FBM KLCI may continue to consolidate gains

MIXED performance on the regional stock markets dictated the overall market sentiment on Bursa Malaysia for the week ended March 15.

The FBM KLCI paused to consolidate its recent rebound gains. It had since stayed below its support of 1,650 when it hit a week high of 1,627.64 yesterday.

During the week, FBM KLCI staged a technical pullback from a high of 1,664.39 on Tuesday to a low of 1,627.64 yesterday, giving an intra-week trading range of 36.75 points.

The index posted a loss of 26.32 points over the last five trading days during the week. Losers had managed to outperform gainers by 21 to 8.

The index opened lower at 1,652.32 points on Monday before hitting a high of 1,664.39 on Monday. It ended the week at 1,627.64 yesterday.

Share prices on Bursa Malaysia moved in counter-trend with the performances on the Wall Street and Tokyo stock markets.

The FBM Small Cap Index registered a week-on-week gain of 0.11 per cent while the FBM ACE Market Index registered a week-on-week loss of 0.72 per cent.

Facing mixed performances on the regional stock markets over the week the FBM KLCI posted a loss of 26.32 points, or 1.59 per cent.

The FBM Small Cap Index added 0.11 per cent, to close at 11,864.37 points while the FBM ACE Index eased 0.72 per cent, to 3,961.58.

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

Moving Averages: The FBM KLCI had since stayed below its 10-, 20-, 30-, 50-, 100- and 200-day moving averages yesterday.

Momentum Index: Its short-term momentum index stayed below the support of its neutral reference line yesterday.

On Balance Volume: Its short-term OBV trend stayed below the support of its 10-day exponential moving averages.

Relative Strength Index: Its 14-day RSI stood at the 41.45 per cent level yesterday.

Outlook

The key index hit a high of 1,664.39 on Tuesday, moving into the confines of this column's envisaged resistance zone (1,658 to 1,692 levels).

Subsequent technical pullbacks sent the index to a low of 1,627.64 yesterday, staging a re-test of the confines of this column's envisaged support zone (1,616 to 1,650 levels).

On the local bourse, BAT (M) Bhd, YTL Power International, UMW Holdings, and IOI Corporation Bhd eachposted week-on-week losses of 9.57 per cent, 7.01 per cent, 6.92 per cent and 4.32 per cent respectively.

UEM Land Holdings remained the week's top performer with a gain of 43 sen, or 20.48 per cent. It stayed within the confines of its long- and intermediate-term trendlines (See FBM KLCI's weekly chart - A1:A2 and A3:A4) yesterday.

Chartwise, the FBM KLCI stayed above its intermediate-term uptrend (See FBM KLCI's daily chart - B1:B2) yesterday. It stayed below its short-term resistance (B3:B4) yesterday.

The FBM KLCI's daily fast MACD stayed above its daily slow MACD, staying above its neutral reference line, yesterday.

Its weekly and monthly fast MACDs stayed below their respective slow MACDs.

The FBM KLCI's 14-day RSI stayed at the 41.45 per cent level on Friday. Its 14-week and 14-month RSI stayed at 47.19 and 57.87 per cent levels at the market close last Friday.

The index stayed just above its intermediate-term uptrend (B1:B2).

With that, the FBM KLCI is set to consolidate its recent gains further. Key heavyweight index-linked counters is likely to dictate the week's overall market sentiment.

Next week, the benchmark index's envisaged resistance zone is at the 1,632 to 1,666 levels while its immediate downside support is at the 1,590 to 1,624 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.