Weekly Recap

The Dow trended sideways within a thin range last week with Wall Street extending mild gains - led by small caps shares, while upsides were capped by lower crude oil prices. The Dow rose marginally by 7.84 pts to 17,817.90 pts on Monday and ended little changed at 17,814.94 pts (-2.96 pts) on Tuesday. The key index continues to gain momentum ahead of the Thanksgiving holiday on Thursday – the Dow advanced 12.81 pts to 17,827.75 pts on Wednesday. However, most shares traded lower as crude oil prices extended their downward pressure to below the US$70 mark following OPEC’s decision to keep production rate unchanged. Gains on the Dow were limited at 17,828.24 pts (+0.49 pts) on Friday. For the week, the Dow managed to rise 18.18 pts.

Share prices on the Bursa Malaysia gained momentum at the start of the week led by telco and plantations heavyweights; the FBM KLCI soared 24.64 pts to 1,833.77 pts on Monday and advanced further to 1,838.56 pts (+4.79 pts) and 1,842.17 pts (+3.61 pts) over the next two trading days respectively on the back of follow-through buying interest activities. However, soon after crude oil prices plunged below the US$70 mark, O&G heavyweights like SapuraKencana (-10.0% W.o.W) and Petronas Dagangan (-7.8% W.o.W) took a beating and the FBM KLCI ended lower at 1,829.91 pts (-12.26 pts) on Thursday. Extended downward pressure were noted on the FBM KLCI as the key index gapped down to 1,820.89 pts (-9.02 pts) on Friday. Nevertheless, on a W.o.W basis, the FBM KLCI added 11.76 pts.

FBM KLCI Weekly Technical Readings

The weekly MACD Histogram has turned green, but the weekly RSI is below 50.

Meanwhile, the daily MACD Histogram has turned red. Also, the daily RSI has tripped below 50.  

FBM KLCI Support & Resistance

The FBM KLCI has rebounded towards the 1,840 level at the start of the week, but selling pressure emerged and the key index rejected the 1,840 level. With both the daily indicators suggesting that the negative momentum is picking up, the FBM KLCI may consolidate towards the 1,800 level - further support will be located around the 1,770 level. Meanwhile, the resistance is envisaged around the 1,840-1,860 levels.

Moving Forward

Wall Street may be due for a pullback after a lacklustre performance last week as the Dow trended sideways within a thin range between the 17,800-17,900 levels. Also, technical indicators are suggesting that the Dow may pullback over the near-term. Similarly, stocks on Bursa Malaysia may still face further selling pressure as the crude oil price downtrend is still intact. The FBM KLCI may dip below the 1,800 level. However, traders may look for uptrend counters to trade for the time being.

Sector focus

The Construction index has rebounded above the 300 support level. The MACD Histogram has turned green over the past five days, while the RSI is picking up above the 30 level. If the index breaches above the 303.9 level, the index may rally higher towards the 313.5 level. Support will be pegged around the 300 level.

Stocks to focus

ECONBHD – Price has rebounded above the EMA60 level, forming a bullish engulfing bar. The MACD Histogram has turned green, in tandem with the MACD Line. Monitor for a breakout above the RM1.00 level, targeting the RM1.12 level. Support is set around the RM0.95 level.

MITRA – Price continues to surge above the EMA9 level. The MACD Line is trending higher, but the RSI is slightly overbought. Price target will be envisaged around the RM1.20-RM1.30 levels. Support will be set around the RM1.09 level.

Source: M+ Online Research - 1 Dec 2014