Weekly Technical View on KLCI - 25 July 2016

Weekly Wrap of KLCI

In the entire week the market breath was negative. It closed in the green on Monday followed by four red candles. On the last day of the week market gained little momentum observing little recovery in the counters. US allegations of massive fraud at state investment fund 1MDB wherein US authorities moved to seize more than $1bn (£761m) in assets related to the fund has been the major reason of the market being bearish.

Forecast for week ahead:

The FBMKLCI opened at the level of 1656 on Friday and closed in the red at level of 1657. The trading session on Friday saw a low of 1651; The market traded within a range of 7.86 points between an intra-day high of 1659.76 and a low of 1651.90 during the session.


In the coming week market could complete its rounding bottom pattern and if it happens it is expected to test the resistance level of 1671 and could go upto the level of 1689. On the other side if the market breaches the support level of 1648 it might go further down to the level of 1638. In the coming days traders would remain cautious regarding the 1MDB issue and would trade accordingly.

Technical indicators:

RSI for this week is 48.954 with CCI at -12.311 Besides, difference line of MACD -8.158.

Counter-Specific News:

•     The KL118 skyscraper project, also known as Menara Wawasan, is ongoing, said UEM Group Bhd chairman Tan Sri Ahmad Tajuddin Ali.
•     Dancomech Holdings Bhd, which made its debut on the Main Market of Bursa Malaysia yesterday, is eyeing sales growth of up to 20% in the next three to five years, pinning its hopes on a recovery in prices of crude palm oil (CPO) and oil and gas (O&G) going forward.
•     Scomi Engineering Bhd yesterday issued a notice of arbitration against Prasarana Malaysia Bhd to resolve the dispute between them in relation to the termination of the RM494 million Kuala Lumpur monorail fleet expansion project.
•     Petroliam Nasional Bhd (Petronas) awarded a production sharing contract (PSC) to PTTEP HK Offshore Ltd, KUFPEC Malaysia (SK-410B) Ltd, and Petronas Carigali Sdn Bhd for exploration Block SK410B at a signing ceremony yesterday.
•     Malayan Banking Bhd (Maybank) expects lower double-digit growth in its credit card billings and receivables this year as consumers are more prudent on spending. It aims to maintain a 15% growth in its credit card base this year.
•     Mercedes-Benz Malaysia Sdn Bhd delivered a record 6,017 cars to customers in the six-month period ended June 2016, registering a growth of 17% compared with the same period last year.

Global factors and World Indices:

•     Hong Kong shares finished down on Friday as Asian shares slid after weak corporate earnings halted Wall Street's record run. Hang Seng index fell 0.2 per cent, to 21,964.27, while the China Enterprises Index lost 0.3 per cent, to 9,031.93 points.
•     Tokyo shares closed lower Friday as a rebounding yen hit exporters, but Nintendo rose again as the hugely popular Pokemon Go app launched in Japan, its home market. Nikkei 225 index fell 1.09 per cent, or 182.97 points, to close at 16,627.25
•     Asian stocks pulled back from an eight-month high and the yen held gains as prospects for central bank stimulus cooled in Japan. Malaysia's ringgit fell to this month's low, while the yuan strengthened.
•     The Dow's six-day streak of records ended Thursday as US stocks tumbled, pulled down in part by disappointing earnings reports from Dow members Intel and American Express.
•     Gold headed for a second weekly decline as investors weighed comments from the European Central Bank and the Bank of Japan on the outlook for stimulus measures.
•     Oil prices were lower on Thursday and markets were relatively quiet as investors showed caution due to persistent global oversupply.
•     Crude dropped a dollar to US$44.75 a barrel.
•     Brent was down 97 US cents at US$46.20 a barrel.

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