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Share prices on Bursa Malaysia staged a late week rebound yesterday, its day-on-day gain of 15.24 points accounted for the major portion of its week-on-week gain of 13.20 points. The Kuala Lumpur Composite Index (KLCI) had stayed above its critical support of 900 when it closed at 909.84 points on Friday.
The KLCI opened marginally higher at 897.96 points before rebounding to close higher at 903.52 on Tuesday, with a day-on-day gain of 6.88 points, or 0.77 per cent.
Share prices on Bursa Malaysia fell back on a sharp overnight technical pullback of 381.99 points on Wednesday. The KLCI closed lower at 897.07 points, giving a day-on-day loss of 6.45 points, or 0.71 per cent.
The index reversed its earlier gains into marginal losses on Thursday. It closed off its day's low at 894.60 points, giving a day-on-day loss of 2.47 points, or 0.28 per cent.
Overall market sentiment took a turn for the better in line with the technical rebounds on the regional stock markets yesterday. The KLCI rebounded in earnest to close at the day's high of 909.84, posting a day-on-day gain of 15.24 points, or 1.70 per cent.
The Dow Jones Industrial Average (DJIA) tumbled below its critical support of 8,000 over the last three trading days. The index closed at 7,932.76 points on Thursday, recording a four-day loss of 347.83 points, or 4.20 per cent.
The Tokyo stock market failed in its bid to stay above its support of 8,000. The Nikkei 225 Index closed at 7,932.76 points yesterday, with a week-on-week loss of 297.22 points, or 3.68 per cent.
The Hong Kong stock market had managed to hold on to its technical composure in staying above its critical support of 13,000 over the last five trading days. The Hang Seng Industrial Index closed at 13,554.67 points yesterday, giving a week-on-week gain of 100.37 points, or 0.74 per cent.
The KLCI closed marginally higher at 909.84 points, giving a week-on-week gain of 13.20 points, or 1.47 per cent. The FTSE Bursa Malaysia Second Board Index gained 80.84 points, or 2.06 per cent, to the 4,005.95 level, while the FTSE Bursa Malaysia Mesdaq Index lost 68.34 points, or 2.02 per cent, to 3,307.11 level.
Following are the readings of some of its technical indicators:
* Moving Averages: The KLCI had stayed above its 10-, 20-, 30-, 50- and 100-day moving averages. It continued to stay below its longer term 200-day moving averages.
* 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 above the support of its 10-day exponential moving averages.
* Relative Strength Index: Its 14-day RSI stood at the 60.27 per cent level yesterday.
Outlook
The KLCI's follow-through rebound closed at the week's high of 909.84 yesterday, moving into the confines of this column's envisaged resistance zone (887-921 levels).
Chartwise, the index rebounded above its immediate downside support (See KLCI's weekly chart - A1:A2). It continued to stay above its resistance-turned-support trendline (A7:A8).
Its daily trend staged a successful re-test of its recently established uptrend (See KLCI's daily chart - B5:B6) before rebounding higher yesterday. It stayed above its intermediate-term downtrend (B3:B4).
The KLCI's daily fast MACD (moving average convergence divergence) staged a "golden cross" of its daily slow MACD over the last three trading days. Its weekly fast MACD continued to stay above its weekly slow MACD, while its monthly fast MACD continued to stay below its monthly slow MACD.
The KLCI's 14-day RSI stayed at 60.27 per cent level. Its 14-week and 14-month RSI stayed at 42.53 and 33.83 per cent levels respectively.
Following its technical breakout to its 17-day high, the KLCI has the technical potential of completely covering its 3.13-point gap (907.15-910.28 levels traced out on January 15).
After covering the 3.13-point gap, the KLCI has the momentum thrust in moving towards its recent resistance high of 930.
Next week, the KLCI's envisaged resistance zone hovers at the 913-947 levels, while its immediate downside support is at the 871-905 levels.
The subject expressed above is based on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.
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