Weekly Recap
Wall Street took a mild pause as investors traded cautiously ahead of Janet Yellen’s speech on the U.S. economy and the direction of interest rates - the Dow fell 23.60 pts to 18,116.84 pts on Monday. However, the Dow rose to record levels of 18,209.19 pts (+92.35 pts) and 18,224.57 pts (+15.38 pts) on Tuesday and Wednesday respectively as the Fed commented that it will not increase interest rates until mid-year, coupled with the stronger Markit Flash PMI data at 57. Nevertheless, selling pressure emerged as soon after the revised fourth quarter U.S. GDP was announced, which grew at 2.2% (-2.8% Q.o.Q) and the key index declined 10.1 pts and 81.72 pts to 18,214.42 pts and 18,132.70 pts over the next two trading days respectively. On a W.o.W basis, the Dow lost 7.74 pts.

Meanwhile, share prices on Bursa Malaysia started the week on a positive tone on the back of the recovery in crude oil prices. The
FBM KLCI rose 1.52 pts and 9.29 pts to 1,809.39 pts and 1,818.68 pts on Monday and Tuesday respectively. The FBM KLCI, however, retreated 2.82 pts to 1,815.86 pts on Wednesday as profit taking activities emerged on SapuraKencana (-4.7% W.o.W) and Felda Global (-17.7% W.oW) – the latter after its 4Q2014 net profit plunged 96% Y.o.Y. Nevertheless, the key index rebounded by 5.01 pts and 0.34 pts to 1,820.87 pts and 1,821.21 pts for the next two days respectively as Maybank was in focus for its stronger set of 2014 results. Last week, the FBM KLCI added 13.34 pts.

FBM KLCI Weekly Technical Readings
The weekly MACD indicator trended higher last week, with the weekly MACD Histogram extending another green bar. The weekly RSI has crossed above 50.

Despite the daily MACD Line stayed flattish, the daily MACD Histogram extended another green bar. The daily RSI continues to hover above 50.

FBM KLCI Support & Resistance

Currently, the FBM KLCI is staying above the EMA9 level – indicating that the short term momentum is positive. However, as the daily MACD indicator is trending sideways, the FBM KLCI’s upsides may be capped around the 1,820-1,840 levels. Meanwhile, if the FBM KLCI breaches below the 1,800 level, support will be located around the 1,780 level and followed by the 1,750 level.

Moving Forward

Wall Street has performed strongly in the month of February; the Dow, S&P 500 and Nasdaq rose 5.7%, 5.5% and 7.1% respectively. We think that the buying support should stay firm and could mark new record highs over the near term. Meanwhile, share prices on the FBM KLCI, may see some profit taking activities as the key index is hitting the resistance zone of the 1,820-1,840 levels. Nevertheless, traders may look out for opportunities within Technology counters.

Sector focus

The Technology index breached above 20.0 level and sustaining its uptrend formation above the EMA9 level. The MACD Histogram extended another green bar, but the RSI is overbought. Resistance is pegged around the 20.74 level. Support will be located around the 19.61 level.

Stocks to focus

INARI – Price experienced a breakout above the RM3.00 level with higher-than-average volumes. The MACD Indicator expanded positively above zero, while the RSI is above 50. Price target will be pegged around the RM3.30-RM3.40 levels. Support will be set around the RM2.80 level.

EFORCE – Price has experienced a breakout above the RM0.65 level. The MACD Histogram, however has turned red Nevertheless, the RSI is hovering above 50. Price may rally towards the RM0.74 level after a mild consolidation. Support will be set around the RM0.60.

Source: M+ Online Reseach - 2 Mac 2015