Weekly Recap

The year-end rally on U.S. equities were muted and slowed down throughout the final trading week of 2015 as profit taking activities kicked in amid the softer WTI crude oil prices, which stayed below the US$40 per barrel mark over the past two weeks. The Dow slid 23.90 pts to 17,528.27 pts on Monday. However, the key index managed to rebound strongly, led by technology giants like Alphabet Inc and Apple Inc. – the Dow increased 192.71 pts to 17,720.98 pts on Tuesday. Nevertheless, selling interest resumed and the Dow lost 117.11 pts and 178.84 pts to 17,603.87 pts and 17,425.03 pts over the next two trading days respectively as energy shares continue to take a beating. Last week, the key index fell 127.14 pts, while on a Y.o.Y basis, the Dow has fallen 398.04 pts.

Meanwhile, share prices on Bursa Malaysia were slightly positive as the year-end rally started two weeks ago. Following the rebound move on the back of window

dressing activities, the FBM KLCI shot up 7.22 pts and 14.63 pts to 1,670.73 pts and 1,685.36 pts on Monday and Tuesday respectively, led by banking heavyweights like Maybank and Public Bank. Despite the selloffs on Wall Street, further buying support were noted on the plantation heavyweights such as IOI Corp amid a strong rally on crude palm oil prices – the FBM KLCI rose to an intraday high of 1,706.25 pts before ending at 1,693.14 pts (+7.78 pts) on Wednesday. However, the key index took a pause and slid marginally to end at 1,692.51 pts (-0.63 pts). On a W.o.W basis, the key index added 29 pts, but fell 68.94 pts over the year 2015.

FBM KLCI Weekly Technical Readings

The weekly MACD Histogram has extended another green bar. Also, the weekly RSI, stayed above the 50 level.

Meanwhile, the daily MACD Indicator trended positively above the zero level, while the daily RSI is above 50.

FBM KLCI Support & Resistance

The FBM KLCI maintained its positive momentum through the final week of 2015 after a technical rebound above the 1,630 level. With the FBM KLCI retested the resistance of 1,700 last week, coupled with the positive indications of both the weekly and daily indicators, the FBM KLCI may revisit the 1,730 level. Meanwhile, if the FBM KLCI breaks the support of 1,630, the next support will be set around 1,600.

Moving Forward

With the U.S. stockmarkets ending the year on a slightly negative mood after a five-year rally, we could expect the Dow and S&P 500 to be on a correction or consolidation phase over the near term. Similarly, most of the shares, excluding the exports related stocks on Bursa Malaysia, could trend lower on the back of the spillover effect from the U.S. stockmarkets. However, traders are likely to maintain their interest within export related stocks as the Ringgit is likely to stay weak over the near term.

Sector focus

The Consumer index experienced a breakout above the 583 level. The MACD Indicator has crossed above zero, while the RSI has hooked above 50 – suggesting that the momentum is intact. The index may target 592 and 604 over the near term. Support will be pegged around 583.

Stocks to focus

FPI – Price trended sideways above the EMA9 level with improved volumes. The MACD Histogram extended another green bar, but the RSI is below 50. Monitor for a breakout above RM0.90, targeting the RM1.00 level. Support will be anchored around the RM0.85 level.

Source: M+ Online Research - 4 Jan 2016

PWROOT – Price formed a bullish engulfing bar with improved volumes after a four-day consolidation. The MACD Line is near to zero, while the RSI stood around 50. Monitor for a breakout above RM2.75, targeting the RM3.00 level. Support will be located around RM2.70.