Weekly Recap

Following the strong performance on Wall Street two weeks ago, U.S. equities took a pause and trended lower amid the stronger crude oil prices, coupled with softer U.S. Dollar. The Dow slipped marginally lower by 11.61 pts to 18,116.04 pts on Monday, followed by another drop of 104.90 pts to 18,011.14 pts on Tuesday. Selling interest intensified as selloffs among technology heavyweights like Intel, Apple and Microsoft led the key index lower to 17,718.54 pts (-292.60 pts) on Wednesday. The Dow extended its decline on Thursday, marking a fourth consecutive day of losing streak ahead of the earnings season; the key index declined 40.31 pts to 17,678.23 pts. However, the Dow rebounded to end at 17,712.66 pts (+34.43 pts) on Friday as Janet Yellen expects the Fed to raise interest rates on a gradual manner. On a W.o.W basis, the Dow lost 414.99 pts.

Meanwhile, share prices on Bursa Malaysia started the week on a negative tone and the key index ended lower at 1,795.85 pts (-7.80 pts) on Monday. However, buying interest within the oil and gas heavyweights amid the recovery in crude oil prices boosted the FBM KLCI by 18.19 pts and 5.06 pts to 1,814.04 pts and 1,819.10 pts on Tuesday and Wednesday respectively. Nevertheless, as the FBM KLCI traded near 1,820, profit taking activities emerged and the key index slipped 0.68 pts and 5.05 pts to 1,818.42 pts and 1,813.37 pts over the next two trading days respectively. Last week, the FBM KLCI extended its weekly gains by 9.72 pts.

FBM KLCI Weekly Technical Readings

The weekly MACD Histogram has turned green, but the weekly MACD Line is hovering below zero. Nevertheless, the weekly RSI is hovering above 50.

Meanwhile, the daily MACD Histogram has turned red. The RSI, however, is trending higher above 50.

FBM KLCI Support & Resistance

Despite the FBM KLCI rebounding for the second consecutive week, the key index is still hovering below the downward trendline of 1,820. As both the weekly and daily indicators are mixed; they are suggesting that the FBM KLCI’s upsides might be capped around the 1,820-1,840 levels and is likely to consolidate over the near term. Meanwhile, support will be pegged around the 1,750-1,770 levels.

Moving Forward

U.S. stockmarkets may see further cautious trading environment ahead of the corporate results season. Along with the volatile crude oil environment, the Dow may see profit taking activities below the 17,600 level; next level of support will be located around 17,000. On the local front, meanwhile, the FBM KLCI is highly dependent on the direction of crude oil prices over the near term. The key index may jump above the 1,820 level, if WTI crude oil prices surge above US$54 per barrel.

Sector focus

The Technology index has rebounded off the 20.74 level. The MACD Line is hovering above zero, while the RSI is staying above 50. Monitor for a breakout above the 21.32 level, targeting the 22.72 level. Support will be located around the 20.74 level.

Stocks to focus

ELSOFT – Price has ended above the EMA9 level last Friday. The MACD Histogram has turned green, in tandem with the MACD Line. The RSI is hovering above 50. Price target will be envisaged around the RM2.00 level. Support will be set around the RM1.70 level.

WILLOW – Price trended sideways over the past two weeks around the EMA20 level. The MACD Histogram has turned green, while the RSI rebounded off the 50 level. Monitor for a breakout above the RM0.80 level, targeting the RM0.875 and RM0.95 levels. Support will be located around the RM0.77 level.

Source: M+ Online Research - 30 Mar 2015