Weekly Recap

U.S. equities started the week on a slightly positive note after the selloff two weeks ago – the Dow added 125.61 pts to 16,510.19 pts on Monday amid reassuring statements from the Fed’s policymakers. However, U.S. stocks retreated as selling pressure emerged on the back of weaker crude oil prices and the Dow plunged 179.72 pts, 50.58 pts and 78.57 pts to 16,330.47 pts, 16,279.89 pts and 16,201.32 pts over the next three trading days respectively. Despite the weak broader market as the S&P ended in the negative territory, the Dow managed to closed higher at 16,314.67 pts (+113.35 pts) on Friday. Still, the Dow lost 69.91 pts for the week, marking the second consecutive weekly loss.

Meanwhile, following the best weekly gain two weeks ago, shares prices on Bursa Malaysia reversed amid negative sentiments within the regional stockmarkets – the FBM KLCI plunged 29.98 pts to

1,639.47 pts on Monday. Fresh follow-through selling pressure continues to hit selected banking heavyweights and the key index ended lower at 1,635.37 pts (-4.10 pts) and 1,613.17 pts (-22.20 pts) over the next two trading days respectively. However, the FBM KLCI resumed on Friday after the Hari Raya Haji public holiday on a positive tone; the key index rose 1.84 pts to 1,615.01 pts amid mild bargain hunting activities among oil and gas heavyweights like Petronas Chemical and Petronas Dagangan. Last week, the FBM KLCI lost 54.44 pts.

FBM KLCI Weekly Technical Readings

The weekly MACD Line stayed flattish below zero, but the weekly MACD Histogram extended another green bar. Nevertheless, the weekly RSI is below 50.

Meanwhile, the daily MACD Line trended lower, in tandem with the daily MACD Histogram’s movement. However, the RSI is hovering above 50.

FBM KLCI Support & Resistance

After retesting the 1,680-1,700 resistance zone two weeks ago, the FBM KLCI faced with strong selling interest and the key index has been trending lower towards the support of the 1,600 level. With both the daily indicators suggesting that the momentum is slightly negative, the FBM KLCI’s upside will be limited to around the 1,660 levels. Meanwhile, the immediate support will be set around the 1,600 level, followed by the 1,560 level.

Moving Forward

U.S. stockmarkets are on a technical rebound phase, where the Dow is hovering between the 16,000-17,000 levels. If the Dow trips below 16,000 level, more downsides will be seen towards the 15,000 level. Meanwhile, share prices on Bursa Malaysia could extend its downtrend below the 1,600 level as the FBM KLCI has formed a bear flag pattern on the weekly chart. Nevertheless, traders may lookout for rebound plays among consumer stocks.

Sector focus

The Consumer index rebounded off the 564 level, forming the breakout-pullback-continuation pattern. The MACD Histogram has turned green, while the RSI is hovering above 50. Resistance will be pegged around 574 and 590 levels. Support will be set around the 564 level.

Stocks to focus

YOCB – Its price experienced a breakout above the RM0.93 level with higher-than-average volumes. The MACD Line is trending towards the zero level. The RSI is hovering above 50. Price target will be located around the RM1.05-RM1.16 levels. Support will be set around RM0.95.

XINQUAN – Price experienced an Inverted Head and Shoulders pattern breakout above the RM0.525 level. The MACD Indicator expanded positively above zero, but the RSI is overbought. Price target is envisaged around RM0.635. Support will be pegged around RM0.50.

Source: M+ Online Research - 28 Sep 2015