Weekly Recap

U.S. stockmarkets traded in a lacklustre mode over the final week of 2014 after hitting record levels two weeks ago, amid lower crude oil prices which stayed below the US$55 per barrel mark. The Dow slipped 15.48 pts to 18,038.23 pts on Monday, led by technology shares. With the Consumer Board’s consumer confidence increasing at a weaker-than-expected rate and home prices in twenty U.S. cities rising at a slower pace, the Dow tripped below the 18,000 psychological level - falling 55.16 pts to 17,983.07 pts on Tuesday, followed by another decline of 160 pts to 17,823.07 pts on Wednesday. After the New Year’s Day holiday, the Dow ended almost unchanged at 17,832.99 pts (+9.92 pts) on Friday. The Dow dived 220.72 pts last week.

Meanwhile, share prices on Bursa Malaysia started the week on a positive tone and the FBM KLCI rose 3.97 pts to 1,768.41 pts on Monday. However, the selling pressure soon emerged among selected plantation and banking heavyweights; namely FGV (-1.4% W.o.W) and Public Bank (-1.3% W.o.W) that sent the FBM KLCI slipping 1.58 pts and 5.58 pts to 1,766.83 pts and 1,761.25 pts over the next two trading days respectively. Following the New Year day holiday, the FBM KLCI resumed trading and ended the first session lower by 8.48 pts to 1,752.77 pts. Overall, the FBM KLCI dropped 11.67 pts last week, while for 2014, the FBM KLCI declined 5.7% Y.o.Y, mainly attributed to lower crude oil prices.

FBM KLCI Weekly Technical Readings

The weekly MACD Histogram has extended another green bar, despite the weekly MACD Line remaining below zero. The RSI, however, is below 50.

Meanwhile, the daily MACD Histogram extended another red bar, in tandem with the MACD Line which is below zero. The RSI, however, has crossed above 50.

FBM KLCI Support & Resistance

As the FBM KLCI continues to stay below the 1,770 level, the trend is likely to stay weak over the near term. Also, both the daily indicators are still suggesting that the momentum is negative. The FBM KLCI may pullback and consolidate around the 1,700-1,730 levels. Meanwhile, if the FBM KLCI manages to surge above the 1,770 level, the resistance will be envisaged around the 1,800 level.

Moving Forward

The general market sentiment on the Wall Street is slightly weaker as the Dow faced renewed selling pressure around the 18,000 psychological level and the key index may pullback further towards the 17,000 level. Similarly for the FBM KLCI, the downward pressure may still persist on the back of the weakening Ringgit and lower crude oil prices. However, traders may still look for opportunities on rebounding stocks (Price > EMA9) and uptrend intact counters (EMA 9 > EMA20).

Sector focus

The Technology index trended sideways, but is hovering above the EMA9 level. The MACD Histogram has extended another green bar. Monitor for a breakout above the 16.83 level, targeting the 17.91-18.4 levels. Support will be located around the 16.41 level.

Stocks to focus

JCY – Price has ended above the EMA60 and the MACD Line has crossed above the zero level – indicating that the trend is turning up. Monitor for a breakout above the RM0.565 level, targeting the RM0.595-RM0.71 levels. Support will be located around the RM0.52 level.

GHLSYS – Price trended sideways over the past two weeks above the EMA9 level. The RSI is hovering above 50. Monitor for a breakout above the RM0.735 level, targeting the RM0.81 level. Support will be pegged around the RM0.71 level.

Source: M+ Online Research - 5 Jan 2015