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Monday, August 27, 2012

KLCC Prop ready to stage follow-through rebound

The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) hit an all-time high of 1,655.39 points last Wednesday before easing off to close at 1,648.22 at the end of the holiday-shorterend week. Its lacklustre performance stemmed mainly from the weaknesses on the US and Asian stock markets.

The benchmark index hit an intra-week and all-time high of 1,655.39 on Wednesday before slipping back to an intra-week low of 1,647.90 on Thursday, giving a trading range of 7.49 points.

The FBM KLCI recorded a week-on-week loss of 1.57 points, or 0.10 per cent.

Among other indices, the FTSE Bursa Malaysia Small Cap Index eased 73.29 points, or 0.59 per cent, to 12,308.61 while the FTSE Bursa Malaysia ACE Market Index gained 71.68 points, or 1.58 per cent, to 4,612.68.

On the foreign front, the New York Stock Exchange consolidated its recent gains last week. The Dow Jones Industrial Average shed 0.88 per cent.

The Hong Kong stock market continued to consolidate and the Hang Seng Index fell 1.14 per cent.

In Tokyo, the Nikkei 225 Index posted a week-on-week loss of 1 per cent.

Technical pullbacks in index-linked counters sent the FBM KLCI below its immediate support of 1,650 points when it closed at 1,648.22 on Friday. Selected property counters managed to outperform some of the Main Board counters last week.KLCC Property Holdings Bhd was one of these counters.

KLCC Property staged a technical rebound last week. Its daily price trend closed at RM5.65 on Friday, posting a week-on-week gain of 36 sen, or 6.81 per cent.

The following are the readings of some of the counter's technical indicators:

Moving Averages: KLCC Property's daily price trend stayed above all its 10-, 20-, 30-, 50-, 100- and 200-day moving averages.

Momentum Index: Its short-term momentum index stayed above the support of its neutral reference line last week.

On Balance Volume (OBV): Its short-term OBV stayed above the support of its 10-day moving averages.

Relative Strength Index (RSI): Its 14-day RSI had since stayed above the 50 level. Its technical reading stood at the 71.72 per cent level at the market close on Friday.


Chartwise, KLCC Property's monthly price trend staged a technical breakout of its immediate overhead resistance last week. This augurs well for its intermediate- to long-term perspectives.

Its weekly price trend staged a successful technical breakout of the neckline of its double-bottom pattern formation (see KLCC Property's weekly price chart B1:B2) last week. At the market close last Friday, it remained above its intermediate downside support (B1:B2).

KLCC Property's daily price trend traced out a stair-stepped uptrend in a technical breakout of its short-term overhead resistance (see KLCC Property's daily price trend B3:B4). It continued to stay above its intermediate-term uptrend support (B1:B2) at the end of the week.

Its daily fast MACD (Moving Average Convergence Divergence indicator ) traced out a "golden cross" of its daily slow MACD at the market close last Friday. This bodes well for its short-term perspectives.

Its weekly and monthly fast MACDs continued to stay above their respective slow MACDs.

Its 14-day Relative Strength Index (RSI) stood at the 71.72 per cent level. Its 14-week and 14-month RSI were at the 80.98 and 88.61 per cent levels respectively.

Combining the bullish technical breakouts on its weekly and daily charts (B1:B2 on its weekly chart and C3:C4 on its daily chart), KLCC Property's daily price trend is poised to stage a follow-through technical rebound, and rechallenge its immediate overhead resistance (RM5.75-RM6.00) over the intermediate term.

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

By Business Times

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