Technical Commentary on FBMKLCI 08/06/10

DJI dipped another –115 points however most of the Asian bourses and FBMKLCI were traded sideway. FBMKLCI opened flat at 1285.78 (-1.09) and then it traded sideway until closing at 1288.18 (+1.91, +0.15%).

The overall market’s trend is considers as sideway today as there are 349 up counters and 271 down counters with the market total traded volume increased by 5.9 % to 521 MIL shares. The market’s volume is below 40 days volume moving average and many investors still remain sideline.

Today’s FBMKLCI top 5 gainers components are MMCCORP, GENTING, HLFG, MAYBANK and RHBCAP. The top 5 lagging components are BAT, KLK, MISC, BJTOTO and PPB.

FBMKLCI Technical Indicators
The INDEX stays above the Mid-Band with the Bollinger band expanded 1%; this indicates FBMKLCI still considers as consolation.

RSI went sideway to 35.5; this indicates FBMKLCI is considers as consolation.

STC %K hooks up to 82.24 and the %D increased to 82.77, this indicates FBMKLCI is bullish biased.

The MACD line slightly hooks up and crosses the trigger line but it stays below the ZERO level. This indicates FBMKLCI is slightly bullish.

Summary

Most of the indicators indicate FBMKLCI still under consolidation above the BBMB. FBMKLCI had broken out 1287 today but EMA14 continues to provide a resistance for FBMKLCI at about 1290. The nearest possible resistance levels for FBMKLCI are EMA14 (1290), 1296 and 1309. The nearest possible support levels are 1284, BBMB, 1269. Please click on the chart below for better understanding.

Technical Commentary 07/06/10

Due to US’s job data disappointment and Euro debt concerns, DJI plunged -323 points and closed below 10,000 levels on last Friday. Asian market typically plunged from the range of -1.5% to -3.8% today except FBMKLCI was not affected much. It opened with a gap down of -9.88 points at 1284.51 and it went as low as 1278.89 (-15.5) before it recover to lose only -8.12 points at 1286.87 (-0.63%).

The overall market’s trend is considers as bearish biased today as there are 151 up counters and 463 down counters with the market total traded volume decreased by 27 % to 492 MIL shares. This means that the market’s volume is far below 40 days volume moving average and many investors are sideline today.

Today’s FBMKLCI top 3 gainers components (only 3 gainers today) are BJTOTO, MMCCORP and IOICORP. The top 5 lagging components are GENTING, YTL, MISC, HLFG and HLBANK.

FBMKLCI Technical Indicators
The INDEX stays above the Mid-Band with the Bollinger band contracted another -11%; this indicates FBMKLCI is considers as consolation and not fall in the down- trend yet.

RSI went sideway to 33.63; this indicates FBMKLCI is considers as consolation.

STC %K hooks down to 78.7 and the %D increased slightly to 68.03, this indicates FBMKLCI is weakening but still stays above 70.

The MACD line went sideway and crosses the trigger line but it stays below the ZERO level. This indicates FBMKLCI is considers as consolation.

Summary
Most of the indicators indicate FBMKLCI still under consolidation above the BBMB. It broke below the EMA14 and 1287 support level with very a low trading volume today. The short term view of FBMKLCI is considers as consolidation. Today it was resisted by the EMA14 and the descending trend line but supported by the BBMB.

The nearest possible resistance levels for FBMKLCI are 1287, EMA14 and 1320. The nearest possible support levels are 1272, BBMB, 1254. Please click on the chart below for better understanding.

The Weekly Outlook of SP500, FTSE, NIKKIE, STI

What FEARS Drive the Markets Bearish

Fears, Fears, Fears

The latest's fear is on 4-Jun-2010, Hungarian, in Euro-zone, warns of the similar scenario of Greece's sovereign-debt, another possible default.

• Hungary's new government added to sovereign-debt fears in EU, shaking global financial markets after a spokesman for Prime Minister Viktor Orban was quoted as warning that the economy had been left in a "grave situation" and that talk of a default wasn't "an exaggeration."
• This fear may drive the European share markets for another dip;
• Definitely, the US market cannot escape from such fear too; on top of that, the unemployment status is not favorable to the market because most of the nonfarm employment in May mostly are temporary employment and private-sector hiring is still very weak;
  

After April 2010, the eruption of Greece sovereign-debt crisis is making investor fear of next round of US Subprime crisis.

• In currency or money market point of view, that may lead weakening of Euro currency. Investors are selling Euro and switch toward a more favorable (perhaps the next better off) green back USD;
• In funds situation, investors are liquidating out from equity funds that in turn make the fund managers sell off more shares to fill the withdrawal in equity funds. And the equity funds may have switched to bond funds for shelter;
• In equity market, after the V-shape recovery from last Mar-2009 until this April-2010, the fear of slumping in equity making investors liquidate from equity and divert into bonds for shelter too;
• Investors mostly only know what they've seen in the past 25 years, which for the most part has been a period of steadily declining treasury interest rates and rising bond prices. The fears of further losses encouraging investors divert into perceive to be safer fixed income, bonds. That in turn inflated the bond prices by investors pouring cash in at record rates;
  

The next possible fear is:

• What happen when the treasury interest rates are likely to increase down the road?
• With that low treasury rate for a country, by maturity of bonds, how the country is going to overcome the bonds' returns for investors which is currently higher than treasury rate compounding with inflation? That may lead to the next possible fear of snow balling effect of bonds or bubble burst of bonds in baking now;
• Bond prices are closely related to treasury rate of countries. Many countries are keeping their treasury rate low to fight against economy. The lower treasury rate favorable to bonds. That's why piles of cash are pouring into bond funds in turn forcing fund managers to acquire low-rate securities;
• However, when treasury rates move higher and the value of their bond holdings slides, in reciprocating effect, many fund investors are likely to head for the exits -- further baking in losses as managers are forced to sell to meet redemptions;
• Interest-rate hikes may be many months away, but at that point bond-fund managers could have trouble as demand for lower-yielding securities becomes scarce and prices fall.
  

Short commentary on FKLI

FKLI was having a strong rebound on last Friday 27/5/10. It broke out the 200 days MA long-term resistance and closed at 1279 (up 26 points). However it was resisted by the Bollinger Mid-Band (BBMB) on Monday (31/5) until wed (2/6). It broke the BBMB on Thursday to close at 1300 (+20.5), but the volume is lower. It was resisted by 1302 on Thursday. On Friday 4/6, it was traded in a very narrow range, in other word it was traded sideway. It was resisted by the major resistance level at 1302. That means 1302 will provide a strong resistance for FKLI. If it can breaks out 1302 and stay above this level, it will be strengthen and possible it will hit the next level of resistance at 1321. On the other hand, if it cannot break out 1302, very likely it will turn south to retest the major support levels at 1286, 1270 (=200 days MA) and 1250. You may short the futures if it cannot break through 1302 but place a buy stop at 1304-1307. For safer, you may short if it breaks down the major support levels.

Those interested to learn FKLI, please scroll down to the right hand side bottom now

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Technical Commentary 04/06/10

FBMKLCI traded with caution ahead of the US’s job data tonight. It open negative and traded in sideway to close flat at 1294.39 (-0.05, -0%). The direction of FBMKLCI is unclear as its candlestick closed with a “DOJI” star; it depends very much on external factors at this moment.

The overall market’s trend is considers as mixed today as there are 313 up counters and 275 down counters with the market total traded volume increased slightly by 2.9% to 674 MIL shares. This means that the market’s volume is still below 40 days volume moving average.

Today’s FBMKLCI top 5 gainers components are MISC, BAT, PLUS, HLFG and MAXIS. The top 5 lagging components are BJTOTO, GENM, RHBCAP, PETDAG and IOICORP.

FBMKLCI Technical Indicators
The INDEX stays above the Mid-Band with the Bollinger band contracted only -9%; this indicates FBMKLCI is considers as consolation.

RSI decreases slightly to 33.74; this indicates FBMKLCI is considers as consolation.

STC %K increases to 93.77 and the %D increased to 58.68, this indicates FBMKLCI is bullish biased.

The MACD line went sideway below the ZERO level and the histogram continues with the rounding bottom, this indicates FBMKLCI is slightly bullish biased.

Summary
The indicators for FBMKLCI are mixed today, however the chart indicates the direction of FBMKLCI is unclear. Technically it is considered as sideway.

The nearest possible resistance levels for FBMKLCI are 1302 and 1320. The nearest possible support levels are 1287, BBMB, 1272. Please click on the chart below for better understanding.

Technical Commentary 03/06/10

Due to strong US’s housing data, global market rebounded strongly today. FBMKLCI open with gap up at 1285.54 (+9.52), it continues to break out 1287 resistance level and finally closed at 1294 (+18.42, +1.44%). Although the index rebounded strongly today but the trading volume is not supporting the uptrend. We still need to be caution because it will not sustain without the volume support.

The overall market’s trend is considers as bullish today as there are 542 up counters and 154 down counters with the market total traded volume increased by 11.9% to 655 MIL shares. This means that the market’s volume is still below 40 days volume moving average.

Today’s FBMKLCI top 5 gainers components are GENM, GENTING, CIMB, HLFG and AXIATA. The top 2 lagging components (only 2 losers today) are UMW and TM.

FBMKLCI Technical Indicators
The INDEX stays above the Mid-Band with the Bollinger band contracted another -22%; this indicates FBMKLCI is considers as consolation although it rebounded strongly.

RSI increases slightly to 34.89; this indicates FBMKLCI is not turning bullish yet.

STC %K increases to 77.49 and the %D increased to 48.9, this indicates FBMKLCI is bullish biased.

The MACD line hooks up again after strong rebound (below ZERO level) and the histogram continues with the rounding bottom, this indicates FBMKLCI is bullish biased.

Summary
The indicators for FBMKLCI are mixed today, however the EMA 14/21/31 indicates FBMKLCI still not turn bullish. Technically it still considers as technical rebound. We still need a few more days to confirm its trend.

The nearest possible resistance levels for FBMKLCI are 1302 and 1320. The nearest possible support levels are 1287, BBMB, 1272. Please click on the chart below for better understanding.

Technical Commentary 02/06/10

The World Cup is just around the corner. It is quite obvious that the market is lack of support today. FBMKLCI is traded in a very narrow range until the last 10 minutes it was pushed down -4.73 points to close at 1276.02 (-6.95, -0.54%). FKLI just traded the other way but it considers as sideway and closing positive at 1279.5 (+7, +0.6%).

FBMKLCI still resisted by the Bollinger mid-band at about 1278 at this moment. The overall market’s trend is considers as mixed today as there are 287 up counters and 294 down counters with the market total traded volume decreased by 10% to 585 MIL shares. This means that the market’s volume getting lower and more investors are sideline today.

Today’s FBMKLCI top 3 gainers components (only 3 gainers today) are PETDAG, GENTING and SIME. The top 5 lagging components are GENM, NESTLE, HLFG, PLUS and BJTOTO.

FBMKLCI Technical Indicators
The INDEX still stays below the Mid-Band with the Bollinger band contracted another -14%; this indicates FBMKLCI is consolation just below the Mid-Band.

RSI decreases slightly to 28.32; this indicates FBMKLCI is consolidation.

STC %K decreases slightly to 37.75 and the %D increased to 37.69, this indicates FBMKLCI is moving side way.

The MACD line grows sideway today (below ZERO level) and the histogram may form a rounding top today, this indicates FBMKLCI is moving sideway.

Summary
All the indicators indicate FBMKLCI is consolidation; it faces a strong resistance below the BBMB at 1278 today. Technically it will continue to move sideway rather than up-trend. 1284-1285 could form another lower high for FBMKLCI if it cannot exceed this level in the next few days. This means it will have a chance to retest 200 days MA or lower soon.

The nearest possible resistance levels for FBMKLCI are BBMB, 1284 and 1290.5. The nearest possible support levels are 1272, 1254 and 1224. Please click on the chart below for better understanding.