FBM KLCI - 20150622Stocks on Bursa Malaysia closed higher yesterday with the local benchmark index ended higher on a rebound lifted by heavyweights led by Tenaga. Most Southeast stock markets also rose on Monday amid hopes about Greece’s debt deal after it came out with a last minute proposal to appease creditors. The FBM KLCI was 10.99 points or 0.64% better at 1,732.76, after moving between 1,720.84 and 1,735.90 throughout the day. Gainers led losers by 561 to 238, with 306 counters unchanged. Total volume decreased to 1.54 billion units, worth RM1.82 billion, from Friday’s 1.72 billion units worth RM2.42 billion.

Following the weak close on Wall Street last Friday, the FBM KLCI opened 0.15 of a point lower at 1,721.62 and slipped to the intra-day low of 1,720.84 fifteen minutes after opening. The key index rebounded strongly from the low and rallied to hit the intra-day high of 1,735.90 in the next twenty minutes, but pulled back on profit taking and then moved sideways range-bound with an upward bias for the rest of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which confirmed the bullish reversal signal issued by the bullish Harami pattern formed last Friday. Hence, the FBM KLCI is likely to continue with its upward momentum to climb higher today. Immediate overhead resistance zone is at 1,735 to 1,745, while the immediate downside support zone is at 1,720 to 1,714.

MACD continued to climb higher above the signal-line, and its histogram extended upward strongly, indicating a strong increased in momentum to the upside. RSI (14) was higher at 38.6 from 30, indicating an improvement of the short term relative strength from very bearish to bearish. Stochastic swung upward strongly to 27.1 from 17.8, indicating a strong increased in the index’s strength. Readings from the indicators showed that the momentum and strength of the FBM KLCI has improved to the upside significantly, and hence is likely to improve further.

The general trend of the FBM KLCI still remained down. However, the strong rebound yesterday has seen the key index closing above the 5, 10 and 15-day simple moving average (SMA), indicating very short term trend change from down to up. Hence, the FBM KLCI is likely to move higher to test the resistance level of 1,738-point posted by the 20-day SMA soon. Nevertheless, in order to reverse the current short term downtrend, the FBM KLCI must at least close above the 30-day SMA which is currently at 1,759-point, and to fully reverse the current medium to long term downtrend, the key index will have to move above the overhead resistance zone posted by a cluster of medium and long term moving averages with the uppermost resistance at 1,823-point.

Overnight, the Dow rose 103.83 points or 0.58% to close at 18,119.78. Today, the FBMKLCI is likely to trade within a range of 1,708 to 1,750.

This week's expected range: 1692 – 1754
Today’s expected range: 1708 – 1750

Resistance: 1738, 1744, 1750
Support: 1708, 1714, 1723




Stock pick highlight: PRIVA (0123)

20150622 - PRIVA

Last Price: RM0.31 +0.035
Support Level: RM0.275, RM0.225
Resistance Level: RM0.315, RM0.325, RM0.34, RM0.35, RM0.37, RM0.385, RM0.40, RM0.415, RM0.43, RM0.45, RM0.52
Entry Level: RM0.305 – RM0.315

Technical Analysis

PRIVA (0123) rebounded from its intra-day low of 0.275 to close higher at 0.31 after hitting the intra-day high of 0.315. Technically, the chart of PRIVA formed a bullish white candlestick with increasing volume indicating strong buying interest came into the stock yesterday. It reversed up from the consolidation forming a V-pattern reversal. MACD surged upward after making a golden-cross a day earlier but is still below the zero-line, and its histogram also extended upward strongly, indicating an increased in momentum to the upside and a buy signal. RSI (14) rose to 56.1 from 46.1, indicating the stock is turning bullish from a bearish state. Stochastic surged upward to 68.4 from 38.1 and is staying above the slow stochastic line, indicating the stock is turning strong after recent correction. The long term trend of PRIVA is up while the medium term trend is down, and the short term trend is up with the 5-day SMA making a golden-cross over the 10-day SMA but both are still below the 30-day SMA, and a confirmed breakout above RM0.315 will see an upside target of RM0.325, follow by RM0.34, RM0.35, RM0.37, RM0.385, RM0.40, RM0.415, RM0.435, RM0.45 and RM0.52.

Since the short term trend is bullish, day traders with shorter time frame perspective may ride on the short term bullishness and buy on breakout level (RM0.315). Those with lower risk appetite should wait at the side-line and buy on the dip.

Price Objective
Short Term – target price at (RM0.325, RM0.34, RM0.35 RM0.37, RM0.385), stop loss (RM0.27)
Mid Term – target price at (RM0.40, RM0.415, RM0.43, RM0.45, RM0.52), stop loss (RM0.22)


Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. The Stocks to watch is not a recommendation to buy or sell the particular stock, as it is only meant for graduates of the "Share Trading the Pro Way" course as case study. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.