The market's volume not only contributed by 2nd and 3rd liners but also part of the CI components. This implies the institutional and the retail investors are actively involved in the market. FBMKLCI 30 components still considered as consolidation with bullish biased. However, the overall market is very bullish. Today, gainers mainly come from Industrial Products (i.e. Steel and glove/rubber themes.) Technology sectors (MPI, Unisem, AIC…etc) and other sectors like construction and properties started to move.
There are 575 up counters and 230 down counters. The RSI flat at 80.62, the STC %K hooked up again closed at 85.68 and %D flat at 80.69. The MACD stays flat with histogram line formed rounding top in 4th day. The Bollinger band further reduces to 2% indicates that the market will exit the consolidation stage soon. In fact, the KLCI tested the Bollinger middle band support at 1286 yesterday, and re-bounced during the last 30 minutes before market closed. Today the CI opened with slightly gap up and stay “green” until the closing. KLCI nearest resistance level is at 1300. The support level is standing at 1288 (the Bollinger mid-band), which is also the break out point on 05/01/10.
Although KLCI 30 components are consolidating but the non-KLCI stocks are pushing up rotationally. Thus, the overall market is still bullish biased with daily trading volume above VMA. Next themes to watch out are Wimax group (Redtone, Gapacket, GHLsys Mtone), plantation, finance, construction, and property that had consolidated some days already. Please review the KLCI chart on short term and long term.
Over heated sectors
We saw Technology group and Industrial sector are overheated. For the industrial sector, the main over heated counters are come from rubber gloves, Steel just started up and other active counters. Selectively good fundamental counters in the industrial sector will be the next rotational buy. In the Technologyy side, we saw Unisem and MPI were pushing hard today. Most of the technology stocks are overbought and there could be profit taking soon before moving up further.
The sectors that lag behind the Tech stocks and Industrial stocks are:
Trading and services
Construction
Property
Consumer
Plantation
