Weekly Technical view on KLCI : Bursa Malaysia

Weekly wrap of KLCI:

In the whole week, market were down maintaining support level at 1805. Regionally, Asian markets were mixed, with Japanese shares reacting positively to a delayed sales-tax increase, additional stimulus and a call for election. Meanwhile, other investors weighed in on declining oil prices, the anticipation of more European monetary stimulus, and a drop in Chinese home prices.

Investor sentiment was further hit by extended losses in oil prices and China stocks beginning to lose momentum a few days after its stock-link debut.

Market remained in red territory due to overnight decline in Wall Street on fears of deflation. Investors reacted to news of China's factory output declining to a six-month low, dampening investor confidence and stoking fears that the world’s second largest economy is slowing down.

FBMKLCI WEEK’s Performance
Open	1817.15
High	1817.56
Low	1808.13
Close	1809.13
Change (Points)	-4.66
% Change	-0.25%

 The FBM KLCI index lost 13.16 points or 0.72% on Friday. Finance Index fell 0.64% to 16192.97 points, Properties Index dropped 0.62% to 1394.43 points and Plantation Index down 0.49% to 8195.37 points. Market traded within a range of 9.43 points between an intra-day high of 1817.56 and a low of 1808.13 during the session.

The KLCI closed 13.16 points lower to settle at 1809.13 points. The local bourse traded in the red for majority of the day, tracking losses in Japanese markets as Prime Minister Shinzo Abe dissolved parliament. Regionally, Asian markets were broadly positive, as investors reacted to overnight US equity gains on data showing broad U.S. economic strength.

Support 1	Support 2	Support 3	Resistance 1	Resistance 2	Resistance 3
1791	1766	1720	1824	1839	1858

 Market Forecast for week ahead:

Market is remain in red territory for last 3 weeks, it may maintain a side-way movement in the next week.

Technical indicators:

RSI for this week is 41.878 with CCI at -104.827. Besides, difference line of MACD (10.005) stood below its signal line (5.029).

ECONOMIC FACTORS:

• Bumi Armada Bhd's shares on Bursa Malaysia was down this morning, declining 2 sen to RM1.36 on the back of the weak financial results posted yesterday. A total of 2.871 million lots changed hands.
• The Consumer Price Index (CPI) increased by 2.8% to 111.3 in October 2014 compared with 108.3 in the same month last year.
• Short-term interbank rates were expected to remain stable yesterday with Bank Negara Malaysia's (BNM) intervention to absorb surplus liquidity from the financial system.
• The ringgit closed lower against the US dollar for the third consecutive days yesterday as demand for the Asian emerging currencies remained weak.
• Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives closed lower yesterday amid weaker export estimates as projected by cargo surveyors.
• The Malaysian rubber market closed mixed yesterday on lack of buying momentum and a higher benchmark at the Tokyo Commodity Exchange (TOCOM) futures market.
• AirAsia X Bhd’s results were disappointing as yield declined 12.5% following industry overcapacity and an aggressive promotional strategy.
• Inflation likely increased to an annualized 3.05% last month, according to the latest poll on the Consumer Price Index (CPI).
• Dialog Group Bhd, an integrated services provider in the oil and gas and petrochemical industries, is positive that the fluctuating global oil price will not markedly affect its businesses as it is well diversified and able to shift focus to profitable divisions.
• RHB Capital Bhd (RHBCap), Malaysia’s fourth-largest lender, saw its net profit drop marginally to RM544.6 million in the 3Q ended September from RM559.1 million a year ago.
• China made its 1st official announcement about the country’s strategic petroleum reserve (SPR) yesterday, saying the 1st phase of the government emergency stockpile is storing about 91 million barrels of crude oil, or about nine days of oil use.
• SapuraKencana Petroleum Bhd, Malaysia’s largest listed oil and gas services company by market capitalisation, is buying oil firm Petroliam Nasional Bhd’s (Petronas) entire interest in three blocks offshore southern Vietnam for US$400 million (RM1.35 billion).
• Scomi Energy Services Bhd (SESB) reported RM18.5 million net profit for its 2Q ended September 30 on the back of RM389.35 million revenue, compared with RM25.06 million net profit and RM330.3 million revenue in the previous corresponding quarter.
• Manufacturing activity in China stagnated this month, British banking giant HSBC said yesterday, warning of “significant” pressures on the world’s second-largest economy as its key purchasing managers’ index (PMI) hit a six-month low. HSBC’s preliminary PMI for the month came in at the 50.0 break-even point dividing expansion and contraction, the bank said in a statement. It was lower than last month’s 50.4 and was the weakest reading since May’s 49.4

Sector Allocation Chart

SECTOR	CHANGE	%CHANGE	HIGH	LOW
TECHNOLOGY	-0.09	-0.5	18.16	18
IND-PROD	-0.29	-0.22	133.16	132.66
TRAD/SERV	-1.63	-0.68	240.85	239.34
CONSTRUCTN	-0.41	-0.14	301.22	299.55
MINING	-4.05	-0.74	547.13	539.03
CONSUMER	-0.24	-0.04	579.79	577.05
PROPERTIES	-8.67	-0.62	1,404.72	1,394.43
INDUSTRIAL	-2.86	-0.09	3,282.69	3,265.50
PLANTATION	-40.46	-0.49	8,245.20	8185.75