843, Main Market Trading/Services Sector) staged a technical rebound last week. Its daily price trend rebounded to close at RM1.06 on March 8, posting a week-on-week gain of five sen.

Following are the readings of some of its technical indicators:-

Moving Averages: KPS' daily price trend stayed above its 10-, 20-, 30-, 50-, 100- and 200-day moving averages at the market close last Friday.

Momentum Index: Its short-term momentum index continued to stay above the support of its neutral reference line last week.

On Balance Volume (OBV): Its short-term OBV continued to stay above the support of its 10-day moving averages.

Relative Strength Index (RSI): Its 14-day RSI had since stayed above the 50 level. Its technical reading stood at the 62.76 per cent level at the market close last Friday.

Outlook

Continuing follow-through technical rebounds on Bursa Malaysia sent the FBM KLCI to a higher close at 1,653.96 points. Selective second and third liners remained the trading focus last week. KPS is one of these counters with a week-on-week gain of five sen, or 4.95 per cent.

KPS' monthly price trend staged a decisive breach of its intermediate-term downtrend pattern formation. It continued to stay above its recent uptrend last Friday.

Its weekly price trend staged a successful technical breakout of its intermediate-term downtrend (See KPS' weekly price chart - B1:B2) and had since continued to stay above it last Friday.

Its daily price trend staged a technical breakout of the neckline of its double-bottom pattern formation (See KPS' daily price trend - C3:C4) last Friday. Earlier, KPS's daily price trend staged a successful re-test of the neckline (C1:C2) of its broader double-bottom pattern formation.

KPS' daily, weekly and monthly fast MACDs (moving average convergence divergence) continued to stay above their respective slow MACDs at the market close on Friday.

Its 14-day Relative Strength Index stood at the 62.76 per cent level last Friday. Its 14-week and 14-month RSI were at the 65.13 per cent and 49.37 per cent levels respectively.

Let's take a look from KPS' new technical indicator, Stochastics Oscillator. It clearly shows that KPS' daily price trend remained in its upbeat momentum.

From the perspectives of the technical breakout of the neckline (C3:C) on its daily price charts, KPS' price trend is now poised to move towards its intermediate-term resistance zone (RM1.10-RM1.28 levels).

The subject expressed above is based purely on technical analyses and opinions of the writer. It is not a solicitation to buy or sell.