Technicals FBMKLCI – A pause between the 20-day and 50-day MA lines

Technicals FBMKLCI – A pause between the 20-day and 50-day MA lines
Business & Markets 2014
Written by Alliance IB Research  
Wednesday, 19 February 2014 07:07

KUALA LUMPUR (Feb 19): The FBM KLCI had on 18 Feb 2014 traded within the previous day’s range to form an inside day bar. In the absence of supportive buying interest, the benchmark index held its position near the low end throughout most of the trading sessions before settling at 1,825.24 (-2.24, -0.12%).
Losers outnumbered gainers with 454 stocks ending lower and 393 stocks finishing higher. That gave a market breadth of 0.86 indicating the bears were in control.

Major stock advancers among the FBM KLCI component stocks included Petgas (+RM0.20, +0.87%), PPB (+RM0.20, +1.26%), and Petdag (+RM0.22, +0.72%). Major stock decliners included SKPetro (-RM0.06, -1.34%), Genting (-RM0.08, -0.77%), and KLK (-RM0.28, -1.17%). Total market value traded was RM2.30bn.

The inside day bar at the 50-day MA line indicated an indecisive game play amongst market participants.

This showed that market participants were not ready to be aggressive on the buying side at this juncture.

Market participants are hoping to see a little bit more consolidation between the 20-day and 50-day MA lines. The overhead resistance and support are pegged at 1,838 and 1,810 respectively. Indicator wise, the MACD is still above the 9-day moving average line.

What to expect on Wednesday (19 Feb 2014) ? The analysis of overall daily market action on 18 Feb 2014 revealed that buying power was weaker than selling pressure. As such, the FBM KLCI would likely trade below the 1,822.68 level on 19 Feb 2014.