Weekly Recap

With WTI crude oil prices traded firmer above US$50 per barrel, the Dow jumped 263.65 pts to 17,976.31 pts at the start of the week - led by selected energy companies like Chevron Corp. and Exxon Mobil Corp. However, traders turned to sellers and could be reducing their exposures in the stockmarket on concerns over earnings growth in the upcoming corporate results season following the strengthening US Dollar and lower crude oil prices; the Dow dived 200.19 pts and 77.94 pts to 17,776.12 pts and 17,698.18 pts on Tuesday and Wednesday respectively. Nevertheless, the Dow managed to rebound 65.06 pts to 17,763.24 pts on Thursday ahead of the March jobs data. On the shortened trading week, the key index rose 50.58 pts.

Meanwhile, the Malaysian stockmarket trended higher over the week amid the stabilising WTI crude oil prices. The FBM KLCI rose 8.46 pts to 1,821.83 level, climbing above the downward trendline on Monday. Tracking the strong overnight performance on Wall Street, the FBM KLCI’s buying momentum extended and gapped-up towards 1,830.78 pts (+8.95 pts) on Tuesday. Mild profit taking activities, however, emerged - the FBM KLCI slipped 4.47 pts to 1,826.31 pts on Wednesday. Nevertheless, the key index ended higher at 1,831.97 pts (+5.66 pts) and 1,834.52 pts (+2.55 pts) on Thursday and Friday respectively as banking heavyweights were focused. Last week, the FBM KLCI soared 21.15 pts.

FBM KLCI Weekly Technical Readings

The weekly MACD Line trended higher towards the zero level. The weekly RSI continues to hover above 50. The daily MACD Histogram has extended another green bar, in tandem with the daily MACD Line’s movement. The RSI, however, is overbought.

FBM KLCI Support & Resistance

The FBM KLCI has crossed above the downward trendline of 1,820 level and stayed above the 1,830 level. With the daily MACD indicator suggesting that the momentum and trend are mildly positive, the FBM KLCI may retest the 1,840 level, followed by the 1,860 resistance level. Meanwhile, if the FBM KLCI violates below the 1,820 level. Further support will be envisaged around the 1,770-1,800 levels.

Moving Forward

Wall Street may trend sideways over the near term as investors are cautious ahead of the corporate results season. Hence, the Dow is likely to extend its rangebound mode over the near term between the 17,600-1,8000 levels. Meanwhile, the FBM KLCI may be trading on a positive note amid the trendline breakout last week, coupled with the stabilising crude oil prices - the key index could be retesting the 1,840 level. Also, Small Caps and FBM ACE market stocks may be in focus.

Sector focus

The Consumer index surged above the 600 psychological level. The MACD has issued a “Buy” signal, but the RSI is overbought. The index may rally towards the 612 level after a mild consolidation. Support will be pegged around the 590 level.

Stocks to focus

COCOLND – Price trended sideways over the past one month after it rebounded off RM1.85. The MACD Histogram has turned green, while the RSI is hovering around 50. Monitor for a breakout above the RM2.00 level, targeting the RM2.20 level. Support will be located around the RM1.85 level.

PWROOT – Price extended its upward formation above the RM1.77 level with high volumes. The MACD Indicator has issued a “Buy” signal and the RSI has crossed above 50. Price target will be envisaged around the RM2.00-RM2.20 levels. Support will be set around the RM1.70 level.

Source: M+ Online Research - 6 Apr 2015