Weekly Recap

U.S. equities started the shortened trading week on a negative tone, led by healthcare stocks despite a record merger deal of US$160 billion between Allergan Plc and Pfizer Inc. – the Dow slipped 31.13 pts to 17,792.68 pts on Monday. However, mild buying interest was noted that boosted the key index to end higher at 17,812.19 pts (+19.51 pts) and 17,813.39 pts (+1.20 pts) on Tuesday and Wednesday respectively despite the geopolitical tension between Turkey and Russia. Nevertheless, after the thanksgiving holiday in the U.S., selling pressure resumed and the key index fell 14.90 pts to 17,798.49 pts, led by energy stocks amid a sharp 3.3% plunge in WTI crude oil prices to US$41.77. Still, the Dow gained 25.32 pts last week.

Meanwhile, share prices on Bursa Malaysia traded on a slightly positive note at the start of the week; the FBM KLCI jumped 9.01 pts to 1,670.90 pts on Monday in tandem with the lower liners and ACE markets stocks.

Follow-through buying support continues to be seen on the market and the FBM KLCI further increased by 6.13 pts and 7.39 pts to 1,677.03 pts and 1,684.42 pts over the next two trading days respectively, led by oil and gas heavyweights amid a rebound in the WTI crude oil prices from the US$40.00 level. However, the buying interest took a pause and mild selling pressure was noted near the EMA120 level - the FBM KLCI slid 1.33 pts and 0.5 pts to 1,683.09 pts and 1,682.59 pts over the next two trading days respectively. On a W.o.W basis, the FBM KLCI rose 20.7 pts, marking a second consecutive week of gains.

FBM KLCI Weekly Technical Readings

The weekly MACD Histogram extended another green bar. The weekly RSI is hovering above 50.

Meanwhile, the daily MACD Indicator expanded positively above zero, but the daily RSI is below 50.

FBM KLCI Support & Resistance

The FBM KLCI extended its sideways consolidation phase last week below the 1,700 level. However, with the short term momentum indicator – the RSI suggesting that the momentum is weak, the FBM KLCI may pullback towards the 1,660 over the near term. If the FBM KLCI falls below 1,660, further downside will be seen around 1,600. Meanwhile, the key index’s upside is envisaged around the 1,700 level.

Moving Forward

Wall Street has been trading on a cautious mode last week as most investors were on the sidelines ahead of a potential interest rate hike in December. The Dow’s upsides may be capped around the 18,000 psychological level. Similarly, share prices on Bursa Malaysia could be seeing limited upside as the small caps and lower liners may see further profit taking activities after their recent strong rally. Nevertheless, traders may lookout for opportunities within trading and services sector.

Sector focus

The Trading/Services index trended sideways between the 225-231 levels over the past two months. The MACD line is hovering above zero. The RSI, however, is below 50. Monitor for a breakout above 231, targeting the 250 level. Support will be pegged around 225.

Stocks to focus

SKPRTRO – Price is retesting the resistance around the RM2.20 level after a three month consolidation. As the MACD and RSI indicators are indicating that the positive momentum is still intact, price may rally towards RM2.50. Support will be located around RM2.00.

PRESBHD – Price rebounded off the EMA20 level with improved volumes. The MACD indicator expanded positively above zero, while the RSI has hooked above 50. Monitor for a breakout above RM2.70, targeting the RM3.00 level. Support will be anchored around RM2.55.

Source: M+ Online Research - 30 Nov 2015