Weekly Recap

U.S. equities trended higher on the back of the revision of the U.S. third quarter GDP from 3.9% to 5.0% and the better-than-expected jobless claims data released last week, which fell 9,000 to 280,000 for the week ended 20th December. Also, with the Christmas holiday mood, the Dow rose 154.64 pts and 64.73 pts to 17,959.44 pts and 18,024.17 pts on Monday and Tuesday respectively. Despite crude oil prices continue to stay weak and traded below the US$60 level, the Dow managed to extend its record closing for the following two trading days; the Dow gained marginally by 6.04 pts and 23.50 pts to 18,030.21 pts and 18,053.71 pts on Wednesday and Friday respectively. On a W.o.W basis, the key index advanced 248.91 pts.

Meanwhile, share prices on Bursa Malaysia headed higher after finding support around the 1,670 level two weeks ago. The FBM KLCI gained momentum above the EMA9 level and ended at 1,744.05 pts (+28.06

 on Monday, led by selected banking heavyweights like Maybank (+4.3% W.o.W) and Public Bank (+5.2% W.o.W). Tracking the overnight performance on Wall Street, follow-through buying interest sent the FBM KLCI higher by 5.00 pts to 1,749.05 pts on Tuesday, followed by another 0.69 pts to 1,749.74 pts on Wednesday ahead of the Christmas break. Despite mild profit taking activities emerging on Friday, the trading session ended in the positive region; the key index surged 14.70 pts to 1,764.44 pts. Last week, the FBM KLCI added 48.45 pts.

FBM KLCI Weekly Technical Readings

The weekly MACD Histogram has turned green, while the weekly MACD Line trended sideways. The RSI has crossed above 30.

Meanwhile, the daily MACD Histogram advanced positively above zero. Also, the daily RSI has crossed above 50.

FBM KLCI Support & Resistance

The FBM KLCI has crossed above the EMA9 level and both the MACD and RSI indicators are suggesting that the momentum is positive; the window dressing rally may revisit the resistance zone between the 1,770-1,800 levels. However, if the FBM KLCI falls below the 1,730 level, support will be pegged around the 1,700-1,720 levels.

Moving Forward

On the back of the stronger U.S. economic data which was reported last week, the Dow may trade higher as it is hovering above the 18,000 psychological level. Similarly, window dressing activities on the local front is likely to persist as crude oil price is still hovering around the US$55 per barrel mark. However, volatility may pick up if crude oil price violates below US$50 level. Nevertheless, uptrend intact momentum counters will still favoured for short term trading positions.

Sector focus

The FBM ACE index has trended sideways last week, after a strong rebound two weeks ago. With the MACD indicator issuing a “Buy” signal, the FBM ACE may regain momentum towards the psychological level of 6,000. Support will be set around the 5,534 level.

Stocks to focus

SUNZEN – Price has experienced a breakout above the RM0.39 level with improved volumes. The MACD Line has crossed above zero. Price target will be envisaged around the RM0.475 level. Support will be located around the RM0.32 level.

JFTECH – Price has surged above RM0.58 level accompanied by high volumes. As the RSI is sustaining its movement above 50, price may continue its upward momentum towards the RM0.735-RM0.85 levels. Support will be pegged around the RM0.53 level.

Source: M+ Online Research - 29 Dec 2014