Daily FBM KLCI chart as at June 19, 2019
The market was bearish in the past one week on falling commodities prices especially crude oil and directionless markets performances in the region. However, the FBM KLCI staged a rebound last Friday and this indicates some support.
The FBM KLCI declined 0.8 per cent in a week to 1,669.45 points last Friday.
Trading volume increased significantly last week but more retail activity. The average daily trading volume has increased to 3.2 billion shares last week from 2.7 billion shares the week before. The average daily trading value fell to RM1.9 billion from RM2 billion. This indicates more lower-capped stocks, which are favoured by the retail market, were being traded.
The retail market was net buyer while both local and foreign institutions were net sellers. Net buy from local retail was RM57.9 million. Net sells from local and foreign institutions were RM51.0 million and RM6.9 million respectively.
In the FBM KLCI, decliners outpaced gainers two to one. The top three gainers were Press Metal Dialog Group Bhd (3.9 per cent in a week to RM3.51), Genting Malaysia Bhd (2.1 per cent to RM3.36) and Maxis Bhd (1.2 per cent to RM5.70).
The top three decliners were Petronas Chemicals Group Bhd (7.2 per cent to RM7.81), Axiata Group Bhd (1.9 per cent to RM5.08) and Malaysia Airports Holdings Bhd (1.8 per cent to RM8.60).
Market indices performances in Asia were mixed. In Europe, most major markets indices closed lower. The UK’s FTSE100 index was firm while the US Dow Jones Industrial Average pulled back to close marginally lower after climbing to historical highs.
The US dollar has slightly strengthened against major currencies. The US dollar Index slightly declined to 97.1 points from 96.7 points two weeks ago. The US dollar index has been directionless in the past few weeks. The Malaysian ringgit was firm against the US dollar at RM4.11 last Friday.
In the commodities market, crude oil (Brent) fell 6.5 per cent in a week to US$62.65 per barrel last Friday. Gold rose 0.6 per cent to US$1,426.50 an ounce on uncertain equity markets performances. However, crude palm oil (BMD) snapped a three-week decline and increased 1.5 per cent in a week to RM1,974 per metric tonne.
The FBM KLCI is slightly below the immediate support turned resistance level at 1,670 points. The index rebounded form the current support level at 1,657 points. Next technical support and resistance levels are at 1,600 points and 1,690 points.
Technically, the FBM KLCI trend is bearish. The index failed to stay above the long term 200-day moving average after testing it in the past two weeks and pulled back to close below the short term 30-day moving average. However, the FBM KLCI is above the Ichimoku Cloud and the support level is at 1,630 points.
Momentum indicators continued to decline and this indicates that the short-term bearish momentum is gaining strength. The RSI and Momentum Oscillator indicators are declining and are near their mid-levels. Furthermore, the MACD remained below its moving average.
Market confidence is still weak. However, the market found immediate support at 1,657 points as it rebounded from this level last Friday. The FBM KLCI is expected to stage a technical rebound as it is near the support level. If it can stay above 1,657 points. However, a bigger correction may start if the support level at 1,657 points is broken.
The above commentary is solely used for educational purposes and is the contributor’s point of view using technical al analysis. The commentary should not be construed as investment advice or any form of recommendation. Should you need investment advice, please consult a licensed investment advisor.
Global markets indices and commodities performances as at June 19, 2019