KLCI still in holding pattern

Stock Market Signals: A weekly column on the Main Board of the MSEB by G.M. Teoh 

LAST CLOSE (Oct 6): 970.98 points, up 3.23 points (0.33%) from the week before. Week’s high: 971.22 points; Week’s low: 963.52 points. 

The Kuala Lumpur Composite Index (KLCI) recovered from an earlier round of weakness and inched higher to settle Friday at its best level so far this year. 

Key index-linked stocks closed the week mixed with Bumiputra-Commerce and Genting providing the bulk of the KLCI's gains. 

Bumiputra-Commerce and Genting ended the week with gains of 20 sen and RM1.15 respectively and supported the index by a combined 2.63 points. Maybank, Tenaga Nasional, IOI Corp, Plus Expressways and Astro closed with small gains and added a total 1.86 points to the KLCI. 

Telekom, Public Bank, Petronas Gas, British American Tobacco and Digi.Com settled lower and erased a combined 1.88 points from the index. 

Volume of the KLCI for the week fell to 446.53 million from 496 million shares the week before. The average daily volume declined to 89.3 million from 99.2 million shares. 

The weekly candlestick chart closed with a positive setting. There were three white candles in the past three weeks and the steady upward pattern indicates the main trend is still constructive. 

So far, the index has failed to develop depth and an aggressive bullish character. Market outlook for this week is expected to remain neutral to slightly positive. The short-term trend is expected to remain in gradual sideways roll while players await fresh impetus for the next big move. 

Chart support for this week is unchanged from a week ago at the 965–960 levels. Fresh downward pressure would be generated if these levels are breached. 

Chart resistance for this week is revised slightly higher to 975–980. 

The weekly indicators ended mildly positive and indicated the immediate-term cycle was bullish. 

Stochastic: The weekly stochastic held on to its buy signal at Friday’s close and signalled the index was still in a positive cycle. The oscillators per cent K and D closed the week higher at 88.04% and 77.43% respectively. 

The weekly Money Flow Index (MFI) closed slightly higher last week and ended in the overbought territory at 87.47 points. Analysis of the weekly MFI indicates light accumulation occurred last week. 

The 3- and 7-week exponentially smoothed moving-average price lines (ESA-lines) remained constructive for the near-term trend. The 3- and 7-week ESA-lines settled slightly higher at 967 and 960 points respectively. 

The daily ESA-lines stayed positive for the immediate-term trend. The week finished with the 3-day ESA-line above the 7-day ESA-line at 969 and 967 points respectively. 

Relative Strength Index (RSI): The 9-week RSI (not shown in the chart) ended higher in the overbought territory 72.31 points. Analysis of the weekly RSI indicates the immediate underlying strength of the index is still positive. 

Weekly moving-average convergence/divergence (MACD): The weekly MACD (not shown in the chart) ended positive for the near-term trend.  

The weekly MACD closed above the trigger-line and settled higher at 10.59 and 9.68 points respectively. 

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