Weekly Recap

Wall Street traded negatively at the start of the week as the selling pressure continues after the Dow tripped below 18,000 two weeks ago; the Dow declined 82.91 pts and 2.51 pts to 17,766.55 pts and 17,764.04 pts on Monday and Tuesday respectively amid the ongoing Greece debt concerns. The key index, however, rebounded strongly led by financial and technology shares on progress over the Greece debt talks – the Dow rocketed to end at 18,000.40 pts (+236.36 pts) on Wednesday, followed by another increase of 38.97 pts to 18,039.37 pts on Thursday. Nevertheless, the Dow succumbed to profit taking activities and plunged 140.53 pts to 17,898.84 pts on Friday led by energy shares. Overall last week, the Dow trended flattish with mild gains of 49.38 pts.

Meanwhile, share prices on Bursa Malaysia traded on a lacklustre mode over the week as market sentiments were negative amid the weakening Ringgit. The FBM KLCI started the week on a negative tone, sliding 5.88 pts and 10.40 pts to 1,739.45 pts and 1,729.05 pts on Monday and Tuesday respectively. However, buying interest emerged that boosted the key index by 6.58 pts to 1,735.63 pts on some mild bargain hunting among oil and gas index heavyweights. Nevertheless, the selling pressure resumed as foreign funds continue to reduce their exposure in the stockmarket and the FBM KLCI ended marginally lower at 1,734.76 pts (-0.87 pts) and 1,734.37 pts (-0.39 pts) over the next two trading days respectively. On a W.o.W basis, the FBM KLCI lost 10.96 pts.

FBM KLCI Weekly Technical Readings

The weekly MACD Indicator has expanded negatively last week. The weekly RSI is hovering below 50. Meanwhile, the daily MACD Line is flattish, while the daily MACD Histogram has extended another green bar. The daily RSI is oversold. 

FBM KLCI Support & Resistance
The FBM KLCI trended sideways throughout the week around the support of the 1,730 level and retested the EMA9 (~1,740) level. With both the daily MACD and RSI indicators turning slightly positive, the key index may be due for a technical rebound. If the 1,740 level is breached, the next resistance will be located around the 1,770 level. Meanwhile, the support will be located around the 1,700 level.

Moving Forward
U.S stockmarkets may trend negatively as the Dow is trading below the 18,000 level, while traders are still expressing concerns over the Greek issues for the time being. Near term support for the Dow will be set around the 17,600 level. Meanwhile, share prices on Bursa Malaysia are likely to trend sideways with a negative bias as the FBM KLCI is hovering below the EMA9. Nevertheless, traders may trade on shares that are still showing uptrend intact patterns - EMA9 > EMA20 > EMA60 > EMA120.

Sector focus

The Construction index has trended sideways over the past week, The MACD Line is flattish, while the MACD Histogram extended another green bar. The RSI has crossed above 30. Resistance will be envisaged around the 300.77 level. Support will be set around the 289.68 level.

Stocks to focus

SENDAI – Price has surged above the RM0.82 level with high volumes. The MACD Indicator has expanded positively above zero, but the RSI is overbought. Price may rally towards RM1.00 after a short consolidation. Support will be set around the RM0.78 level.

ECONBHD – Price trended sideways around the EMA20 level. The MACD Histogram has turned green and the RSI is trending higher above 50. Price target will be located around the RM1.21 level. Support will be anchored around the RM1.07 level.

Source: M+ Online Research - 15 Jun 2015