Stocks on Bursa Malaysia rallied to close broadly higher on positive sentiments following the 0.25% rate hike announced by Bank Negara Malaysia last Thursday, as well as the rally on Wall Street last Friday. The rate hike benefited the banking sector which comprised a large portion of FBM KLCI by weightage. The FBM KLCI opened 12.4 points higher at 1,312.18 and rallied to an intra-day high of 1325.69 before closing at 1324.44, making a strong 24.44 points or 1.88% gains. Gainers outpaced losers by 583 to 194 while 256 counters were unchanged. Volume traded rose to 1.160 billion shares worth RM2.259 billion.
Chart wise, the benchmark FBM KLCI opened with a gap above the 1308 resistance level indicating strong buying interests which overwhelm the sellers, pushing the index to 2 years fresh high, the index formed a bullish white candlestick which indicates buyers are fully in control. With the strong upward momentum, the key index may continue to move higher to test the next key resistance at 1332 and 1344.
MACD continued to move higher with a surge in the histogram indicating a strong increased in upward momentum. RSI(14) at 76.54 is very bullish, albeit in the overbought zone, it might continue to surge higher to hit the 80 mark before strong profit taking activities surface. Stochastic at 93.9 continued to stay in the very strong zone. The indicators are reflecting the very bullish sentiments of the key index.
As it was pointed out in previous reports that when the index breaks above the 1280 level, it might trigger a rally towards the 1300 level, it has come true. The short and long term trend of the index is up, while the medium term is sideway.
With the positive sentiments remained in place on positive expectation of the improving economy and the soon-to-be-unveiled new economic model, it may provide a strong catalyst for Bursa Malaysia to move higher. The key index might continue to move upward to challenge higher targets at 1332, 1344 and 1355 in weeks to come.
Today, the FBM KLCI is likely to trade within a range of 1308 to 1339.
This week's expected range: 1260 – 1330
Today’s expected range: 1308 – 1339
Resistance: 1329, 1334, 1339
Support: 1308, 1316, 1320
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