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NewsStocks stay in correction mode BY K.M.LEE
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Stocks stay in correction mode BY K.M.LEE
by Cals Mon 11 Nov 2013, 00:07
Published: Saturday November 9, 2013 MYT 12:00:00 AM
Updated: Saturday November 9, 2013 MYT 7:43:24 AM
Stocks stay in correction mode
BY K.M.LEE
REVIEW: Taking the cue from a steadier US equities, Bursa Malaysia started out the week on a steadier note, with the FBM Kuala Lumpur Composite Index (FBM KLCI) rising 1.37 points to 1,811.78.
Sentiment was positive while quality issues led the way in early deals.
However, the momentum could not be sustained for long, as a generally frail showing in the Asia-Pacific region was not supportive of the local bourse.
In the wake of profit-taking, the key index later succumbed to pressure and slipped into the red zone to a low of 1,806.93 in mid-morning before turning sideways for the rest of the day.
At the close, the key index eased 2.94 points to 1,807.47 in sluggish trade on Monday.
Bursa was shut for a public holiday on Tuesday. While we enjoyed the festive break, Wall Street extended the upward thrust and regional equities showed signs of stabilising, trading slightly firmer, as investors came out to seek value buys after the recent weakness.
As expected, stocks on the domestic front advanced on resumption of business on Wednesday, playing catch up, but the positive momentum again was punctured by profit-taking activity.
Apparently, investors opted to take some money off the table in the absence of a post-Budget 2014 rally at home, ahead of key US economic data scheduled for release later in the week.
In cautious session, the key index reversed morning gains and drifted gradually to a low of 1,800.63 in the afternoon before trimming losses slightly to finish down 4.42 points to 1,803.05.
Despite the lower close, some lower liners and a couple of new listings – Karex Bhdand Barakah Offshore Petroleum Bhd – attracted significant interests in mid-week.
Then, overnight Wall Street set a new record closing high, jumping 128.66 points to 15,746.88 amid growing optimism that the Federal Reserve would keep rates low for a longer period, boosted further by strong data from Germany.
Though most Asian markets performed poorly, the local bourse hitched a ride on the strength of the Dow, trading higher.
Blue chips once again led the winners board, propelling the FBM KLCI up 3.56 points to 1,806.61 on Thursday.
Thereafter, profit-taking activity kicked in due to a lack of compelling leads and in line with global losses, the local bourse gave back 2.13 points to 1,804.48 yesterday.
Statistics: On a weekly basis, the principal index declined 5.93 points, or 0.3% to 1,804.48, against 1,810.41 at the close on Nov 1.
Total turnover for the four-day week stood at 7.721 billion shares worth RM7.353bil, compared with 8.969 billion units valued at RM9.351bil done a week ago.
Technical indicators: The daily slow-stochastic momentum index fell from the top to the neutral area before flashing a “weak buy” signal yesterday.
In stark contrast, the 14-day relative strength index was still on the downtrend, ending at 46 points.
Meanwhile, the daily moving average convergence/divergence (MACD) histogram continued to expand negatively against the daily signal line to stay bearish. It had triggered a sell on Monday.
Weekly indicators were deteriorating, with the weekly slow-stochastic momentum index flashing a tentative sell at the top and the weekly MACD appearing in danger of slipping below the weekly signal line.
Outlook: Bursa has been in correction mode the past couple of weeks, pulling the FBM KLCI from the recent high of 1,822.17 on Oct 24 to a low of 1,798.46 on Thursday.
The overall sentiment was frail, as investors fretted about the timeline the Fed would trim its monthly purchases of US$85bil in assets while the upbeat figures indicated the world’s largest economy was gaining traction.
For now, it is unclear when the Fed would start tapering, but one thing is quite apparent. Key jobs report in the United States is due soon. If we get a surprise number to the upside, global equities, including the local bourse will retreat deeper into the red in the short term.
Based on the daily chart, Bursa has carved out a short-term descending channel following two weeks of losses. In the absence of new catalyst to boost buying, the market is at risk of extending the newly-formed bearish channel going forward.
Technically, the flagging indicators on our radar screen suggest that stocks are likely to stay in correction mode this week, unless fresh positive leads emerges.
Tough resistance is maintained at the all-time high of 1,826.22, set on May 6.
Initial support is envisaged at the 1,770 points, of which a crack may pull the key index down to the 1,740 points floor.
Updated: Saturday November 9, 2013 MYT 7:43:24 AM
Stocks stay in correction mode
BY K.M.LEE
REVIEW: Taking the cue from a steadier US equities, Bursa Malaysia started out the week on a steadier note, with the FBM Kuala Lumpur Composite Index (FBM KLCI) rising 1.37 points to 1,811.78.
Sentiment was positive while quality issues led the way in early deals.
However, the momentum could not be sustained for long, as a generally frail showing in the Asia-Pacific region was not supportive of the local bourse.
In the wake of profit-taking, the key index later succumbed to pressure and slipped into the red zone to a low of 1,806.93 in mid-morning before turning sideways for the rest of the day.
At the close, the key index eased 2.94 points to 1,807.47 in sluggish trade on Monday.
Bursa was shut for a public holiday on Tuesday. While we enjoyed the festive break, Wall Street extended the upward thrust and regional equities showed signs of stabilising, trading slightly firmer, as investors came out to seek value buys after the recent weakness.
As expected, stocks on the domestic front advanced on resumption of business on Wednesday, playing catch up, but the positive momentum again was punctured by profit-taking activity.
Apparently, investors opted to take some money off the table in the absence of a post-Budget 2014 rally at home, ahead of key US economic data scheduled for release later in the week.
In cautious session, the key index reversed morning gains and drifted gradually to a low of 1,800.63 in the afternoon before trimming losses slightly to finish down 4.42 points to 1,803.05.
Despite the lower close, some lower liners and a couple of new listings – Karex Bhdand Barakah Offshore Petroleum Bhd – attracted significant interests in mid-week.
Then, overnight Wall Street set a new record closing high, jumping 128.66 points to 15,746.88 amid growing optimism that the Federal Reserve would keep rates low for a longer period, boosted further by strong data from Germany.
Though most Asian markets performed poorly, the local bourse hitched a ride on the strength of the Dow, trading higher.
Blue chips once again led the winners board, propelling the FBM KLCI up 3.56 points to 1,806.61 on Thursday.
Thereafter, profit-taking activity kicked in due to a lack of compelling leads and in line with global losses, the local bourse gave back 2.13 points to 1,804.48 yesterday.
Statistics: On a weekly basis, the principal index declined 5.93 points, or 0.3% to 1,804.48, against 1,810.41 at the close on Nov 1.
Total turnover for the four-day week stood at 7.721 billion shares worth RM7.353bil, compared with 8.969 billion units valued at RM9.351bil done a week ago.
Technical indicators: The daily slow-stochastic momentum index fell from the top to the neutral area before flashing a “weak buy” signal yesterday.
In stark contrast, the 14-day relative strength index was still on the downtrend, ending at 46 points.
Meanwhile, the daily moving average convergence/divergence (MACD) histogram continued to expand negatively against the daily signal line to stay bearish. It had triggered a sell on Monday.
Weekly indicators were deteriorating, with the weekly slow-stochastic momentum index flashing a tentative sell at the top and the weekly MACD appearing in danger of slipping below the weekly signal line.
Outlook: Bursa has been in correction mode the past couple of weeks, pulling the FBM KLCI from the recent high of 1,822.17 on Oct 24 to a low of 1,798.46 on Thursday.
The overall sentiment was frail, as investors fretted about the timeline the Fed would trim its monthly purchases of US$85bil in assets while the upbeat figures indicated the world’s largest economy was gaining traction.
For now, it is unclear when the Fed would start tapering, but one thing is quite apparent. Key jobs report in the United States is due soon. If we get a surprise number to the upside, global equities, including the local bourse will retreat deeper into the red in the short term.
Based on the daily chart, Bursa has carved out a short-term descending channel following two weeks of losses. In the absence of new catalyst to boost buying, the market is at risk of extending the newly-formed bearish channel going forward.
Technically, the flagging indicators on our radar screen suggest that stocks are likely to stay in correction mode this week, unless fresh positive leads emerges.
Tough resistance is maintained at the all-time high of 1,826.22, set on May 6.
Initial support is envisaged at the 1,770 points, of which a crack may pull the key index down to the 1,740 points floor.
Last edited by Cals on Mon 11 Nov 2013, 00:09; edited 1 time in total
Cals- Administrator
- Posts : 25277 Credits : 57721 Reputation : 1766
Join date : 2011-09-08
Location : global
Comments : “My plan of trading was sound enough and won oftener that it lost. If I had stuck to it Iâ€
d have been right perhaps as often as seven out of ten times.â€
Stock Exposure : Technical Analysis / Fundamental Analysis / Mental Analysis
Re: Stocks stay in correction mode BY K.M.LEE
by Cals Mon 11 Nov 2013, 00:08
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Cals- Administrator
- Posts : 25277 Credits : 57721 Reputation : 1766
Join date : 2011-09-08
Location : global
Comments : “My plan of trading was sound enough and won oftener that it lost. If I had stuck to it Iâ€d have been right perhaps as often as seven out of ten times.â€
Stock Exposure : Technical Analysis / Fundamental Analysis / Mental Analysis
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