Weekly Recap

Once again, U.S. stockmarkets started the week on a negative tone as Greece’s debt issue remained in focus and the Dow fell 107.67 pts to 17,791.17 pts on Monday. The Dow, however, was boosted by strong bargain hunting activities following dovish comments by the Fed that they will continue to support the economy, while traders were expecting an interest rates hike in September; the Dow advanced 113.31 pts, 31.26 pts and 180.10 pts to 17,904.48 pts, 17,935.74 pts and 18,115.84 pts over the next three trading days respectively. Nevertheless, the Dow succumbed to profit taking activities and the key index ended lower at 18,015.95 pts (-99.89 pts) on Friday. Overall, the Dow gained 117.11 pts on a weekly basis.

Meanwhile, share prices on Bursa Malaysia headed for a fifth week of negative closing on the back of selected selling activities on oil and gas and utility index heavyweights. The FBM KLCI fell 12.21 pts to 1,722.16 pts on Monday. However, the key index rebounded on bargain hunting activities that sent the FBM KLCI to 1,722.24 pts (+0.08 pts) and 1,726.86 pts (+4.62 pts) on Tuesday and Wednesday respectively. Nevertheless, selling pressure resumed as Tenaga Nasional (-2.9% W.o.W) was sold down amid the takeover of 1MDB’s Project 3B by national utility company – the key index lost 8.74 pts to 1,718.12 pts on Thursday. On Friday, the FBM KLCI recovered slightly (by 3.65 pts) to 1,721.77 pts, but the FBM KLCI had lost 12.60 pts last week.

FBM KLCI Weekly Technical Readings

The weekly MACD Indicator continues to trend lower last week. The weekly RSI is staying below the 50 level. Meanwhile, the daily MACD Line has crossed above the daily Signal Line. The RSI has trended higher above 30 – suggesting that the short term momentum could be picking up.

FBM KLCI Support & Resistance

Once again, the FBM KLCI ended lower and continues to stay below the EMA9 level – indicating that the downtrend is strong. However, as both the daily MACD and RSI are trending mildly higher, the FBM KLCI is likely to perform a technical rebound towards the 1,740-1,750 levels over the near term. Meanwhile, if the immediate support of 1,715 is violated, further support will be set around the 1,700 level.

Moving Forward

Wall Street is likely to trend on a mildly positive note over the near term as the Dow is slightly above the 18,000 level last week. Also, as the traders are anticipating that the Fed will only increase interest rates in September on a gradual manner, the trading environment may be on a slightly positive environment for now. Meanwhile, the Malaysian stockmarket could rebound towards the 1,740-1,750 levels as selective buying momentum was seen last week, which could spill over to this week.

Sector focus

The FBM ACE index has rebounded positively over the past week. The MACD Histogram has extended another green bar. The RSI has crossed above 30. The FBM ACE index may retest the 6,404 resistance level. Meanwhile, support will be pegged around the 5,937 level.

Stocks to focus

PRIVA – Price rebounded off the support of the RM0.225 level and surged above EMA9. The MACD Indicator has issued a “Buy” signal. The RSI is hovering around 50. Price may rebound higher towards the resistance of the RM0.31 level.

CAREPLS – Price surged strongly above the RM0.74 level with improved volumes. The MACD has expanded positively above zero, while the RSI is hovering above 50. Price target will be located around the RM0.85-RM0.90 level. Support will be pegged around the RM0.70 level. 

Source: M+ Online Research - 22 Jun 2015