Wall Street trended in a volatile manner throughout the week around the 16,000 psychological level on the back of unstable crude oil prices – the Dow dived 208.29 pts to 15,885.22 pts on Monday. However, bargain hunting activities emerged and the Dow rebounded 282.01 pts to 16,167.23 pts on Tuesday. Nevertheless, the key index’s upsides were capped near the 16,000 level as the selling activities resumed led by technology stocks; the Dow plunged 227.77 pts to 15,944.46 pts on Wednesday. Still, the Dow managed to recover as corporate earnings were focused, coupled with the BOJ’s stimulus measures; the key index surged strongly by 125.18 pts and 396.66 pts to 16,069.64 pts and 16,466.30 pts on Thursday and Friday respectively. Last week, the Dow gained 372.79 pts.

Meanwhile, share prices on Bursa Malaysia started the week on a positive note as the FBM KLCI has rebounded off the 1,600 level two weeks ago on the back of

recovering WTI crude oil prices. The local bourse resumed its upsides after the Thaipusam holiday and the FBM KLCI inched up marginally higher by 1.45 pts to 1,626.66 pts on Tuesday, ending above the EMA9 level for the first time in three weeks. Follow-through buying interest further boosted the key index to end at 1,631.54 pts (+4.88 pts) and 1,631.54 pts (+2.99 pts) over the next two trading days respectively. After the Prime Minister announced the revised budget 2016 on Thursday, coupled with the strong recovery of WTI crude oil prices, the FBM KLCI rocketed 33.27 to 1,667.80 pts on Friday. On a W.o.W basis, the key index increased 42.59 pts.

FBM KLCI Weekly Technical Readings

Despite the weekly MACD Histogram turning green, the weekly RSI, however, is below 50.

Meanwhile, the daily MACD Indicator has issued a “Buy” signal, while the daily RSI has surged above 50.

FBM KLCI Support & Resistance

The FBM KLCI has finally snapped its three-week losing streak and surged above the resistance of the 1,660 level last week. As the daily indicators have turned positive, the FBM KLCI could see further upsides towards the next resistance of 1,700 over the near term. Meanwhile, if the FBM KLCI trips below the 1,630 level, next support will be pegged around the 1,600 level.

Moving Forward

U.S. equities managed to recover with the Dow and S&P 500 rebounded above the 16,000 and 1,900 psychological levels respectively; further buying support should emerge over the near term. Meanwhile, on the local bourse, share prices are likely to trade on a positive note amid the recovering WTI crude oil prices above the US$30 per barrel mark. Traders may look to trade within the oil and gas sector, while plantation stocks might be gaining traction as CPO prices rebounded.

Sector focus

The Plantation index has surged strongly above the 7,737 level. The MACD Indicator has issued a “Buy” signal, while the RSI has crossed 50 – indicating that the positive momentum is intact. Resistance will be pegged around 8,218. Support will be set around 7,300.

Stocks to focus

FGV – Price experienced a trendline breakout above the RM1.55 level with improved volumes. The MACD Indicator has issued a “Buy” signal. The RSI has surged above 50. Resistance will be located around RM2.00. Support will be set around the RM1.45 level.

TDM – Price rebounded off the RM0.64 level with mild volumes. The MACD Indicator is trending higher. The RSI is oversold. Monitor for a breakout above the RM0.68, targeting the RM0.75 level. Support will be anchored around the RM0.64 level.

Source: M+ Online Research - 2 Feb 2016