Weekly Recap

U.S. stockmarkets traded on a negative tone at the start of the week as traders were slightly cautious ahead of the start of the corporate earnings reporting season – the Dow fell 80.61 pts to 17,977.04 pts on Monday. However, as the WTI crude oil price crossed above the US$54 level, buying support picked up among energy shares like Chevron and Exxon Mobil, helping the Dow to add 59.66 pts and 75.91 pts to 18,036.70 pts and 18,112.61 pts on Tuesday and Wednesday respectively. Nevertheless, after a mixed trading session on Thursday, which the key index slipped marginally by 6.84 pts to 18,105.77 pts, the key index plunged 279.47 pts to 17,826.30 pts on Friday as China lifted restrictions on short-selling and Greece’s loan repayment concerns resurfaced. On a W.o.W basis, the Dow decreased 231.35 pts.

Meanwhile, share prices on Bursa Malaysia were relatively stagnant as index heavyweights trended sideways, while the trading focus was on lower liners and small caps. The FBM KLCI started the week on a mild correction and ended at 1,842.08 pts (-2.23 pts) and 1,839.61 pts (-2.47 pts) on Monday and Tuesday respectively. However, as crude oil prices recovered further above the significant resistance of the US$54 level, the FBM KLCI surged higher by 0.52 pts and 7.81 pts to 1,840.13 pts and 1,847.94 pts over the next two trading days respectively led by SapuraKencana (+16.2% W.o.W) and Petronas Chemical (+2.1 % W.o.W). Overall for the week, the FBM KLCI added 1.55 pts.

FBM KLCI Weekly Technical Readings

The weekly MACD Line continues to rise further above the zero level and the weekly MACD Histogram extended another green bar. The weekly RSI, however, has crossed above 70.

Meanwhile, the daily MACD Line has crossed below the daily Signal Line. The RSI has tripped below 70.

FBM KLCI Support & Resistance

The FBM KLCI has rebounded off the 1,836 level last week after a mild selling pressure that left the key index below 1,840. However, the daily indicator is suggesting that the momentum could be weakening over the near term. The FBM KLCI’s upside might be capped around the 1,860 level. Meanwhile, if the key index falls below the 1,840 level, the supports will be located around the 1,800-1,820 level.

Moving Forward

Wall Street is likely to consolidate on a downtrend over the near term as the Dow has tripped below the 18,000 psychological level. Also, traders might focus on Greece’s debt issues and profit taking activities may pick-up. Similarly, the FBM KLCI is expected to consolidate around the 1,820-1,840 levels in view of the lack of fresh market catalyst. However, traders or investors may focus on up-trending and momentum counters under the construction sector over the near term.

Sector focus

The Construction index extended its rally above the 305 level. The MACD Indicator trended higher, but the RSI is overbought. The index may rally towards the 313 level after a short consolidation. Support will be pegged around the 300 level.

Stocks to focus

ECONBHD – Price experienced a breakout above the RM1.06 level with improved volumes. The MACD Histogram extended another green bar, while the RSI is hovering above 50. Price may continue its uptrend towards the price target of RM1.21 level. Support will be set around the RM1.00 level

AZRB – Price experienced a strong consolidation breakout above the RM0.71 level with high volumes. The MACD Indicator has issued a “Buy” signal. The RSI, however, is slightly overbought. Price may rally towards the RM0.83 level after a mild correction. Support will be anchored around the RM0.70 level.

Source: M+ Online Research - 20 Apr 2015