Stock Market Signals: A weekly column on the Main Board of the MSEB by G.M. Teoh
LAST CLOSE (March 17): 922.62 points, up 0.66 point (0.07%) from the week before. Week’s high: 927.03 points; Week’s low: 920.87 points.
The Kuala Lumpur Composite Index (KLCI) edged higher in early trading last week and then lost its positive momentum in the latter part of the week before recovering slightly to settle with small gains.
Some of the main index-linked stocks closed the week with slight gains. MISC, Public Bank, Bumiputra-Commerce and Genting finished with gains ranging from five to 25 sen and contributed a combined 2.07 points to the index.
Telekom, Maxis Communications, Petronas Gas and Plus Expressways settled with losses ranging from five to 20 sen and shaved a total 2.31 points from the KLCI.
Volume of the KLCI for the week fell to 414.77 million from 523 million shares a week ago. The average daily volume dropped to 82.95 million from 104.60 million shares.
Based on the weekly candlestick chart, the KLCI is expected to consolidate in band trading in the coming sessions. Since the index’s rebound from the 910 level some two weeks ago, the upward recovery momentum has been steady.
Chart support for this week is seen slightly higher at the 920–917 levels. The immediate-term chart outlook would stay positive if these levels are not violated.
The immediate-term chart resistance is pegged the 925–927 levels. A successful push above this chart hurdle would set the stage for a test of the minor resistance at the 930 level.
A spinning-top occurred last week. Spinning-top are candles with a small real body (as defined by the difference between the opening and closing prices). The appearance of these candles, especially after a large decline, indicates the bears are losing momentum.
The weekly indicators again ended mixed and indicated the index was at a crossroads awaiting fresh leads for the next move.
Stochastic: The weekly stochastic retained its sell signal at Friday’s close. The oscillators per cent K and D finished lower at 43.20% and 56.27% respectively. Analysis of the weekly stochastic shows the index is not out of its negative phase.
The weekly Money Flow Index (MFI) ended slightly lower at 38.19 points and showed light negative money flow occurred last week.
The 3- and 7-week exponentially smoothed moving-average price lines (ESA-lines) remained in positive divergence at Friday’s close and indicated the main trend was still bullish. The 3- and 7-week ESA-lines settled higher at 921.91 and 920.22 points respectively.
Relative Strength Index (RSI): The 9-week RSI (not shown in the chart) edged higher and ended at 57.07 points. The advancing RSI shows the index’s immediate underlying strength is positive.
Weekly moving-average convergence/divergence (MACD): The weekly MACD (not shown in the chart) closed with its positive divergence intact and continued to indicate the near-term trend was positive. The weekly MACD settled above the trigger-line and closed higher in the positive zones at 3.96 and 3.72 points respectively.
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