Bullish sentiments gaining traction

Global markets indices and commodities performances as at February 22.

Daily FBM KLCI chart as at February 22, 2019.

After weeks of a directionless market, the FBM KLCI finally broke above the immediate resistance level of the sideways trend at 1,702 points and closed 1.9 per cent higher in a week at 1,721.42 points last Friday.

Trading volume has increased as the New Year holiday season ends.

Last Thursday, the index closed at its highest in four months.

The bullish performance was in line with global markets performances.

The average daily trading volume last week was 3.2 billion shares as compared to 3.0 billion in the previous week. The average daily trading value increased to RM2.7 billion from RM2 billion. This shows a shift in lower-capped to higher-capped stocks.

The market trend continued to be domestically supported. Net buy from local institutions was RM356.7 million.

Net sells from foreign institutions and local retail were RM271.3 million and RM85.4 million respectively.

In the FBM KLCI, gainers beat decliners five to one. The top three gainers were Axiata Group Bhd (7.9 per cent in a week to RM4.25), Petronas Chemicals Group Bhd (6.1 per cent to RM9.03) and Genting Bhd (5.8 per cent to RM7.51).

The top three decliners were Hartalega Holdings Bhd (3.3 per cent to RM5.25), Maxis Bhd (2.1 per cent to RM5.51) and Top Glove Corporation Bhd (two per cent to RM4.83).

Global market performances were bullish. Asian market indices performances were led by Chinese markets including Hong Kong.

European and US market indices closed higher as well but UK’s FTSE100 index fell one per cent in a week.

The was weaker against major currencies last week. The index declined to 96.5 points from 96.9 points.

The Malaysian ringgit held firm against the US dollar. The ringgit closed at RM4.08 per US dollar last Friday.

Price of major commodities closed marginally higher last week. Price of (COMEX) increased 0.4 per cent in a week to US$1,330.70 an ounce last Friday. Crude oil () rose 0.8 per cent to US$66.91 per barrel.

Crude palm oil (BMD) closed almost unchanged at RM2,252 per metric ton.

The FBM KLCI broke above the immediate resistance level at 1,702 points and managed to stay above it.

The next resistance level is at 1,740 points based on the long term 200-day moving average. The immediate support level remains at 1,680 points.

Technically, the FBM KLCI is bullish as it climbs higher away from the short term 30-day moving average after staying around this level for the past few weeks.

The index remained above the Ichimoku Cloud indicator. The expanding cloud indicator indicates stronger support in the up trend.

Momentum indicators are starting to increase. The RSI and Momentum Oscillator are climbing higher after being directionless for weeks.

This shows that the bullish sentiment is gaining traction. The MACD indicator also rose above its moving average.

As we have mentioned in the previous article, the bullish trend is set to continue if the resistance level at 1,702 points is broken.

Henceforth, we expect the FBM KLCI to trend higher towards the next resistance at 1,740 points if it can stay above the immediate support level at 1,680 points.

The above commentary is solely used for educational purposes and is the contributor’s point of view using technical analysis. The commentary should not be construed as an investment advice or any form of recommendation. Should you need investment advice, please consult a licensed investment advisor.

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Source: Borneo Post Online

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