Technically Speaking by S.N.LOCK - Article from Business Times
SHARE prices on Bursa Malaysia consolidated lower in lack lustre trading over the last four trading days. The Kuala Lumpur Composite Index (KLCI) continued to stay below its support of 900 points when it closed at 867.35 yesterday.
The KLCI opened at 876.88 before rebounding to its intra-day high of 888.03. It eased back all the way to close at 867.35 on Monday, giving a day-on-day loss of 2.97 points, or 0.34 per cent. Share prices on Bursa Malaysia opened at overnight levels before drifting lower on Tuesday. Last hour trading sent the KLCI back up to close at 871.16, giving a day-on-day loss of 2.27 points, or 0.26 per cent.
The index extended its follow-through consolidation for the third consecutive days on Wednesday. It closed at 869.62 points, giving a day-on-day loss of 1.54 points, or 0.18 per cent. The composite index continued to drift aimlessly immediately after the Christmas holiday. It closed at 867.35 yesterday, giving a day-on-day loss of 2.27 points, or 0.26 per cent.
On the foreign front, the Dow Jones Industrial Average (DJIA) extended its follow-through consolidations over the last three trading days. The DJIA closed at 8,468.48 points on Wednesday, giving a three-day loss of 110.63 points, or 1.29 per cent.
The tech stock heavy Nasdaq Composite Index continued to stay above its critical support of 1,500. It closed at 1,524.90 points on Wednesday, giving a three-day loss of 39.42 points, or 2.52 per cent. Tokyo stocks continued to hold on to its technical composure over the last four trading days. The Nikkei 225 Index closed at 8,739.52 points yesterday, giving a week-on-week gain of 151.00 points, or 1.76 per cent.
The Hong Kong stock market breached its support of 15,000 over the last three trading days. The Hang Seng Index closed at 14,184.14 points on Wednesday, posting a week-on-week loss of 943.37 points, or 6.24 per cent.
Back on Bursa, the KLCI closed at 867.35 points yesterday, giving a week-on-week loss of 9.05 points, or 1.03 per cent. The FTSE Bursa Malaysia Second Board Index added 5.98 points, or 0.15 per cent, to 3,992.86 level while the FTSE Bursa Malaysia Mesdaq Index gained 160.22 points, or 4.90 per cent, to 3,430.70 level.
Following are the readings of some of the KLCI's technical indicators:
Moving Averages: The KLCI continued to stay above its 10-, 20- and 30-day moving averages while it continued to stay below its 50-, 100- and 200-day moving averages.
Momentum Index: Its short-term momentum index continued to stay precariously above the support of its neutral reference line.
On Balance Volume (OBV): Its short-term OBV trend stayed above the support of its 10-day exponential moving averages.
Relative Strength Index (RSI): Its 14-day RSI stood at the 49.29 per cent level yesterday.
SHARE prices on Bursa Malaysia consolidated lower in lack lustre trading over the last four trading days. The Kuala Lumpur Composite Index (KLCI) continued to stay below its support of 900 points when it closed at 867.35 yesterday.
The KLCI opened at 876.88 before rebounding to its intra-day high of 888.03. It eased back all the way to close at 867.35 on Monday, giving a day-on-day loss of 2.97 points, or 0.34 per cent. Share prices on Bursa Malaysia opened at overnight levels before drifting lower on Tuesday. Last hour trading sent the KLCI back up to close at 871.16, giving a day-on-day loss of 2.27 points, or 0.26 per cent.
The index extended its follow-through consolidation for the third consecutive days on Wednesday. It closed at 869.62 points, giving a day-on-day loss of 1.54 points, or 0.18 per cent. The composite index continued to drift aimlessly immediately after the Christmas holiday. It closed at 867.35 yesterday, giving a day-on-day loss of 2.27 points, or 0.26 per cent.
On the foreign front, the Dow Jones Industrial Average (DJIA) extended its follow-through consolidations over the last three trading days. The DJIA closed at 8,468.48 points on Wednesday, giving a three-day loss of 110.63 points, or 1.29 per cent.
The tech stock heavy Nasdaq Composite Index continued to stay above its critical support of 1,500. It closed at 1,524.90 points on Wednesday, giving a three-day loss of 39.42 points, or 2.52 per cent. Tokyo stocks continued to hold on to its technical composure over the last four trading days. The Nikkei 225 Index closed at 8,739.52 points yesterday, giving a week-on-week gain of 151.00 points, or 1.76 per cent.
The Hong Kong stock market breached its support of 15,000 over the last three trading days. The Hang Seng Index closed at 14,184.14 points on Wednesday, posting a week-on-week loss of 943.37 points, or 6.24 per cent.
Back on Bursa, the KLCI closed at 867.35 points yesterday, giving a week-on-week loss of 9.05 points, or 1.03 per cent. The FTSE Bursa Malaysia Second Board Index added 5.98 points, or 0.15 per cent, to 3,992.86 level while the FTSE Bursa Malaysia Mesdaq Index gained 160.22 points, or 4.90 per cent, to 3,430.70 level.
Following are the readings of some of the KLCI's technical indicators:
Moving Averages: The KLCI continued to stay above its 10-, 20- and 30-day moving averages while it continued to stay below its 50-, 100- and 200-day moving averages.Momentum Index: Its short-term momentum index continued to stay precariously above the support of its neutral reference line.
On Balance Volume (OBV): Its short-term OBV trend stayed above the support of its 10-day exponential moving averages.
Relative Strength Index (RSI): Its 14-day RSI stood at the 49.29 per cent level yesterday.
Outlook
The KLCI's brief technical rebound hit its intra-week high of 888.03 on Monday, moving into the confines of this column's envisaged support zone (879 to 913 levels).
Subsequent technical pullbacks sent the index to its intra-week low of 862.29 on Wednesday, staging a re-test of this column's envisaged support zone (839 to 873 levels).
Chartwise, the composite index continued to stay below the support of its immediate downside support (See KLCI's weekly chart - A1:A2) for the sixth consecutive week. It continued to stay below its intermediate-term downtrend (A7:A8) yesterday.
The index's daily trend continued to stay below its intermediate-term downtrend (See KLCI's daily chart - B3:B4). It continued to stay below its intermediate-term downside support (B1:B2). The KLCI's daily and weekly fast MACDs (moving average convergence divergence) continued to stay above the support of their respective slow MACDs at the market close yesterday. Its monthly fast MACD continued to stay below its slow MACD.
The composite index's 14-day RSI stayed at 49.29 per cent level yesterday. Its 14-week and 14-month RSI stayed at 29.36 and 29.10 per cent levels respectively. The KLCI staged a failed attempt in trying to take out the resistance of its 50-day moving averages. A decisive break of the 50-day moving averages is likely to signal a major trend reversal. Until then, it will continue to consolidate within range-bound trading activities.
As it turned out, the traditional year-end window-dressing rally seemed to have run out of steam. With that, the KLCI will continue to consolidate within range-bound activities. Next week, the KLCI's envisaged resistance zone hovers at the 870 to 904 levels while its immediate downside support is at the 830 to 864 levels.
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