MARKET corrections over four trading days last week sent the FTSE Bursa Malaysia KLCI (FBM KLCI) to an intra-week low of 1,766.22, before staging a late-week rebound, to close at 1,788.31 yesterday.
It was indeed a volatile week of alternating between market corrections and rebounds.
The FBM KLCI’s 30 index-linked components tumbled like ten-pins over the first four trading days of the week before staging a sharp rebound yesterday.
The rebound helped to narrow intra-week losses.
The FBM KLCI hit its intra-week low of 1,766.22 yesterday, closing below its major psychological support of 1,800.
The local benchmark’s trading band over the last four trading days expanded to more than 42 points.
The FBM KLCI hit its intra-week high of 1,808.95 on Monday before consolidating to intra-week low of 1,766.22 yesterday, recording an intra-week trading range of 42.73 points.
Share prices on Bursa Malaysia continued to make intermediate-term corrections on follow-through liquidations of heavyweights on four out of the five trading days last week.
The FBM KLCI posted a week-on-week loss of 20.57 points, or 1.14 per cent.
Meanwhile, share prices on Wall Street continued to unfold follow-through consolidations.
It continued to stay below major psychological support of 17,000 points on Thursday.
The index closed at 16,117.24 points on Thursday, posting a week-to-date loss of 426.86 points.
The tech stock-heavy Nasdaq Composite Index moved in step with the market sentiment on the broader market.
It closed at 4,217.39 points on Thursday, with a week-to-date loss of 58.85 points, or 1.38 per cent.
Share prices on the Tokyo stock market tumbled over the last trading days. The Nikkei 225 Index continued to stay below its support of 15,000, closing lower at 14,532.51 points yesterday, recording a week-on-week loss of 768.04 points.
Follow-through consolidations on Bursa Malaysia sent the FBM KLCI lower on four out of the last five trading days.
The FBM Small Cap Index tumbled 777.95 points, or 4.49 per cent, to close broadly lower at 16,549.93 points.
The FBM ACE Index ended lower at 6,118.37 points yesterday, recording another week-on-week loss of 534.88 points, or 8.04 per cent, for the week ended yesterday.
Below are the readings of some of FBM KLCI’s technical indicators:
Moving Averages: The FBM
KLCI stayed below all its 10-, 20-,
30-, 50-, 100- and 200-day moving averages yesterday.
Momentum Index: Its short-term momentum index continued to stay below the support of its neutral reference line yesterday.
On Balance Volume (OBV): Its short-term OBV trend remained below the support of its 10-day exponential moving averages.
Relative Strength Index (RSI): Its 14-day RSI stood at the 31.54 per cent level at the market close yesterday.
Outlook
The FBM KLCI hit its intra-week high of 1,808.95 on Monday, failing in its bid to re-challenge this column’s envisaged resistance zone of between 1,812 to 1,846 points.
Subsequent market corrections sent the FBM KLCI lower to its intra-week low of 1,766.22 yesterday, momentarily breaching this column’s envisaged support zone (1,770 to 1,804 levels).
On the index, IHH Healthcare Bhd once again regained market leadership as the week’s top performer, with a year-to-date gain of 93 sen, or 24.09 per cent.
Bursa Malaysia’s continuing follow-through consolidations sent the FBM KLCI’s weekly price chart to stay below its major psychological support of 1,800.
It continued to stay below its revised intermediate-term uptrend support for the fifth consecutive week at market close yesterday (See FBM KLCI’s weekly chart — A1:A3).
Chartwise, the FBM KLCI’s daily price chart staged a successful re-test of its intermediate-term downside support on the last two trading day of the week (See FBM KLCI’s daily chart — B7:B8) .
The FBM KLCI had since then rebounded off its downside support (B7:B8).
The FBM KLCI’s daily, weekly and monthly fast MACDs continued to stay below respective slow MACDs yesterday.
Last week, this column commented that the FBM KLCI had an even chance of staging downside support before making a technical rebound to offset its technical imbalances. And it did.
The FBM KLCI may stage a re-challenge of its immediate overhead resistance (B5:B6). Thereafter, the index may slip into a consolidation phase to digest its recent losses.
Next week, the FBM KLCI’s envisaged resistance zone is seen between the 1,793 and 1,827 levels, while its immediate downside support is seen at the 1,750 and 1,784 levels.