FTSE Bursa Malaysia KLCI (.KLSE) to trade in cautious mode this week

FTSE Bursa Malaysia KLCI (.KLSE) to trade in cautious mode this week

FTSE Bursa Malaysia KLCI (.KLSE) to trade in cautious mode this week

Bursa Malaysia is likely to continue trading in cautious mode next week as market sentiment will be influenced by the ongoing negotiations in the US-China trade deal.

MIDF Research head of research Mohd Redza Abdul Rahman said the key FTSE Bursa Malaysia KLCI (FBM KLCI) would also be affected by the domestic economic and political events which are scheduled to be held in this month.

“Trading volume will likely decline as the holiday season beckons, but will likely stay above 2.0 billion shares daily, however, sentiment will likely be influenced by the outcome of the two mammoth political events organised respectively by UMNO and PKR.

“We have seen the outcome of the FBM KLCI rebalancing but with no change to the constituents of the index…we only expect much impact on the (trading) volume as was seen during the recent MSCI (Morgan Stanley Capital International) rebalancing on Nov 26,” he told Bernama.

He expected the benchmark FBM KLCI to move on a rather flattish trend in the next few weeks, with probably some window dressing activities in the last week of the month.

For the week, Mohd Redza said the local market was spooked after US President Donald Trump indicated that he is in no rush to sign the trade deal with China, and might even sign it in the run-up to his re-election campaign.

“And he has since ruffled feathers with other nations as well which has resulted in further fears amongst the investors.

“Thankfully for the index, the recovery in Tenaga Nasional Bhd’s share price (TNB: top loser last week) as well as continuation of positive vibes for the plantation stocks have led to gains in the index. Out of the 30 index stocks, 16 counters were green while 14 were in the red,” he added.

He said that the plantation stocks rose on the back on the rise in crude palm oil price as the spot price rose to above RM2,700 per tonne, higher than RM2,500-RM2,600 per tonne range seen over the past three weeks.

For the week just-ended, another dealer said Asian stock markets continued their upward momentum for most of the week, tracking the positive sentiment on the global equity markets, driven by optimism on the US-China trade deal.

Trump’s latest comment for the week that the trade talks with China are “moving right along” had lifted sentiment with investors remaining optimistic on the prospects for a US-China trade deal despite a looming deadline for the imposition of fresh import tariffs by the US.

However, he said the market would remain uncertain until Dec 15, when the US is scheduled to implement a new round of tariffs on about US$156 billion of Chinese imports.

On a Friday-to-Friday basis, the FBM KLCI rose 6.50 points to 1,568.44 from 1,561.74 previously.

On the scoreboard, the FBM Emas Index increased 40.72 points to 11,133.57, FBMT 100 Index advanced 30.40 points to 10,939.70, FBM Emas Shariah Index surged 131.47 points to 11,723.97, FBM 70 decreased 28.80 points to 13,849.08 and the FBM Ace Index jumped 130.03 points to 4,884.33.

Sector-wise, the Financial Services Index contracted 109.41 points to 15,222.21 and the Industrial Products and Services Index earned 0.11 of-a-point to 150.02, while the Plantation Index was 294.04 points higher at 7,361.31.

Weekly turnover decreased to 11.39 billion units worth RM8.09 billion from 13.17 billion units worth RM11.20 billion last week.

Main Market volume eased to 7.45 billion units worth RM7.09 billion from 8.39 billion units worth RM10.05 billion.

Warrants turnover slid to 1.27 billion units worth RM249.43 million versus 1.63 billion units worth RM316.22 million previously.

The ACE Market volume declined to 2.63 billion units worth RM748.41 million from 3.15 billion units worth RM832.85 million.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 1,589.53.

The projected upper bound is: 1,589.31.

The projected lower bound is: 1,546.59.

The projected closing price is: 1,567.95.

Candlesticks

A white body occurred (because prices closed higher than they opened).
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 24 white candles and 26 black candles for a net of 2 black candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 43.6846. This is not an overbought or oversold reading. The last signal was a buy 2 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 40.91. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 39 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 -69. This is not a topping or bottoming area. The last signal was a buy 1 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 15 period(s) ago.

Rex Takasugi – TD Profile

FTSE BURSA KLCI closed up 4.860 at 1,568.440. Volume was 37% below average (neutral) and Bollinger Bands were 22% wider than normal.

Open     High      Low     Close     Volume___
1,561.5801,569.0101,561.5801,568.440 67,750,304
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1,573.37 1,581.20 1,627.12
Volatility: 10 9 9
Volume: 100,558,456 92,881,488 112,278,408

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.

Summary

FTSE BURSA KLCI is currently 3.6% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. 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 5 periods.

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