Weekly Recap

Wall Street ended last day of November on a shaky note, but managed to pick up its momentum as investors cheered the better-than-expected jobs data. The Dow fell 78.57 pts to 17,719.92 pts on Monday, but bargain hunting activities emerged, boosting the key index to end higher at 17,888.35 pts on Tuesday. Nevertheless, selling pressure returned and energy stocks were focused ahead of the OPEC meeting on Friday; the Dow plunged 158.67 pts and 252.01 pts to 17,729.68 pts and 17,477.67 pts on Wednesday and Thursday respectively. However, as U.S. employers added 211,000 jobs in November, the Dow rocketed 369.96 pts to end the week at 17,847.63 pts on Friday. On a W.o.W basis, the Dow gained 49.14 pts.

Similarly, share prices on Bursa Malaysia trended lower at the start of the week as Tenaga Nasional (-1.5% W.o.W) and British American Tobacco (-1.1% W.o.W) was being sold down; the FBM KLCI declined

10.43 pts to 1,672.16 pts on Monday. However, as bargain hunting activities emerged near the 1,660 level, the FBM KLCI rebounded to end at 1,682.37 pts (+10.21 pts) on Tuesday, led by telco and banking heavyweights. Nevertheless, selling pressure resumed on the back of lower WTI crude oil prices, which retested the US$40 level last week and SapuraKencana slid 4.9% W.o.W; the FBM KLCI lost 5.60 pts, 2.85 pts and 6.05 pts to 1,676.77 pts, 1,673.92 pts and 1,667.87 pts over the next three trading days respectively. Last week, the FBM KLCI fell 14.72 pts.

FBM KLCI Weekly Technical Readings

The weekly MACD Line is hovering below zero, while the MACD Histogram has turned red. However, the weekly RSI is hovering above 50.

Meanwhile, the daily MACD Line is trending lower towards the zero level, but the daily RSI is above 50.  

FBM KLCI Support & Resistance

Last week, the FBM KLCI gapped down and retested the 1,660 level. Also, the FBM KLCI rebounded to revisit the EMA120 level near the 1,687 level. With both the daily and weekly MACD Indicators looking negative, the key index could pullback below the 1,660 level to trade towards the 1,600 level. Meanwhile, if the key index could surge above the 1,700 level, the next resistance will be pegged around the 1,730 level.

Moving Forward

U.S stockmarkets could see further buying support as the recent rebound move on the Dow may lead to a retest of the all-time-high zone of the 18,350 level as investors continue to see growth in the economic activity. Meanwhile, the Malaysian stockmarket may gap-up on a spill over effect from the U.S. market and the FBM KLCI could see a technical rebound phase to revisit the 1,695-1,700 zone. Traders are likely to find some trading opportunities within properties and technology counters.

Sector focus

The Technology index trended sideways on a positive bias as its EMA9 is above the EMA20 level. The MACD Histogram has turned green, while the RSI is hovering above 50. Monitor for a breakout above 24.5, targeting the 25.6 level. Support will be located around the 23.4.

Stocks to focus

GPACKET – Price experienced a breakout above the RM0.28 level with improved volumes. The weekly MACD Indicator trended positively above zero, but the weekly RSI is overbought. Resistance is located around RM0.36. Support will be set around the RM0.265 level.

UNISEM – Price trended sideways above the weekly EMA9 level with mild volumes. The weekly MACD Line is hovering above zero, but the weekly RSI is hovering above 70. Resistance will be envisaged around RM2.57. Support will be anchored around the RM2.25 level.

Source: M+ Online Research - 7 Dec 2015