M+ Online Research Articles
M+ Online Technical Outlook - Trending Lower Amidst The Negative News - 3 May 2016
MalaccaSecurities
Publish date: Tue, 03 May 2016, 10:04 AM
MalaccaSecurities
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All materials published here are prepared by Malacca Securities. For latest offers on Malacca Securities trading products and news, please refer to: https://www.mplusonline.com.my
Malacca Securities Sdn Bhd
Hotline: 1300 22 1233 / 06-336 5178 (office hours: 8.30am - 5.30pm)
Tel : +606 - 337 1533 (General)
Fax : +606 - 337 1577
Email: support@mplusonline.com.my
Wall Street started the week on a slightly cautious note ahead of the FOMC meeting that was held on 26-27th of April, coupled with lower WTI crude oil prices – the Dow ended mildly negative at 17,977.24 pts (- 26.51 pts) on Monday. However, traders were taking the opportunity to bargain hunt some of the oversold stocks as the Dow traded below the 18,000 psychological level; the Dow climbed 13.08 pts and 51.23 pts to 17,990.32 pts and 18,041.55 pts over the next two trading days respectively after the Fed maintained interest rates for the time being as U.S. economic activities appears to have slowed down. Nevertheless, selling pressure resumed and the Dow plunged, led by renewed selling interest on Apple Inc. after Carl Icahn reduced his stake in Apple. The Dow dived 210.79 pts to 17,830.76 pts on Thursday. Follow-through selling activities were noted and the key index fell 57.12 pts to 17,773.64 pts on Friday amid lacklustre earnings. On a W.o.W basis, the Dow has lost 230.11 pts.
Meanwhile, share prices on Bursa Malaysia suffered another round of selling the FBM KLCI steepest plunge since October last year on news of 1MDB’s bond default. The FBM KLCI fell mildly at the start of the week by 3.45 pts to 1,714.51 pts. as traders were cautious ahead of the FOMC meeting. Soon after 1MDB confirmed that it defaulted on a US$1.75 bln bond, the FBM KLCI dived 22.01 pts to 1,692.50 pts. After a flat closing on Wednesday at 1,692.34 pts (-0.16 pts), the selling pressure intensified and sent the FBM KLCI to end lower to 1,674.76 pts (- 17.58 pts) on Thursday, in part due to weaker sentiments from the key regional stockmarkets amid the surprise BOJ move to keep monetary policy steady. On a W.o.W basis, the FBM KLCI lost 45.24 pts.
FBM KLCI Weekly Technical Readings
The weekly MACD Histogram has extended another red bar, in tandem with the weekly MACD Line’s movement. The weekly RSI is hooking towards the 50 level.
Meanwhile, the daily MACD Line crossed below the zero level and trended negatively over the past week. The daily RSI, however, is oversold.
FBM KLCI Support & Resistance
After the FBM KLCI trended sideways between the 1,700-1,730 level over the past five weeks, the key index has violated the 1,700 level and pulled back towards the 1,660 level. As both the weekly and daily indicators are weak, the FBM KLCI may continue to stay around the support of 1,660 points with a mild rebound over the near term. Meanwhile, if the FBM KLCI climbs above 1,680, the next resistance will be set around 1,700.
Moving Forward
U.S. equities may rebound on the back of stronger bargain hunting activities as a hammer candle was formed last Friday on the Dow and it may trade above the 18,000 level over the near term. Similarly, the FBM KLCI may track the near term positive sentiments on the overseas markets with mild buying interest that could boost the FBM KLCI higher towards the psychological level of 1,700. Meanwhile, as lower liners and small caps are weak for the time being, traders may look out for trading opportunities within oversold stocks.
Sector focus
The Properties index has pulled back towards the EMA120 level and formed some near term support around the 1,160 level. The MACD Histogram has turned green, while the RSI is rebounding towards 50. Monitor for a breakout above 1,174 level, targeting the 1,190 level.
Stocks to focus
IOIPG – Price trended sideways around the RM2.35-RM2.42 levels over the past month. The MACD Histogram extended another green bar, while the RSI is hovering above 50. Monitor for a breakout above RM2.42, targeting the RM2.66 level. Meanwhile, support will be pegged around RM2.34.
PASDEC – Price has experienced a strong breakout above the RM0.345 level with high volumes. The MACD Indicator has issued a “Buy” signal, while the RSI trended positively above 50. Price may rally towards the RM0.395 and RM0.46 levels after a short consolidation. Support will be located around RM0.33.
Source: M+ Online Research - 3 May 2016
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