Weekly Recap

U.S. stockmarkets extended its rally to near the 18,000 level as the WTI crude oil prices rallied more than 6.0% last Tuesday – the Dow jumped 165.22 pts to 17,828.76 pts on Monday, followed by another boost of 89.39 pts to 17,918.15 pts on Tuesday. However, the Dow took a mild retracement on the back of profit taking activities and the key index ended lower at 17,867.58 pts (-50.57 pts) and 17,863.43 pts (-4.57 pts) over the next two trading days respectively. In addition, the Fed may still be considering increasing interest rates this December that further dampen sentiments. Nevertheless, as the jobs data shows that 271,000 jobs were added in October – the Dow rebounded 46.90 pts to end the Friday session at 17,910.33 pts. On a W.o.W basis, the key index gained 246.79 pts.

Meanwhile, share prices on Bursa Malaysia started the week on a negative tone but managed to recover to a stronger position throughout the week led by selected oil and

gas heavyweights like Petronas Chemical (+3.5% W.o.W) and SapuraKencana (+4.7% W.o.W). The FBM KLCI slid 1.64 pts to 1,664.07 pts on Monday, but rebounded strongly by 13.49 pts to 1,677.56 pts on Tuesday amid strong buying interest in Genting Bhd. Follow-through buying activities were noted as the FBM KLCI trended higher to end at 1,685.62 pts (+8.06 pts) and 1,688.54 pts (+2.92 pts) over the next two trading days respectively led by Tenaga Nasional (+4.3% W.o.W). However, mild profit taking activities were seen on the FBM KLCI and it slipped 2.84 pts to 1,685.70 pts on Friday. Still, on the weekly basis, the FBM KLCI gained 19.99 pts.

FBM KLCI Weekly Technical Readings

The weekly MACD Histogram has turned green, but the weekly RSI is below 50. Meanwhile, the daily MACD Histogram extended another green bar as the daily MACD Line hovers above zero, but the daily RSI is below 50.  

FBM KLCI Support & Resistance

Despite the selloffs of the FBM KLCI to below the 1,700 psychological level, it managed to rebound towards 1,700 last week. However, the key index has formed two shooting star candles near the 1,700 level. With the daily RSI hovering below 50, the key index may pullback towards the 1,660 level, followed by the 1,630 level over the near term. Meanwhile, the resistance will be located at the 1,700-1,720 levels.

Moving Forward

With the improving jobs data, Wall Street is likely to trade higher over the near term – the Dow and S&P 500 might retest its all-time-high of the 18,350 and the 2,130 levels respectively. Meanwhile, as the WTI crude oil prices retraced below the EMA20 level last week, the FBM KLCI may see short term weakness and pullback towards the 1,660 level. Nevertheless, traders may look into technology and ACE markets as most of them are uptrend intact, while properties counters are within the recovering phase.

Sector focus

The Properties index experienced a trendline breakout, followed by a resistance breakout of 1,200 last week. The weekly MACD Line has turned higher consistently over the past two months. The weekly RSI has crossed above 50. Resistance will be located around 1,300. Meanwhile, support will be set around 1,100.

Stocks to focus

L&G – Price has formed a Breakout-Pullback-Continuation pattern above RM0.415. Monitor for a breakout above the RM0.45 level. Target price will be located around RM0.50. Support will be pegged around the RM0.42 level.

SBCCORP – Follow-through buying interest was noted above the RM0.88 level with improved volumes. The MACD Indicator is trending higher, but the RSI is slightly overbought. Price target will be envisaged around the RM0.98 and RM1.10 levels. Support will be set around RM0.85.

Source: M+ Online Research - 9 Nov 2015