Market sentiment remains concrete
Monday, January 17, 2011
REVIEW: Shares on Bursa Malaysia started the second week of the new year on a steadier note, with the FBM Kuala Lumpur Composite Index (FBM KLCI) advancing 2.43 points to 1,574.64.
However, the positive momentum was short-lived, as a lack of fresh leads from abroad prompted investors to sell into strength after the recent strong rally and, soon, the local bourse tripped into correction.
Apparently, overnight US stocks sagged 22.55 points to 11,674.76 the previous Friday, as a court ruling in a key foreclosure case combined with disappointing jobs report triggered a bout of liquidation.
Over on the New York Mercantile Exchange, world crude oil futures fell 35 cents to US$88.03 a barrel, tracking the declines in equities.
Elsewhere, frail key regional exchanges prompted institutional players to stay on the sidelines, adopting a “wait-and-see” attitude.
Tracking the dismal global trend, the key index drifted lower in lacklustre trade amid losses in quality stocks to settle down 8.69 points to 1,563.52 on Monday.
Wall Street suffered another fall in overnight session, but a push in late trade on optimism for a solid corporate earnings season helped equities to bounce off lows and settle slightly easier.
Unlike stocks, crude oil reversed trend, spiking a huge US$1.22 a barrel to US$89.25 on worries about shortage after the Trans Alaska crude pipeline was shut following a leak but Asian stocks had a muted response as renewed worries about European fiscal problems and Portugal needing a bailout dampened sentiment.
In the wake of uncertainty in the euro-zone, blue chips extended the correction process, but in stark contrast, second and lower liners attracted significant interest on greater retail participation, betting on immediate gains ahead of the Lunar New Year.
And that somewhat helped cushion the downside. At the end of Tuesday's session, the key index only shed a small 0.58 of a point to 1.562.94 in mixed mode, with winners and losers almost equal.
After a short breather, market sentiment changed for the better on bargain-hunting interest, spurred by an announcement by the Government on the 19 Entry Point Projects valued at RM67bil under the Economic Transformation Programme.
Other factors, such as Wall Street's snapping the three-day losing streak, another rally in crude oil prices and the steadier regional markets also aided the local bourse.
The FBM KLCI posted a minor gain of 3.55 points to 1,566.49 as the local boys were reluctant to chase stocks, simply because Bursa Malaysia was still in consolidation mode in mid-week.
Thereafter, Bursa Malaysia notched up an extra 5.07 points to 1.571.56 amid follow-through interest on Thursday before reverting to correction mode from profit-taking activity, with the key index shedding 1.67 points to 1,569.89 yesterday, undermined by overseas weakness.
Statistics: For the week, the principal index eased 2.32 points, or 0.1% to 1,569.89 yesterday, versus 1.572.21 on Jan 7.
Weekly turnover stood at 12.254 billion units worth RM13,678bil, against 10.707 billion shares valued at RM15.261bil traded previously.
Technical indicators: After pulling back from the top to the 56% level in mid-week, the oscillator per cent K drifted sideways-to-marginally higher before climbing over the oscillator per cent D of the daily slow-stochastic momentum index to trigger a weak buy signal yesterday.
Throughout the week, the 14-day relative strength index was trapped between the 86-point and 73-point band.
Meanwhile, the daily moving average convergence/divergence (MACD) histogram retained the buy, trending above the daily signal line.
Elsewhere, weekly indicators continued to improve, with the weekly slow-stochastic momentum index firming and the weekly MACD issuing a buy call.
Outlook: Bursa Malaysia was range-bound the past week, with the key index fluctuating within a moderate band, undergoing correction after peaking out temporarily at an all-time high of 1,576.95 on Jan 6, as investors took the excuse of the indecisive offshore performance and overbought reason to book profits. Other contributing factor was the uncertainty in the Euro zone.
Based on the daily bar chart, the ongoing correction process so far was healthy and even though the bulls had paused for air, trading volumes remained brisk. This may indicate that the underlying tone of the market still is solid and under such condition, the bulls usually will resume their rally, once the overbought position is fully neutralised. Perhaps, investors can consider accumulating more.
Technically, indicators are positive, suggesting an uptrend continuation may come about soon.
A successful clearance of the recent peak is likely to see the key index testing the 1,600-point psychological level. The next upper resistance can be expected at the 1,620-1,630 points, followed by the 1,650 points.
Support floors are expected at the 14-day simple moving average (SMA) of 1,550 points, 21-day SMA of 1,535 points and the 50-day SMA of 1,517.
source: thestar
However, the positive momentum was short-lived, as a lack of fresh leads from abroad prompted investors to sell into strength after the recent strong rally and, soon, the local bourse tripped into correction.
Apparently, overnight US stocks sagged 22.55 points to 11,674.76 the previous Friday, as a court ruling in a key foreclosure case combined with disappointing jobs report triggered a bout of liquidation.
Over on the New York Mercantile Exchange, world crude oil futures fell 35 cents to US$88.03 a barrel, tracking the declines in equities.
Elsewhere, frail key regional exchanges prompted institutional players to stay on the sidelines, adopting a “wait-and-see” attitude.
Tracking the dismal global trend, the key index drifted lower in lacklustre trade amid losses in quality stocks to settle down 8.69 points to 1,563.52 on Monday.
Wall Street suffered another fall in overnight session, but a push in late trade on optimism for a solid corporate earnings season helped equities to bounce off lows and settle slightly easier.
Unlike stocks, crude oil reversed trend, spiking a huge US$1.22 a barrel to US$89.25 on worries about shortage after the Trans Alaska crude pipeline was shut following a leak but Asian stocks had a muted response as renewed worries about European fiscal problems and Portugal needing a bailout dampened sentiment.
In the wake of uncertainty in the euro-zone, blue chips extended the correction process, but in stark contrast, second and lower liners attracted significant interest on greater retail participation, betting on immediate gains ahead of the Lunar New Year.
And that somewhat helped cushion the downside. At the end of Tuesday's session, the key index only shed a small 0.58 of a point to 1.562.94 in mixed mode, with winners and losers almost equal.
After a short breather, market sentiment changed for the better on bargain-hunting interest, spurred by an announcement by the Government on the 19 Entry Point Projects valued at RM67bil under the Economic Transformation Programme.
Other factors, such as Wall Street's snapping the three-day losing streak, another rally in crude oil prices and the steadier regional markets also aided the local bourse.
The FBM KLCI posted a minor gain of 3.55 points to 1,566.49 as the local boys were reluctant to chase stocks, simply because Bursa Malaysia was still in consolidation mode in mid-week.
Thereafter, Bursa Malaysia notched up an extra 5.07 points to 1.571.56 amid follow-through interest on Thursday before reverting to correction mode from profit-taking activity, with the key index shedding 1.67 points to 1,569.89 yesterday, undermined by overseas weakness.
Statistics: For the week, the principal index eased 2.32 points, or 0.1% to 1,569.89 yesterday, versus 1.572.21 on Jan 7.
Weekly turnover stood at 12.254 billion units worth RM13,678bil, against 10.707 billion shares valued at RM15.261bil traded previously.
Technical indicators: After pulling back from the top to the 56% level in mid-week, the oscillator per cent K drifted sideways-to-marginally higher before climbing over the oscillator per cent D of the daily slow-stochastic momentum index to trigger a weak buy signal yesterday.
Throughout the week, the 14-day relative strength index was trapped between the 86-point and 73-point band.
Meanwhile, the daily moving average convergence/divergence (MACD) histogram retained the buy, trending above the daily signal line.
Elsewhere, weekly indicators continued to improve, with the weekly slow-stochastic momentum index firming and the weekly MACD issuing a buy call.
Outlook: Bursa Malaysia was range-bound the past week, with the key index fluctuating within a moderate band, undergoing correction after peaking out temporarily at an all-time high of 1,576.95 on Jan 6, as investors took the excuse of the indecisive offshore performance and overbought reason to book profits. Other contributing factor was the uncertainty in the Euro zone.
Based on the daily bar chart, the ongoing correction process so far was healthy and even though the bulls had paused for air, trading volumes remained brisk. This may indicate that the underlying tone of the market still is solid and under such condition, the bulls usually will resume their rally, once the overbought position is fully neutralised. Perhaps, investors can consider accumulating more.
Technically, indicators are positive, suggesting an uptrend continuation may come about soon.
A successful clearance of the recent peak is likely to see the key index testing the 1,600-point psychological level. The next upper resistance can be expected at the 1,620-1,630 points, followed by the 1,650 points.
Support floors are expected at the 14-day simple moving average (SMA) of 1,550 points, 21-day SMA of 1,535 points and the 50-day SMA of 1,517.
source: thestar
0 comments:
Post a Comment