Sentiment Index - Malaysia Stock Market

Constructed and Written by Smartbiz

Asian markets ended mostly higher Wednesday, supported by Italian Prime Minister Silvio Berlusconi's pledge Tuesday to resign and signs that inflation is slowing in China, raising expectations policy may be eased. (WSJ)

Market Sentiment
Local sentiment regained strength as concern on Italy debt problem eased after the proposed resignation of the Italian PM. The Oscillator was seen zigzagging in high plateau to end at +2,029.12; gained 319.22 when compares with its opening point. The Average recorded a gain of 1,666.05.

At the end of the day, %K (Yellow) of MSCD computed as +497.94 (+212.31), %D (Red) +319.01 (+107.80) and the Histogram +87.82 (+22.77).

Both indicators surged to shooting stars and the Histogram printed a longer bar.

Conclusion
Market followed regional market rally in high volume today. However, most gainers were from low liners as total volume was 2.678 bn shares but valued at 1.818 bn ringgit.

In MSCD, the firmness of all indicators indicates that investors have temporarily shrugged off concern on European woes and bid for lucrative returns on low liners. However, most analysts will tell you that when low liners were on the center stage a curtain call for a market rally is also imminent. This is also true that most activities on low liners were motivated by mere speculation. Since we do not know when will be the curtain call the best strategy to apply is “fast-in fast-out”. Just remember, never allow your greed control your deed.

The latest news said U.S. stock index futures sank tonight as a sharp jump in Italian borrowing costs reignited fears that Europe's sovereign-debt crisis is in danger of spinning out of control.

Day Pick
SEG ((earnings rose 66.3% to RM18.32 million)

Key Index

(Chart posted with courtesy of ChartNexus)

FBMKLCI finished at 1,489.64 less than 11 points from the psychological level 1,500 now. In view of the fact that most of the volume was contributed by low liners it is opined that the index would fail to break through this level again, this time.

FBMACE added another 56 points and printed a hammer. Though the index might still have the momentum to move higher but the vast advancement will also invite more profit taking. The 200MA would be a strong support.

(Note: Explanation for Intra-Day MSO and MSCD are archived under "Labels" at the lower portion of the sidebar.)