Index likely to track firm regional markets

OVERALL market sentiment displayed its underlying resilience when the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) staged a technical rebound for the week ended March 1, 2013. It continued to stay above its major psychological support of 1,600 when it hit a low of 1,619.97 on Monday.

The local bourse staged a technical pullback from a low of 1,619.97 on Monday before rebounding to its intra-week high of 1,640.60 yesterday, giving it an intra-week trading range of 20.63 points.

The index registered a gain of 15.36 points over the last five trading days of the week. Gainers outperformed losers by 21 to 7.

Share prices on Bursa Malaysia moved in tandem with the performances on Wall Street and regional stock markets.

The FBM Small Cap Index registered a week-on-week gain of 1.11 per cent while the FBM ACE Market Index posted a gain of 1.26 per cent.

Riding on the technical rebounds on the regional stock markets, the FBM KLCI rebounded to close with 1,637.44 points yesterday, recording a gain of 15.36 points, or 0.95 per cent.

Following are the readings of some of the FBM KLCI's technical indicators:-

Moving Averages: The FBM KLCI continued to stay below its 30-, 50- and 100-day moving averages at the market close yesterday. It had since stayed above the support of its 10-, 20- and 200-day moving averages.

Momentum Index: Its short-term momentum index had since stayed above the support of its neutral reference line at the market close yesterday.

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 52.79 per cent level at the market close yesterday.

Outlook

The FBM KLCI hit its intra-week low of 1,619.97 on Monday, stopping short of this column's envisaged support zone (1,584 to 1,618 levels).

Subsequent technical rebounds sent the FBM KLCI to an intra-week high of 1,640.60 yesterday, moving into the confines of this column's envisaged resistance zone (1,626 to 1,660 levels).

On the benchmark index, UMW Holdings Bhd, UEM Land Holdings Bhd, British American Tobacco (M) Bhd and Hong Leong Financial Group Bhd's week-on-week gained 5.29 per cent, 5.26 per cent, 5.26 per cent and 4.74 per cent, respectively.

UEM Land remained the week's top performer with a year-to-date gain of 30 sen, or 14.29 per cent.

The benchmark index rebounded from an intra-week low of 1,619.97 on Monday before moving to an intra-day high of 1,640.60 yesterday.

It continued to stay within the confines of its long- and intermediate-term trendlines (See FBM KLCI's weekly chart A1:A2 and A3:A4) at the market close yesterday.

Chartwise, the FBM KLCI stayed decisively above its intermediate-term uptrend (See FBM KLCI's daily chart B3:B4) yesterday.

The key index continued to stay below its long-term resistance (B1:B2) at the market close yesterday.

The FBM KLCI's daily fast MACD had since stayed above its daily slow MACD yesterday. Its weekly and monthly fast MACDs continued to stay below their respective slow MACDs.

The index's 14-day RSI stayed at the 52.79 per cent level.

Meanwhile, its 14-week and 14-month RSI stayed at 49.98 and 59.03 per cent level respectively.

The FBM KLCI hit its intra-week low of 1,619.97 on Monday before recovering to close at 1,637.44 points yesterday, staying above its intermediate-term uptrend (B3:B4). The index stayed above the 1,630-level yesterday.

Judging from the week's market behaviour, the benchmark index is likely to remain resilient, staying in line with the firmed performances on the regional stock markets.

Next week, the FBM KLCI's envisaged resistance zone is at the 1,641 to 1,675 levels while its immediate downside support is at the 1,600 to 1,633 levels.

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