FTSE Bursa Malaysia KLCI (.KLSE) stages mild rebound as KLCI closes at 1,500
Some mild buying of Tenaga, Maybank and IHH Healthcare on Tuesday after the selldown the previous day enabled the key FBM KLCI to close above the key 1,500 level.
At 5pm, the KLCI was up 10.82 points or 0.73% to 1,500.88 but this was just one-fourth of the losses the previous day after the collapse of the Pakatan Harapan (PH) government and resignation of Tun Dr Mahathir Mohamad as prime minister.
Reuters reported Dr Mahathir was proposing to lead a unity government and has invited lawmakers from across rival political parties to join.
Quoting sources, Reuters reported Dr Mahathir proposed the idea of a grand coalition to leaders of the major political parties he met on Tuesday morning, including those from the disbanded PH and the parties they defeated in the 2018 election.
Meanwhile, turnover on Bursa was 3.13 billion shares valued at RM2.75bil. Evidence of an uptick in investor sentiment was reflected in the broader market where advancers beat decliners 531 to 380 while 407 counters were unchanged.
Most key Asian markets except Japan, which opened on Tuesday, chalked up some gains as selling pressure and anxieties over the Covid-19 coronavirus ebbed. The Nikkei 225 tumbled 3.34% and Shanghai Composite lost 0.6% but Hang Seng Index added 0.27%, Kospi 1.18% and Singaore’s STI 0.51%.
Crude palm oil tumbled RM88 to RM2,455 per tonne to enter a bear market. It fell 22.2% from a high of RM3,134 on Jan 10.
Among the plantations, Sime Plantation rose six sen to RM4.96, KL Kepong four sen to RM22.24 but PPB Group lost four sen to RM17.90 and IOI Corp five sen to RM4.25.
US light crude oil fell six cents to US$51.37 but Brent gained seven cents to US$56.37.
Petronas Dagangan fell 20 sen to RM21.40, Petronas Gas lost 10 sen to RM16.40 but Petronas Chemicals gained four sen to RM6.40 and Dialog three sen to RM3.35.
The ringgit fell against major currencies, down 0.17% against the US dollar ro 4.2338; down 0.59% versus the pound sterling to 5.4937; lost 0.53% to the euro to 4.5987 and weakened 0.45% against the Singapore unit to 3.0283.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 1,560.58.
The projected upper bound is: 1,533.79.
The projected lower bound is: 1,465.31.
The projected closing price is: 1,499.55.
A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 black candles.
A piercing line occurred (which indicates that prices moved down on the previous bar, opened even lower, but then closed significantly higher). This implies strength as the momentum appears to be shifting from the bears to the bulls. Note that the higher the close of the white candle (relative to the black candle), the more bullish the Piercing Line pattern.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 20.2238. This is not an overbought or oversold reading. The last signal was a buy 0 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 31.36. This is not a topping or bottoming area. However, the RSI just crossed above 30 from a bottoming formation. This is a bullish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 0 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -222.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 15 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 1 period(s) ago.
Rex Takasugi – TD Profile
FTSE BURSA KLCI closed up 10.820 at 1,500.880. Volume was 62% above average (neutral) and Bollinger Bands were 3% wider than normal.
Open High Low Close Volume___
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1,529.20 1,569.22 1,601.59
Volatility: 17 14 10
Volume: 131,548,048 115,909,080 112,074,800
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FTSE BURSA KLCI is currently 6.3% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume out of .KLSE (mildly bearish). Our trend forecasting oscillators are currently bearish on .KLSE and have had this outlook for the last 21 periods.