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Tuesday, February 22, 2011

Malaysia Stock Market – End of the Day

As mentioned before, the index might be moving within the tight range formed by its 50-day and 100-day SMA for some times. Breaking either trend line will change its pattern.

Asian stock markets were lower on Tuesday, pressured by political tensions in the Middle East. In New Zealand, stocks were also pulled down by an earthquake which hit the country's second-largest city of Christchurch.

The political crisis in Libya appeared to be worsening, amid mounting violence against pro-democracy protesters, with Libyan security forces reportedly firing on demonstrators from war planes and helicopters.

The news was lifting crude oil prices with March Nymex crude at $92.83 per barrel, up $6.63 from Friday's New York close.

"Libya is the first major oil exporter to be engulfed by the crisis...it has probably doubled the additional risk premium in oil prices," to around $10 per barrel from $5 per barrel, said Capital Economics in a note; "it would be daft to rule out a spike to $140 a barrel or beyond in the coming weeks if the unrest disrupts output" in the larger oil producers in the Gulf or Iran, it adds. (WSJ)

On closing, Japanese market down by 1.78%, China 2.60%, Hong Kong down 2.11% and Singapore 1.61%.

At the local front, FBMKLCI opened with a loss of more than 7 points and sliding deeper into the red to end at 1,513.63 (+12.22/0.80%). Total Volume was 1,742m (-99m). (FBMKLCI Chart extracted from Jupiter)

Overall market sentiment progressed from bad to worst with selling across the board heavily. The Oscillator slid to end off low at -2,982.56; lost 1,965.30 when compares with its starting point. The Average recorded a loss of 2,477.69.

Conclusion

The Libya syndrome accompanied by the 6.5-magnitudes earthquake in New Zealand shakes out regional markets with some lost more than 2%, today. Though FBMKLCI lost only 12 points but the broader market was basted in total red with about 65% of the board were losers. The Oscillator of MSCD plumbed more than 3,000 points in the afternoon session - a number never encountered before since MSCD was constructed.

Today, FBMKLCI rebounded when touching its 100-day SMA. As mentioned before, the index might be moving within the tight range formed by its 50-day and 100-day SMA for some times. Breaking either trend line will change its pattern. (Chart extracted from 188OMS)

In the MSCD, K% Line (yellow) recorded as -718.01 (-319.83), D% Line (red) -434.18 (-163.54) and the Histogram -134.45 (-37.34).

After today’s trade, both key indicators fell sharply and the Histogram printed yet another longer negative bar. Technically, overall market sentiment has plumbed deep into pessimism and will take longer time to recover. However, it is also good time for us to nibble the heavily slashed bit by bit once external situation has stabilized.

"The fundamentals are still intact as the fall in the index is less than five per cent. If it is more than 10 per cent, then it can be considered a a correction," said Jupiter Securities research head, Pong Teng Siew.

He said it might be a while before a rebound takes place in view of concerns of the Middle East crisis spreading to countries with similar backgrounds.

Constructed and Written by Smartbiz (Click on chart to view)

(Note: You can read the explanation for Intra-Day MSO and MSCD from the achieves under heading "Labels" at the lower portion of the sidebar.)

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