Selasa, 19 April 2011

Unit Trust. FBM KLCI Futures Set To Rebound

Some information regarding Malaysia future market. From NST Business Times. 18 April 2011

THE FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures April contract on Bursa Malaysia Derivatives closed lower at 1,519 with open interests of 20,957 contracts last week.

The April contract plunged to a new low when it fell below the support at 1,550 last week. The fall failed to arrest the selling pressure as shortists rampaged in the market. The trading band widened to 40 points, between a high of 1,554.50 and a low of 1,510.50.

Corrective pressure continued to weigh on the futures market as the spot contract raced to a low of 1,510.5 last Thursday. The spot contract has yet to make a clear break below the 1,500 support line as it remains supported above the daily lower Bollinger band.

Rejection of the high last week has permitted bearish elements to seep back into the market, igniting some concern over the medium-term range. The absence of a formidable rebound last week has pushed sideways consolidation aside, leaving behind remnants of the selling pressure. By Friday, the oscillators had already retraced to the boundary of the oversold, providing a platform for rebound play this week. 

Firm recovery signals have not been spotted on the weekly charts as the Moving Average Convergence Divergence indicator (MACD) seems to be initiating a negative crossover albeit at a slower pace. With weekly oscillators easing further from neutral territory, concerns may be reignited over a continuing dip into the oversold as momentum slows.

Tactically, the spot contract may try to rebound with renewed vigour. This may lead buying interest back into the market, as the confirmation of a negative signal is still absent from the daily MACD. For this reason, we see the spot contract remaining within the boundary of the lower and mid Bollinger lines of 1,497 and 1,537 respectively

Technical reports

The Moving Average Convergence Divergence indicator remains positive with the faster above the signal line. Both lines remain at the positive region.

The daily Relative Strength Index closed at the neutral .

The daily Commodity Channel Index finished at the neutral.

The subject expressed above is based purely on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.

Read more: FBM KLCI futures set to rebound


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