MBD Index Futures: A weekly column by G.M. Teoh
LAST CLOSE (Sept 23): 924.0 points, up 3.0 points (+0.32%) from a week ago. Week’s high: 927.0 points; Week’s low: 919.0 points.
The Kuala Lumpur Composite Index (KLCI) index futures prices on Bursa Malaysia Derivatives ended last week slightly higher after being in the doldrums for most of the week.
Traders who were bearish about the impact of Hurricane Rita sold and held on to their short positions on Friday while people who felt that support from local funds would emerge early this week ahead of the budget announcement on Sept 30 bought towards the close on Friday.
The September futures prices ended the week slightly higher at 924.0, up 3.0 points from a week ago. Prices fluctuated narrowly from 927.0 to 919.0 points. The nearby October futures prices closed at 921.5 points.
Volume for the week fell to 13,981 from 14,158 contracts a week ago. Open-interests at Thursday’s close rose to 17,262 from 16,855 contracts.
The daily candlestick chart closed the week neutral and indicated the sideways band trading would carry over into this week.
The October futures prices' immediate resistance stands at the 923.0–925.0 levels and a minor chart resistance is pegged at 928.0–932.0.
Chart support for the immediate term is seen at the 917.0–914.0 levels. Breaching of these support levels would set the course for more downside trading.
The daily and weekly oscillators closed mixed last week and indicated the sideways congestion cycle would continue.
The daily Money Flow Index (MFI): The daily MFI advanced from a week’s low of 64.70 points on Sept 20 and ended lower in the positive zones at 66.76. Analysis of the daily MFI indicates light negative money flow occurred last week. The weekly MFI closed lower at 45.96 points and indicated the momentum of the main trend was negative.
The 3- and 7-day exponentially smoothed moving-average price lines (ESA-lines) continue to show the immediate-term trend is positive. The 3- and 7-day ESA-lines ended higher at 923.0 and 922.0 points respectively.
The 3- and 7-week exponentially smoothed moving-average price lines (ESA-lines) retained their buy signal of a week ago and indicated the main trend was still constructive. The 3- and 7-week ESA-lines settled higher at 922.0 and 921.0 points respectively.
Daily stochastic: The daily stochastic triggered the short-term sell signal on Sept 22 and signalled the market was in a downcycle. The oscillators per cent K and D closed higher at 65.21% and 73.39% respectively. The weekly stochastic remains positive for the main trend. The weekly oscillators per cent K and D finished higher at 59.83% and 40.98% respectively.
Daily Moving-average convergence/divergence (MACD): The daily MACD (not shown in the chart) held on to the short-term buy signal of Sept 14 and ended slightly positive at Friday’s close. The daily MACD and the trigger-line closed the week higher in the positive territory at 0.90 and 0.69 point respectively. Analysis of the daily MACD indicates the immediate-term trend is still neutral.
The weekly MACD remained negative for the near-term trend. The weekly MACD and the trigger-line finished lower at 10.05 and 10.30 points respectively.
Daily Relative Strength Index (RSI): The 9-day RSI (not shown in the chart) edged higher from a week’s low of 53.21 points on Sept 21 and closed slightly higher in the positive zones at 56.02. Analysis of the daily RSI shows the immediate underlying strength of the market is neutral to slightly positive.
The 9-week RSI closed slightly lower at 57.25 points and signalled the near-term trend was slightly weak.
Note: G.M. TEOH will conduct a FREE technical workshop on “Trend Trading Strategies: Stocks & Futures'' in Kuala Lumpur on Oct 8. For registration and details, call 03-2093-1301 or 03-2093-2230.