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SHARE prices on Bursa Malaysia staged a sharp technical rally on the first trading day of 2009 last week. However, the Kuala Lumpur Composite Index (KLCI) continued to stay below its psychological resistance of 900 points when it closed at 894.36 on Friday.
Market sentiment improved gradually on the last two trading days of 2008 followed by a technical rally on the first trading day of the new year.
The KLCI rebounded from its intra-week low of 868.64 on Tuesday to its intra-week high of 897.26 on Friday, giving an intra-week trading range of 28.62 points in a three-day trading week.
The KLCI rebounded to close above its 50-day moving averages over the last three trading days before closing at 894.36, posting a week-on-week gain of 27.01 points, or 3.11 per cent.
On the foreign front, New York stocks staged an overhead breakout of the major psychological resistance of 9,000 points on the Dow Jones Industrial Average. The Dow closed at 9,034.69 on Friday, recording a week-on-week gain of 519.14 points, or 6.10 per cent.
The tech stock-heavy Nasdaq Composite Index managed to stay above its critical support of 1,600. The Nasdaq Composite Index closed at 1,632.21 on Friday, posting a week-on-week gain of 101.97 points, or 6.66 per cent.
In Hong Kong, the stock market had since stayed above its support of 15,000 points last week. The Hang Seng Index closed at 15,042.81 last Friday, recording a week-on-week gain of 858.67 points, or 6.05 per cent.
The Tokyo stock market staged a follow-through rebound last week. The Nikkei 225 Index closed at 8,859.56 on Friday, giving a week-on-week gain of 120.04 points, or 1.37 per cent.
On Bursa Malaysia, Asiatic Development Bhd staged a technical rebound last week. Its daily price trend closed at RM3.80 last Friday, posting a week-on-week gain of 38 sen, or 11.11 per cent.
Here are the readings of some of its technical indicators:
Moving Averages: Asiatic's daily price trend stayed above its 10-, 20-, 30- and 50- day moving averages. It continued to stay below its 100- and 200-day moving averages.
Momentum Index: Its short-term momentum index continued to stay above its neutral reference line last week.
On Balance Volume (OBV): Its short-term OBV trend continued to stay above the support of its 10-day moving averages.
Relative Strength Index (RSI): Its 14-day RSI had since stayed above the 50 level. Its technical reading stood at the 67.81 per cent level on Friday.
Outlook
Asiatic's daily price trend rebounded in tandem with the other plantations stocks, moving in sync with the rebounds of the crude palm oil last week.
Chartwise, Asiatic's monthly price trend gave back all its gain recorded in 2007. Its monthly price trend returned to the base of its 2007 before consolidating over the last two months.
Its weekly price trend found critical support of its immediate downside support (See Asiatic's weekly price trend B3:B4). Its weekly price trend is currently moving above its recently established uptrend (B3:B4).
Asiatic's daily price trend staged a technical breakout of the neckline (See Asiatic's daily price chart B1:B2) of its minor double-bottom pattern formation last Friday. It continued to trend above its short-term uptrend (B1:B2).
Its daily and weekly fast MACDs (moving average convergence divergence) continued to stay above their respective slow MACDs on Friday. Its monthly fast MACD continued to stay below its monthly slow MACD.
Its 14-day Relative Strength Index (RSI) stood at the 67.81 per cent level last Friday. Asiatic's 14-week and 14-month RSI were at the 40.05 and 39.42 per cent levels respectively.
Asiatic's daily price trend is likely to stage a follow-through rebound in staging a re-test of its immediate overhead resistance of RM4.00.
The subject expressed above is based purely on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.
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