Lower amid thin volume

Regional markets finished mixed on Thursday as oil prices remained volatile while investors digested remarks from Federal Reserve Chair Janet Yellen. Meanwhile, the FBMKLCI pared earlier losses to close 0.46 points (0.03%) down at 1,643.95. Yesterday’s performance of the FBMKLCI was muted, with the local benchmark trading within a tight 7-point range throughout the day on low volume. As trading volume normalises over the coming days, we expect the FBMKLCI to remain bias to the downside amid an overall bearish trend and weakening indicators (the MACD is below the zero-line, while the Stochastic indicator has dipped downwards). Near term support is likely to be present at 1,637 (S1) and 1,600 (S2) while overhead resistance levels are 1,650 (R1) and 1,680 (R2).

 

Fifth consecutive loss for the DJIA

Overnight on Wall Street, stocks fell amid mounting concerns over the health of the global economy and as efforts of central banks lose their potency. In focus was Sweden’s central bank which announced it would push interest rates deeper into negative territory, about two weeks after Japan shocked markets by imposing negative interest rates to calm the turmoil. At market close, the DJIA was down by 254.56 points (1.60%) to 15,660.18 having found some support at the 15,500 (S1) level earlier in the day. However, the MACD and Stochastic indicators remain in bearish state. Hence, we would expect this 15,500 support level to be retested again. A decisive break below would signal further losses towards 15,337 (S2). For reactionary or technical rebounds, resistance levels are located at 16,000 (R1) and 16,500 (R2).

 

Daily technical highlights

· YEELEE (Not Rated). YEELEE has been on a bullish medium-term uptrend, having risen from a low of RM1.43 in September 2015 to a high of RM2.34 in early January. Following a brief pullback to the trend-line last month, YEELEE appears to have bottomed out at RM2.00 (S1) and is now poised to resume its uptrend. Yesterday, YEELEE gained a further 7.0 sen (3.35%) to RM2.16 and this came in tandem with the Stochastic indicator which has emerged from oversold levels. From here, we expect the share price to stage a retest of the RM2.34 top (R1) over the coming weeks. Should this level be taken out, further upside would at RM2.55 (R2). Downside support levels are RM2.00 (S1) and RM1.89 (S2).

· BPPLAS (Not Rated). BPPLAS has been on a medium-term uptrend since July 2015 as strong earnings drove the share price to new heights over these past eight months. While the share price had not been immune to the recent market weakness, BPPLAS had held up considerably well with its overall uptrend remaining intact. Yesterday’s 8.0 sen (4.42%) gain to RM1.89 marked a breakaway from its short-t erm consolidation phase where we expect the Buy signal on the Stochastic indicator to provide impetus towards the January’s top of RM2.02. Should this level be taken out in a decisive manner, further gains may be possible towards the next resistance at RM2.19 (R2). Immediate support levels are present at RM1.80 (S1) and RM1.67 (S2).