Stocks on Bursa Malaysia traded mixed last Friday, Jan 15, with the FBM KLCI advancing to test the 1300 key psychological resistance level while profit-taking activities continued to take place on stocks that has gained over the week, especially smaller cap and rubber gloves stocks. The gain in the benchmark index was help by gains in BAT, Public Bank, Tanjong plc, and Genting. There was also considerable interest in technology stocks, with MPI and Unisem among the day’s major gainers.
The benchmark FBM KLCI closed last Friday 3.8 points or 0.3% higher at 1298.58. On a week-on-week basis, the index posted 5.6 points or 0.43 % gains. Market breadth was negative with losers led gainers by 467 to 326, while 255 counters were unchanged. Daily volume was lower at 1.677 billion shares worth RM1.919 billion. Weekly volume, however, increase to 8.0142 billion shares compared with 7.1614 billion shares the week before.
On the weekly chart, the FBM KLCI formed a small white candlestick, which indicates the continuation of the upward move but was lacking in momentum as indicated by its small range. The index is facing a strong resistance at the 1300 psychological level; it tested the level on an intra-day basis but pulled back on heavy selling coming to it. The uptrend continues as the index move further up from the 10-week moving average.
Weekly MACD starts to turn up, as indicated by the shorter histogram. Weekly RSI(14) at 74.45 is in the very bullish zone and weekly Stochastic at 90 compared with 82.7 the week before indicates continuation of the bullishness.
On the daily chart, the FBM KLCI remained trapped in the sideways zone of 1288 to 1300 for the last eight days. However, it can be seen that the benchmark index is making an attempt to test the upper psychological resistance level of 1300. It tested but failed; however, it did close at the highest level since the beginning of the uptrend in April 2009 and was back to the May 2008 level. It was indeed an impressive run for the FBM KLCI.
On the indicators, they were all positive. The moving averages, MACD, RSI, and Stochastic all continued to move up, indicating the continuation of the bullish trend.
The market is expected to remain bullish this week with rotational play. The FBM KLCI is likely to re-challenge its psychological resistance zone at 1300-1305 this week. For this week, the benchmark index is likely to trade within a range of 1275 to 1315, and for today, it is likely to trade within a range of 1290 to 1305.
This week's expected range: 1275 – 1315
Today’s expected range: 1290 – 1305
Resistance: 1301, 1303, 1305
Support: 1290, 1293, 1295
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