Also Weekly Recap

Wall Street started the week on a positive tone as the jobs data posted two weeks ago may hold back the Fed’s decision on an interest-rate hike this year – the Dow jumped 304.06 pts to 16,776.43 pts on Monday. After a flattish session on Tuesday where the Dow ended at 16,790.19 pts (+13.76 pts), the key index advanced strongly by 122.10 pts and 138.46 pts to 16,912.29 pts and 17,050.75 pts on Wednesday and Thursday respectively; on the back of an extended buying interest among commodities related shares amid the strong recovery of WTI crude oil price which traded above the US$50 level. The Dow continues to extend its rally for the week and ended at 17,084.49 pts (+33.74 pts). Last week, the Dow gained 612.12 pts.

Meanwhile, tracking the rebounding trend on Wall Street, the FBM KLCI also trended positively after surpassing above the EMA9 level two weeks ago – the FBM KLCI gapped up 18.79 pts to 1,647.59 pts on

Monday, followed by another 14.92 pts to 1,662.51 pts on Tuesday. As the Ringgit continues to strengthen towards the RM4.10 against the US$, coupled with the positive moves on the WTI crude oil price above the US$47 per barrel mark, buying support emerged within the oil and gas heavyweights that boosted the FBM KLCI to end at 1,689.25 pts (+26.74 pts) and 1,692.20 pts (+2.95 pts) over the next two trading days respectively. The key index extended its upward movement above the 1,700 psychological level at 1,706.54 pts (+14.34 pts) on Friday. On a W.o.W basis, the key index gained 77.74 pts, its best weekly gain since May 2013.

FBM KLCI Weekly Technical Readings

The weekly MACD Indicator issued a “Buy” signal after extending another green bar. Also, the weekly RSI is trending towards 50.

Meanwhile, the daily MACD Indicator expanded positively above zero, while the RSI continues to stay above the 50 level.

FBM KLCI Support & Resistance

The FBM KLCI retested and surpassed the 1,700 psychological level last week as oil and gas heavyweights were focused. With the weekly MACD Indicator suggesting that the trend is positive, the FBM KLCI may further extend its rebound wave over the near term. The next resistance will be envisaged around the 1,744 level. Meanwhile, if the FBM KLCI trips below 1,660 level, the next support will be anchored around the 1,600 level.

Moving Forward

U.S. stockmarkets could be trading on a slightly positive tone over the near term as the Dow and S&P 500 are hovering above their psychological level of 17,000 and 2,000 levels respectively. Similarly, share prices on the local front are likely to see mild buying interest as the FBM KLCI has surpassed the psychological level of 1,700, coupled with the recovery of WTI crude oil prices. Traders may lookout for trading opportunities within oil and gas sector.

Sector focus

The Oil and Gas user index trended higher and retested the 83.15 resistance level. The MACD Indicator trended higher over the past week. The RSI, however, is overbought. Resistance will be set around 86.39. Meanwhile, support will be located around 80.07.

Stocks to focus

COASTAL – Price trended higher above the EMA60 level with improved volumes. The MACD Indicator expanded positively above zero, but the RSI is slightly overbought. Price may rally towards RM2.40 after a short consolidation. Support will be set around RM2.00.

BARAKAH – Price experienced a breakout above the RM1.00 level with higher-than-average volumes. The MACD Line is trending higher, but the RSI is overbought. Price may rally towards RM1.15 level after a short consolidation. Support will be pegged around the RM0.98 level.

Source: M+ Online Reseach - 12 Oct 2015