Regional bourses remained on a mixed trend with Japan's
Nikkei 225 surging 292.93 points to 10,688.11 while Hong Kong's Hang
Seng dropped 67.51 points to 23,331.09. Singapore's Straits Times eased
one point to 3,223.80.
On the local front, the Industrial Index
rose 19.44 points to 2,814.34, the Plantation Index improved 23.44
points to 8,255.19 and the Finance Index edged up 5.56 points to
15,341.36.
The FBM Emas Index increased 5.78 points to 11,485.90,
the FBMT100 rose 2.71 points to 11,340.65, the FBM Mid 70 Index
improved 17.33 points to 12,439.6 and the FBM Ace Index advanced 33.06
points to 4,259.77.
Total volume increased to 1.256 billion units
valued at RM1.688bil compared with Thursday's close of 1.128 billion
shares worth RM1.825bil. - Bernama
Lower liners likely to hog the limelight
REVIEW:
Bursa Malaysia kicked off the last day of 2012 on the negative side,
with the FBM Kuala Lumpur Composite Index (FBM KLCI) shedding 2.93
points to 1,678.40, as profit-taking activity set in following a series
of uptrend.
The overall market sentiment was pretty cautious,
depressed by an extended fall in Wall Street overnight, as the White
House and US lawmakers closed in on the “fiscal cliff” deadline with no
deal in sight.
A pullback in most major Asian markets on profit-taking activity during the holiday season lull added to the downbeat note.
Given
the dearth of fresh market-stimulating leads on the horizon, the local
bourse succumbed to light liquidation to flirt in the red zones, but
within a narrow range.
And that was the trend from the opening
bell until the last minute, where buying in select heavyweights emerged
suddenly to help the market reversed early weaknesses to end 2012 at a
new record of 1,688.95, up 7.62 points on Monday.
World markets
including Bursa Malaysia were shut on Tuesday for the New Year. While
all of us were enjoying the holiday, optimism about the immediate
direction of risky assets grew stronger, because a settlement in the
“fiscal cliff” crisis in the US fuelled bullish sentiment across
markets.
As expected, stocks in the region resumed business on solid grounds, with major Hang Seng Index leading the way, up nearly 3%.
Usually,
the local bourse would mirror the offshore pattern, but in an
unprecedented move, blue-chip counters reversed trend, as local
institutional players opted to book profit from recent spikes.
Unlike
the quality issues, non index-linked companies were mostly steady on
greater retail participation and the two-tier market was clearly shown
on the score card.
In spite of the FBM KLCI dropping 14.23 points to 1,673.72, winners beat decliners by 373 to 335 in mid-week.
Come
Thursday, global equities sustained the upward thrust and the bulls on
the domestic front took the opportunity to strike back.
Blue chips topped the gainers list while second and lower liners dominated the active page.
On the back of the better sentiment, the key index hit a new all-time high of 1,692.25, up 17.93 points that day.
It
scaled another new peak of 1,699.68 in early session yesterday before
retreating to close down 0.07 point to 1,692.58 owing to an apparent
profit-taking activity.
Statistics: Week-on-week, the key index rose 11.25 points, or 0.7% to 1,692.58 yesterday, against 1,681.33 on Dec 28.
Total
turnover for week ballooned to 4.093 billion units valued at
RM6.020bil, compared with 2.920 billion shares worth RM3.941bil done
previously.
Technical indicators: After triggering a sell
at the overbought area in mid-week, the oscillator per cent K and the
oscillator per cent D of the daily slow-stochastic momentum index
weakened further to finish at the 66% and 73% respectively.
Likewise, the 14-day relative strength index retraced slightly from the top to end at the 69 points level.
In
stark contrast, the daily moving average convergence/divergence (MACD)
histogram continued to surge steadily, in tandem with the daily trigger
line to keep the bullish signal.
Weekly indicators remained positive, with the weekly MACD and the weekly slow-stochastic momentum index keeping the buy call.
Outlook:
Bursa Malaysia extended the upward momentum for the fifth consecutive
week, largely due to “window-dressing” activity and funds taking fresh
positions, as well as re-balancing their portfolios, with gains in the
quality issues propelling the FBM KLCI higher to set a new record almost
on a daily basis. The “fiscal cliff” resolution in the United States
also aided local sentiment to some extent.
Based on the daily
chart, the local bourse is bullish and it will remain so, as long as the
key index continues to flirt inside the newly-established upward
channel and supported by the rising 14-day and 21-day simple moving
averages.
However, investors should take note that the local
market has chalked up a total of 109.01 points, or 6.9% over the past
five weeks and the bulls are starting to look tired. The next logical
move would be to pause for air before resuming their rally later.
While
we expect blue chips to correct in the short-term to avoid overheating,
second and lower liners, a favourite for retail investors, are showing
signs that they are ripe for a rally.
Technically, the daily and
weekly MACDs are promising, but given the overbought condition, the
local market is likely to consolidate, probably within a tight range
this week.
Resistance is expected at every 20- or 30-point intervals above the 1,700-point psychological barrier.
Important support is pegged at the 1,680 points, followed by the 1,670 points and the next, at the 1,660-point mark.
MARKET TREND By K.M. LEE
Related post:
FBM KLCI hits all-time high; Bulls set to explore uncharted territory