Lower liners on Bursa likely to remain buoyant

SHARE prices on Bursa Malaysia consolidated within tight trading ranges over the last trading days immediately after the Lunar New Year holidays.

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) consolidated on two out of the three trading days under review.

Second and third liners dominated trading activities over the week. The benchmark index trended between 1,518.35 and 1,527.57 levels yesterday. The index closed at 1,520.90, giving a week-on-week loss of 1.76 point, or 0.12 per cent, for the week ended yesterday.

The benckmark index's 30 index-linked components resumed their prior consolidations over the week. The FBM KLCI opened marginally lower at 1,523.70 points on Wednesday before hitting its intra-day low of 1,518.35.

Share prices on Bursa Malaysia consolidated on two out of the three trading days over the week. Overall market sentiment trended within tight trading range during the week. Trading focus centred on select second and third liners over the week.

Overseas the Dow Jones Industrial Average rebounded marginally over the last four trading days. It stayed above its psychological support of 12,000 when it ended at 12,734.63 points on January 27, giving a week-on-week gain of 14.15 points, or 0.11 per cent.

The tech stock-heavy Nasdaq Composite Index moved in tandem with the general market sentiment last week.

The Nasdaq Composite Index closed at 2,805.28 points on Thursday, giving the key index a week-on-week gain of 18.58 points, or 0.67 per cent.

The Tokyo stock market staged another technical rebound during the week. The Nikkei 225 Index ended the week higher at 8,841.22 points yesterday, giving a week-on-week gain of 74.86 points, or 0.85 per cent.

Meanwhile, the Hong Kong stock market continued to rebound higher over the week. The Hang Seng Industrial Index ended the week higher at 20,501.67 points, giving a week-on-week gain of 391.30 points, or 1.95 per cent.

Back on the homefront, the benchmark index saw its Small Cap Index gaining 343.55 points, or 2.82 per cent, to close at 12,536.36 points while the FTSE Bursa Malaysia ACE Index rebounded 128.91 points, or 2.95 per cent, to 4,496.64 level yesterday.

Followings are the readings of some of its

technical indicators:

Moving Averages: The FBM KLCI continued to stay above all its 10-, 20-, 30-, 50-, 100- and 200-day moving averages.

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

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

Relative Strength Index: Its 14-day RSI stood at the 58.06 per cent level yesterday.

Outlook

The FBM KLCI hit its intra-week low of 1,518.35 on Wednesday last week, staging a re-test of this column's envisaged support zone (1,484 to 1,518 levels).

Subsequent technical rebound sent the benchmark FBM KLCI to its intra-week high of 1,527.57 on Wednesday, moving closer to this column's envisaged resistance zone (1,527 to 1,560 levels).

A quick review of the performances of the FBM KLCI's 30 components. Its losers outpaced its gainers by 15 to 14.

CIMB, Armada, MMC Corp and UMW's week-on-week losses of 3.66 per cent, 3.15 per cent, 1.81 per cent and 1.55 per cent, respectively, accounted for the bulk of the FBM KLCI's week-on-week loss of 1.76 points, or 0.12 per cent.

KLK remained as the week's top performing component of the FBM KLCI with a year-to-date gain of RM3.20, or 14.10 per cent.

The FBM KLCI's weekly chart had since stayed below the resistance of its immediate overhead resistance (See FBM KLCI's weekly chart A1:A2) during the week.

It continued to trend below within the confines of its intermediate-term channel (A1:A2 and A3:A4).

Chartwise, the FTSE Bursa Malaysia Kuala Lumpur Composite Index's daily price chart continue to stay decisively above its immediate downside support (See FBM KLCI's daily chart B5:B6) yesterday.

The FBM KLCI's daily and monthly fast MACDs (moving average convergence divergence) stayed below their respective slow MACDs yesterday. Meanwhile, its weekly fast MACD stayed well above its weekly slow MACD.

The FBM KLCI's 14-day RSI stayed at 58.06 per cent level yesterday. Its 14-week and 14-month RSI stayed at 56.23 and 59.20 levels, respectively.

In the meantime, the FBM KLCI continued to stay above the support of its 10-, 20-, 30- 50-, 100- and 200-day moving averages, signalling the continuation of its recent consolidation trend. With that, the FBM KLCI may continue to consolidate further.

Lower liners on the Main Market as well as the FTSE Bursa Malaysia ACE Market sector will continue to remain in upbeat mood.

Overall market sentiment on the broader front will remain firm with intermittent rebounds. On that note, the benchmark FBM KLCI will continue to stay firmly above its downside support of 1,500.

Next week, the FBM KLCI's envisaged resistance zone is at the 1,525 to 1,559 levels while its immediate downside support is at the 1,483 to 1,517 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.