STI & KLCI Technical Analysis Outlook 16-20 March

Posted: March 20, 2015 in Stock Tips

Weekly wrap of STI: Starting of the week was sideway .stocks defied the odds, trading higher even as most Asian stocks dropped, following declines in US shares, as materials and technology companies led losses and Markets waiting for the US Federal Reserve’s policy statement due later in the session for clues to when the Fed will hike interest rates. Federal Reserve said data suggest economic growth has moderated and officials indicated interest rates will rise at a slower pace than previously estimated.SGX
Weekly Technical view on STI
Support 1: 3339
Support 2: 3325
Support 3: 3200
Resistance 1: 3456
Resistance 2: 3480
Resistance 3: 3495
Market Forecast for week ahead: The trend of market is expected to be bullish for next week. Currently we have seen unusual volatility in markets due to Federal Reserve meeting. We may see bullish really in next week trading session because it has taken rebound from 3374 and we may expect that it will reach up to 3456.STI
STRAIT TIMES WEEKLY WRAP
OPEN:3361.38
HIGH: 3417.45
LOW: 3356.66
CLOSE: 3412.44
CHANGE (In Points): +49.67
% CHANGE: 0.14%
Technical Indicators: RSI is at 57 and CCI is at 54.
Macroeconomic factors:

  • Oil touched its lowest level since 2009, dragging Asian energy shares down amid increased projections for US production. The dollar weakened from its strongest in more than a decade to major peers ahead of this week’s Federal Reserve meeting.
  • Singapore’s anti-trust regulator blocked a takeover for the first time when it provisionally ruled last week that Malaysian IHH Healthcare Bhd’s planned purchase of a local unit of India’s Fortis Healthcare would lessen competition.
  • SGX on issued a trade with caution regarding Civmec Limited, an investment holding company that provides heavy engineering and construction services to resources and infrastructure sectors in Australia.
  • Bank of Singapore said that rate hike by the Fed in September now looks more probable, with the US central bank pushing back expectations for the path of rate increases over the coming couple of years.
  • Blumont Group is planning a rights cum warrants issue to raise about $27 million in net proceeds if the rights shares are fully subscribed.
  • Oil resumed its slump after rallying from the lowest price in six years as focus returned to record supply in the US, the world’s biggest consumer.
  • Gold rose to its highest in nearly two weeks on after the U.S. Federal Reserve signalled a slower pace of interest rate hike and gave a cautious outlook for the U.S. economy.
  • The Federal Reserve opened the door to the first interest-rate increase in almost a decade, while also indicating it will go slowly once it gets started.
  • Singapore-listed Noble Group’s 30 per cent share-slump over the past month has thrust it on to the radar screens of Asian companies that want a bigger clout in global commodities trading.
  • BLACKROCK Inc, an associate of Keppel Corp, made a series of dealings on Keppel Land shares on Thursday.It purchased 7,000 shares at S$4.55 apiece and sold a total of 48,100 shares at prices ranging from S$4.53 to S$4.55 per share.
  • Singapore’s financial regulator will work with commodity exchanges, investors and producers to support the development of the city-state as a trading center, including the expansion of clearing houses in Asia.

Weekly wrap of KLCI: The week started with gap down opening. The FBM KLCI index lost 5.48 points or 0.30% on Friday. The Finance Index fell 0.40% to 15968.45 points, the Properties Index up 0.00% to 1303.7 points and the Plantation Index down 0.11% to 7802.05 points. The market traded within a range of 8.16 points between an intra-day high of 1806.90 and a low of 1798.74 during the session.
The KLCI dropped 5.48 points to end at 1803.65 points, taking cue from lower overnight closing in Wall Street. The performance of our benchmark index was dragged down by selling in banking counters.Bursa Malaysia
FBM KLCI Week’s Performance
Open: 1803.56
High: 1806.90
Low: 1798.74
Close: 1803.65
Change (Points): -18
% Change: -1.01
Market Forecast for week ahead: As per the technicality of the KLCI Index, it is expected to go up till 1820. An increase in the crude prices will lead our index to go further up, possibly till 1840 level.
Technical indicators: RSI for this week is 50.537 with CCI at 29.138. Besides, difference line of MACD -5.540 and crossed its signal line 11.385.
Weekly Technical view on KLCI
Support 1: 1780
Support 2: 1763
Support 3: 1732
Resistance 1: 1830
Resistance 2: 1860
Resistance 3: 1885
ECONOMIC FACTORS:

  • The ringgit is expected to to depreciate further to 3.95 against the dollar by September, before ending the year at RM3.82, boosting exports and trade surplus.
  • Fitch Ratings’ likely downgrade of Malaysia’s rating does not reflect the country’s true economic fundamentals, says Minister in the Prime Minister’s Department.
  • Foreign investors remain optimistic about the country’s economic and business prospects despite Fitch Ratings’ possible downgrade of Malaysia’s sovereign rating.
  • Kian Joo Can Factory Bhd and Aspire Insight Sdn Bhd have agreed to extend the deadline for the fulfillment of all conditions in regards to Kian Joo’s plan to dispose of entire business to Aspire Insight.
  • Crest Builder Holdings Bhd’s subsidiary Crest Builder Sdn Bhd has clinched a RM197.82 million contract from UDA Holdings Bhd for the construction of super-structure works of a 30-storey serviced apartments in Kuala Lumpur.
  • Malaysia Airports Holdings Bhd (MAHB) has signed a long-term concession agreement with National Aerospace and Defence Industries to support the government’s initiative to enhance the development of aerospace industry in Malaysia.
  • Petron Malaysia is expected to invest over US$1 billion (RM3.7 billion) over the next few years in the country.
  • Property developer KSL Holdings Bhd has set a dividend policy of paying a minimum of 40% of annual core net profit from operations, excluding fair value gains, to shareholders with effect from the financial year ending Dec 31, 2015.
  • Asia Brands Bhd has proposed to raise RM100 million through the issuance of 15-year Islamic notes. In a filing with Bursa Malaysia, it said proceeds will be used for syariah-compliant purposes only, including financing investments, capital expenditure, working capital and other corporate purposes.
  • IJM Corp Bhd has appointed Datuk Soam Heng Choon as its CEO and managing director effective April 6, 2015, replacing current CEO and managing director.
  • A joint initiative between the Construction Industry Development Board (CIDB) and Germany-based Bayer MaterialScience for affordable housing solutions will see lower prices for properties.
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