FBMKLCI - Technical Commentary 21/07/10

FBKMKLCI was opened with a gap up at 1340.38 (+2.71) and stays positive for the whole sessions to close at 1341.02 (+3.35, +0.25%). It broke out 1341 resistance level this morning but closed at 1341 due to profit taking in the afternoon. The trading volume is cooling down today and many stocks are due for T+3 and T+4 for the next 1-3 days. We foresee some profit taking tomorrow and Friday on the lower liners as well as the heavy weighted CI components. We need to trade with caution if the volume continues to grow for the next few days and if it mainly contributed by the penny stocks. However when scanned through the top 20 gainers, most of them come from consumer sector like Lonbisc, Hwatai, F&N, GuanChong, Cocolnd, Dlady, Kheesan, OFI, Kawan, Apollo and etc. The construction 'Bluechip" Mudajaya even surged >10% today. I feel something is un-usual in the market, but I guess the local and may be some foreign investment funds are locking in the good fundamental stocks thses 2 days. You may want to look for a stock that have good fundamental with PE less than 10. Winchart GOLD is best choice to use for seaching the counters with any PE ratio your wanted to see.

The overall market’s trend is considered as bullish biased today as there were 442 up counters and 298 down counters with the market total traded volume decreased by 22% to 874 MIL shares. The trading volume is above 40 days VMA today. However the buy rate was dropped from 52% in the morning to 42% in the afternoon session. This means that many stocks had gave back the gain in the morning and some even turned ‘RED’ in the afternoon. We expect rotational play and profit taking process will continue.

Today’s FBMKLCI top 5 gaining components are TANJONG, KLK, RHBCAP, MMCCORP and AMMB. The top 5 lagging components are HLFG, HLBANK, PBBANK, YTLPOWR and MAXIS.

FBMKLCI Technical Indicators
FBMKLCI stays above the Bollinger Middle Band 10 (BMB10). The Bollinger Band 10 (BB10) is contracted another -14%; this means that FBMKLCI is considered as consolidation.

RSI increases to 67.61; this indicates FBMKLCI is bullish biased.

STC %K decreases slightly to 87.69% and the %D increases slightly to 86.54, this indicates FBMKLCI is consolidation with bullish biased.

The MACD hooked up slightly and the histogram seems to start a rounding top soon, at the mean time it indicates FBMKLCI is moving sideway.

Summary

Most the indicators indicate FBMKLCI is moving sideway but bullish biased. The nearest possible resistance levels for FBMKLCI is 1350 whereas the nearest possible supports levels is BMB (10) and 1325 (FR 76.4%). The other indicator; DMI is pending to turn bullish if the yellow ADX line hooks up from the bottom. Please refer to the picture below.