Weekly Recap

Following the weaker-than-expected March jobs data two weeks ago, expectations that an interest rate hike might be delayed to the end of third quarter of 2015 has resurfaced, helping the Dow to jump 117.61 pts to 17,880.85 pts on Monday. Soon after a flattish trade on Tuesday, which the Dow ended marginally lower at 17,875.42 pts (-5.43 pts), the uptrend resumed on Wednesday and the key index rebounded 27.09 pts to 17,902.51 pts. Further buying interest was noted among energy shares as crude oil prices rebounded above the US$50 mark; the key index increased 56.22 pts to 17,958.73 pts on Thursday. The Dow continues to rise for a third day to 18,057.65 pts (+98.92 pts) on Friday, ahead of the earnings season. Last week, the Dow soared 294.41 pts.

Meanwhile, share prices on Bursa Malaysia performed positively amid the strong recovery of WTI crude oil prices, hitting the intra-week high of US$54.13. The FBM KLCI rose 8.42 pts to 1,842.94 pts on Monday, followed by another jump of 13.57 pts to 1,856.51 pts on Tuesday - led by Petronas Chemical (+1.4% W.o.W) and Petronas Dagangan (+4.0% W.o.W). However, as profit taking activities emerged among the banking heavyweights like CIMB (-1.1% W.o.W) and Maybank (-0.8% W.o.W), the FBM KLCI ended lower at 1,850.31 pts (-6.20 pts), 1,849.39 pts (-0.92 pts) and 1,844.31 pts (-5.08 pts) over the next trading days respectively. Nevertheless, on a W.o.W basis, the FBM KLCI added 9.79 pts.

FBM KLCI Weekly Technical Readings

The weekly MACD Line is above zero, in tandem with the MACD Histogram. Also, the weekly RSI is above 50.

Although the daily MACD Line is hovering above the zero, the daily MACD Histogram extended another red bar. The daily RSI is overbought.

FBM KLCI Support & Resistance

Following the breakout of the FBM KLCI above the 1,840 level, the FBM KLCI corrected mildly back to the support of 1,840. However, with the indicators suggesting that the momentum is still positive, the key index is likely to stay above 1,840 and retest the 1,860-1,870 levels over the near term. However, if the key index falls below 1,840, further support will be set around 1,800-1,820 levels.

Moving Forward

As the Dow has crossed above the 18,000 psychological level, the overall market sentiments could be turning slightly positive for the time being. Further buying support should be seen on energy shares with an anticipation of the recovery in crude oil prices. Similarly, share prices on Bursa Malaysia will be on a positive trend after the breakout of the 1,840 level last week. Also, traders or investors may be on lookout for opportunities within construction small caps stocks and ACE market shares.

Sector focus

The Construction index experienced a breakout above 298. The MACD Indicator has expanded positively above zero, but the RSI is overbought. The index may rally towards the 312 level after a short consolidation. Support will be located around the 293 level.

Stocks to focus

OKA – Price surged above the RM1.00 psychological last week with high volumes. The MACD indicator has issued a “Buy” signal. The RSI, however, is slightly overbought. Monitor for a breakout above RM1.07, targeting the RM1.30 levels. Support will be pegged around RM0.95.

HOHUP – Price experienced a breakout above RM1.45 level with improved volumes. The weekly MACD Histogram extended another green bar and the weekly RSI is above 50. Price target will be envisaged around RM1.56-RM1.72. Support is set around RM1.32.

Source: M+ Online Research - 13 Apr 2015