Weekly Recap

Wall Street started on a weaker tone as worries   over   Greece ’s  debt   crisis intensified; the Dow fell 46.53 pts to 17,638.58 pts on Monday. Bargain hunting activities,  however,  emerged  near  the 17,600 support and boosted the key index to end higher at 17,776.91 pts (+93.33 pts) on Tuesday. The selling pressure resumed amid China stockmarket ’s meltdown – the Dow lost 261.49 pts to 17,515.42 pts on Wednesday after it was halted for more than three hours due to technical issues.  Nevertheless, Wall Street trended positively as investors were optimistic that Greece will be on track to secure a bailout – the Dow rose 33.20 pts and 211.79 pts to 17,548.62  pts and 17,760.41 pts over the following two  trading days respectively. Last week, the  Dow increased 30.30 pts.  

Once  again,  share  prices  on  Bursa  Malaysia resumed their selling activities at  the start of the week as the Greeks rejected  the bailout terms over the weekend ’s referendum. The FBM KLCI plunged 17.19 pts to 1,717.05 pts on Monday. Further  selling pressure was noted on the key index  as China ’s stockmarkets plummeted more  than 30% since mid-June, leaving trading  sentiments extremely negative; the FBM  KLCI fell 4.75 pts and 16.47 pts to 1,712.30  pts and 1,695.83 pts over the next two  trading days respectively. However, bargain  hunting activities emerged around the 1,700  level and boosted the key index to end  higher at 1,701.54 pts (+5.71 pts) and  1,715.58 pts (+14.04 pts) on Thursday and  Friday respectively. Nevertheless, on a  W.o.W basis, the FBM KLCI lost 18.66 pts. 

FBM KLCI Weekly Technical Readings

Despite the weekly MACD Line below zero,  the weekly MACD Histogram extended  another green bar. The weekly RSI is  oversold.  

Meanwhile, the daily MACD Histogram has  turned green, but the daily RSI is hovering  below 50.

FBM KLCI Support & Resistance

Once again, the FBM KLCI has been hovering near the 1,700 level throughout the week as buying support was noted after it was sold down below the psychological level. Hence, the immediate support will be located around 1,700, while the next support will be pegged around 1,670. Meanwhile, as the FBM KLCI has crossed above the EMA9 level, further upside on the key index may be seen to around 1,740.  

Moving Forward

With sentiments around the globe still negative on the back of Greece and China worries, the Dow may sustain its trading range below the 18,000 over the near term with a downward bias. Meanwhile, the FBM KLCI, however, may perform a technical rebound towards the 1,740 level as a potential rebounding formation along 1,700 has emerged. Traders may still focus on export-related shares within the Furniture/Timber and Technology related shares on the back of weaker Ringgit.

Sector focus

The Industrial Product index rebounded off the 134 level and ended above EMA120. The MACD Histogram has turned green, while the RSI has crossed above 50. The index may rebound further towards the 140 level.

Stocks to focus

EWEIN – Price has rebounded off the EMA120 level with higher-than-average volumes. The MACD Indicator has been trending higher, but the RSI is marginally below 50. Price may rally towards the RM0.89 and RM1.00 levels. Support will be set around the RM0.68 level.

3A – Price has rebounded off the RM1.00 level with improved volumes. The MACD Histogram has extended another green bar, while the RSI has crossed above 50 – suggesting that the momentum is intact. Price may rally towards the RM1.30 level. Support will be seen around the RM1.10 level.