Monday, March 22, 2010

Technical Commentary 03/22/10

FBMKLCI opened flat today at 1295.83 (-0.77). Profit taking was continued all the way and it went down as low as 1292.21 (-4.39) at about 11am. It then started to rebound and went as high as 1297.94 (+1.34) before it closed at 1293.65 (-2.96, -0.23%). The KLCI dropped about 3 points when re-open at 4.50pm. Further analyse found that GENM, AXIATA, BAT and MMCORP were pushed down at 4:50pm. The support level 1292 temporary provide a firm support from now but it is likely to break down if there is no buying volume support.

There are 301 up counters and 364 down counters with the market total traded volume increased by 17.4% to 674.9 mil shares. The market volume still below the 40 days VMA and it is not sufficient to push the market higher.

Today’s FBMKLCI top 5 gainers components are TM, MAYBANK, IOICORP, MAXIS and GENTING, while the top 5 lagging components are GENM, BAT, MMCCORP, AXIATA, and TANJUNG.

FBMKLCI Technical Indicators
The candlestick still below the mid-band with the Bollinger band expanded by 6%, this indicates FBMKLCI getting more bearish biased today.

RSI had dipped below 70 level and further reduced to 54.83. This indicates FBMKLCI still under correction and consolidation stage in short-term.

STC %K dipped below the threshold level (30) at 3.42 and the %D further decreases to 18.77. This indicates FBMKLCI is quite bearish in short term. It also implies the CI components are oversold now and there is chance for it to rebound this week.

MACD still maintains above zero level but it had crossed the trigger line and continues to head south. The histogram had gone beyond ZERO level. This indicates FBMKLCI continues to correct and go sideway.

Summary
The overall market’s volumes still below 40 days VMA and suggest that more investors choose to take profit and go sideline. With the sellers more than the buyers, our market will continue to go sideway or mild correction in short-term. All the indicators above indicate FMBKLCI is sideway and correction.. It also implies the CI components are oversold now and there is chance for it to rebound technically this week. There is no fresh good news to boost the volume at this moment and we believe the correction and consolidation will continue. The nearest possible resistance levels are 1300, BBMB and 1308. The nearest possible support levels are 1292, 1286 and 1280. Please refer to the chart below for more information.