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SHARE prices on Bursa Malaysia continued to move sideways in their bids to consolidate their recent gains over the last five trading days.
The Kuala Lumpur Composite Index (KLCI) continued to stay below its support of 900 points when it closed at 866.14 yesterday.
Lack of fresh market leads sent share prices on Bursa Malaysia lower on Monday. The KLCI closed at 855.39, giving a day-on-day loss of 11.49 points, or 1.33 per cent.
Share prices rebounded on Tuesday. The benchmark index closed at 860.18, giving a day-on-day gain of 4.79 points, or 0.56 per cent.
The KLCI eased back on lack of fresh follow-through momentum on Wednesday. It closed at 856.37, giving a day-on-day loss of 3.81 points, or 0.44 per cent.
Overall market sentiment improved on the overnight gains on Wall Street and regional stock markets on Thursday. The KLCI closed at 869.98, giving a day-on-day gain of 13.61 points, or 1.59 per cent.
The index eased back to its intra-day low of 860.70 before rebounding to close at 866.14 points yesterday, giving a day-on-day loss of 3.84 points, or 0.44 per cent.
On the foreign front, the Dow Jones Industrial Average (DJIA) re-penetrated its critical resistance of 8,000 on Monday. It closed at 8,726.61 on Wednesday, recording a three-day gain of 680.19 points, or 8.45 per cent.
The tech stock heavy Nasdaq Composite Index returned above its support of 1,500. It closed at 1,532.10 points on Wednesday, posting a three-day gain of 147.75 points, or 10.67 per cent.
The Tokyo stock market rebounded in step with the Hong Kong bourse over the last four trading days. The Nikkei 225 Index closed at 8,512.27 yesterday, posting a week-on-week gain of 601.48 points, or 7.60 per cent.
In Hong Kong, stocks rebounded in earnest with the better performances on Wall Street. The Hang Seng Index closed at 13,888.24 yesterday, recording a week-on-week gain of 1,229.04 points, or 9.71 per cent.
Back on Bursa Malaysia, the KLCI closed flat for the week, finishing at 866.14 yesterday for week-on-week loss of 0.74 point, or 0.09 per cent.
Among the other indices, the FTSE Bursa Malaysia Second Board Index fell 323.62 points, or 7.43 per cent, to 4,030.60 and the FTSE Bursa Malaysia Mesdaq index lost 82.98 points, or 2.44 per cent, to 3,322.37.
Following are the readings of some of the KLCI's technical indicators:
Moving Averages: The KLCI continued to stay below its 10-, 20-, 30-, 50-, 100- and 200-day moving averages in their bearish sequential order.
Momentum Index: Its short-term momentum index continued to stay below the support of its neutral reference line.
On Balance Volume: Its short-term OBV trend stayed below the support of its 10-day exponential moving averages.
Relative Strength Index: Its 14-day RSI stood at the 40.09 per cent level yesterday.
Outlook
The KLCI's technical pullbacks over the first three trading days saw it hitting its intra-week low of 848.03 on Wednesday, staging a successful re-test of this column's envisaged support zone (830 to 864 levels).
Its subsequent technical rebound on Thursday hit its intra-week high of 869.98, stopping short of this column's envisaged resistance zone (870 to 905 levels).
Chartwise, the KLCI continued to stay below the support of its immediate downside support (See KLCI's weekly chart - A1:A2) at the market close yesterday. It continued to stay below its intermediate-term downtrend (A7:A8) yesterday.
The KLCI's daily trend continued to stay below its intermediate-term downtrend (See KLCI's daily chart - B3:B4). Also, it continued to stay below its intermediate-term downside support (B1:B2).
The KLCI's daily fast MACD (Moving Average Convergence Divergence) indicator continued to stay precariously above the support of its daily slow MACD over the week. Its weekly and monthly fast MACDs continued to stay below their respective slow MACDs.
The KLCI's 14-day RSI stayed at 40.09 per cent level yesterday. Its 14-week and 14-month RSI stayed at 23.21 and 28.97 per cent levels respectively.
The KLCI continued to consolidate in line with this column's envisaged market direction. It staged a successful re-test of its support of 850 when it hit an intra-week low of 848.03 on Thursday. It then rebounded to close at 866.14 yesterday.
From its recent trading behaviour, the KLCI is likely to trend within rangebound activities next week. It will continue to move in unison with the swings on the regional stock markets.
Next week, the KLCI's envisaged resistance zone hovers at the 869 to 903 levels while its immediate downside support is at the 829 to 863 levels.
The subject expressed above is based on technical analysis and opinion of the writer. It is not a solicitation to buy or sell.
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