Genting in consolidation mode

IT WAS a harrowing time for investors as fear gripped global financial markets last week. The plunge on the New York Stock Exchange on Thursday made the front pages of newspapers around globe. The Dow Jones Industrial Average plunged 5.8 per cent and the broader-based S&P 500 tumbled 7.2 per cent. To top it all, the US saw its triple-A credit rating downgraded to AA-plus by Standard & Poor's.

The sell-off on Wall Street triggered a meltdown on markets around the world.

On Bursa Malaysia, the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) fell for the fourth week in a row. It closed at 1,524.43 on Friday, giving a week-on-week loss of 24.38 points, or 1.57 per cent.

The FBM KLCI came close to testing its major psychological support of 1,500 points when it hit an intra-week low of 1,509.37 . It touched a high of 1,558.84 on Tuesday, giving a trading range of 49.47 points for the five days.

Heavyweight index-linked component stocks continued to come under heavy selling pressure and at the end of the week just ended, there were 26 losers and only three gainers.

On the foreign front, the New York Stock Exchange's Dow Jones Industrial Average finished at 11,444.61, down 5.75 per cent for the week. The broader S&P 500, sank 7.19 per cent for the week to 1,199.38. The Nasdaq fared the worst: it lost 8.13 per cent for the week.

The Hong Kong stock market plunged in step with the tumble on Wall Street. The Hang Seng Index closed broadly lower at 20,946.14 points on Friday, posting a week-on-week loss of 1,494.11 points, or 6.66 per cent.

In Tokyo, the stock market's blue-chip index continued to stay below the support of its major psychological resistance of 10,000 last week. The Nikkei 225 Index closed broadly lower at 9,299.88 on Friday, recording a week-on-week loss of 533.15 points, or 5.42 per cent.

On Bursa Malaysia, Genting Bhd consolidated its recent gains last week. Its daily price trend closed at RM10.46 on Friday, giving a week-on-week loss of 12 sen, or 1.13 per cent.

The following are the readings of some of its technical indicators:

Moving Averages: Genting's daily price trend stayed below all its 10-, 20-, 30-, 50-, 100- and 200-day moving averages.

Momentum Index: Its short-term momentum index continued to stay below the support of its neutral reference line last week.

On Balance Volume (OBV): Its short-term OBV stayed below the support of its 10-day moving averages.

Relative Strength Index (RSI): Its 14-day RSI had since stayed below the 50 level. Its technical reading stood at the 36.39 per cent level at the market close last Friday.

Outlook

Select heavweight blue chips came under heavy selling pressure last week. Genting was one of these counters.

Chartwise, Genting's monthly price trend staged a technical breakout of its immediate overhead resistance. It continued to trend above the support of its intermediate-term uptrend. However, its monthly Moving Average Convergence Divergence (MACD) indicator displayed sign of weakness.

Its weekly price trend continued to stay above its intermediate-term uptrend (See Genting's weekly price chart B1:B2) last week. It continued to trend above the support of its immediate downside support (B3:B4).

Genting's daily price trend staged a downside breakdown of its intermediate-term uptrend (See Genting's daily price trend C1:C2) on July 12. At the market close for the week on July 29, it continued to stay below its intermediate-term uptrend (C1:C2).

Its daily and weekly fast MACDs continued to stay below their respective slow MACDs at the market close last Friday. This does not augur well for its short- to intermediate-term perspectives.

Its 14-day Relative Strength Index (RSI) stood at the 36.39 per cent level. Its 14-week and 14-month RSI were at the 45.13 and 60.63 per cent levels respectively.

Following the technical breakdown on its daily (C3:C4) chart and consolidations on its daily and weekly MACDs, Genting's daily price trend is likely to remain set in its consolidation mood and re-test its immediate downside support (RM9.80 to RM10.10 levels).