KLCI Weekly Technical Analysis Outlook

The week started with bullish movement and ended the week on a positive note on Friday. On weekly basis KLCI moved within the range of 1600.70 to 1691.93 and ended the week in a range bound phase, closed 65.85 points positive. On Friday KLCI extended its midday losses by ending lower at 1669.45 points as investors were taking profit after the index’s rally in the past three days. The performance of our local bourse was bogged down by selling in heavy weight counters such as Sime Darby, CIMB and YTL Corp.

The FBM KLCI index lost 12.09 points or 0.72% on Friday. The Finance Index increased 0.00% to 14556.72 points, the Properties Index up 0.07% to 1160.27 points and the Plantation Index down 1.04% to 7108.62 points. The market traded within a range of 22.84 points between an intra-day high of 1684.40 and a low of 1661.56 during the session.

Market Forecast for week ahead:

We are expecting that market will continue its positive movement in coming week supported by the positive measures taken by the local government and the decision to hold on the interest rates hike by the US central bank. The market can take support at the level of 1660 and starts the positive movement from there.
Technical indicators:

RSI for this week is 44.406 with CCI at -54.943. Besides, difference line of MACD -46.884 below its signal line at -40.222.

Global factors and world Indices

• The Federal Reserve held its key interest rate locked at zero Thursday, citing worries about how the slowdown in China will hit the US economy.
• Malaysia's inflation in August likely cooled to 3.0 per cent on lower fuel prices and after the Muslim Eid al-Fitr celebrations, a Reuters poll showed on Friday.
• Ringgit was set to snap the longest run of weekly declines in more than four decades after the US refrained from raising interest rates and a rally in the price of Brent crude improved prospects for the net oil exporter.
• Malaysia's trade with China, already past the USD100 billion level, can be expanded further by looking at new products and industries, Minister of International Trade and Industry II Datuk Seri Ong Ka Chuan said.
• Malaysia construction sector is going to be hit hard if the government does not extend the status of migrant workers under the 6P programme, which will expire end of the year
• Hong Kong equities traced most Asian markets higher Friday as traders welcomed the Federal Reserve's decision to keep interest rates at record lows, while Shanghai ended another volatile week on a positive note. Hang Seng Index added 0.30 per cent, or 66.20 points, to close at 21,920.83
• China stocks ended a volatile week slightly higher on Friday, after the US Federal Reserve held off from raising interest rates citing concerns about a weak world economy. Index of the largest listed companies in Shanghai and Shenzhen rose 0.4 per cent, to 3,251.27, but was down 2.9 per cent for the week.
• The Nikkei 225 index at the Tokyo Stock Exchange dropped 1.96 per cent, or 362.06 points, to close at 18,070.21, while the broader Topic index of all first-section shares was down 1.98 per cent, or 29.53 points, at 1,462.38.
• US central bank's decision to hold off hiking interest rates sent emerging market currencies and most Asian markets advancing on Friday, as concerns eased over an outflow of cash as the global economy suffers a painful slowdown.
• Australian shares ended higher on Friday, shaking off a negative lead from Wall Street after the head of the central bank made reassuring comments about the economy.
• Bank of Japan policy makers agreed that emerging economies had suffered from weak growth but were likely to improve from a longer-term perspective, minutes of the central bank's August policy meeting.
• Gold dropped from a two-week high on Friday, giving back some of the sharp gains from the last two days, as the Federal Reserve's decision to hold US interest rates steady this week added to uncertainty over the timing of an eventual rate hike.
• Oil markets were weak on Friday as fresh signs Opec will continue to value market share over prices outweighed expectations of a lift when the United States kept interest rates at historic lows.