Stocks on Bursa Malaysia rebounded last week after one week of profit-taking and consolidation on the previous week. The FBM KLCI rebounded in tandem with regional bourses as the Dow continued to move higher, and buying interest was spurred by the positive sentiments ahead of the Invest Malaysia 2010 conference and the unveiling of the New Economic Model at month end.
The FBM KLCI added 18.54 points or 1.43% week-on-week to 1315.14 from 1296.60 the previous Friday. Turnover for the week rose to 5.214 billion shares worth RM7.983 billion from 3.437 billion shares worth RM5.716 billion the previous week.
On the weekly chart, the FBM KLCI formed a bullish engulfing candlestick which indicated a strong reversal of the benchmark index after a week of correction. The index is expected to stage a follow through rebound this week to re-test the overhead resistance zone at 1318 to 1334.
The weekly MACD continued to move higher with the histogram turning shorter, indicating a pickup in weekly momentum, albeit the MACD is still below its slow MACD. Weekly RSI(14) at 67 has hooked up and remained in the bullish zone. Weekly Stochastic has, however, hooked down reflecting the correction mode. The indicators giving mixed signals indicated the current consolidation mode with an upward bias.
With The FBM KLCI continued to stay above the 5-week moving averages, the short term trend is up; the medium term trend as indicated by the 10-week MA which is flat, is sideways, while the long term trend as indicated by the 30-week MA remained up.
This week, the benchmark FBM KLCI may move higher on positive expectation of good news from the NEM, however, the market may profit take after the news is released.
The FBM KLCI may trade within a range of 1277 to 1339 this week, and for today it is likely to trade within a range of 1311 to 1320.
This week's expected range: 1277 – 1339
Today’s expected range: 1311 – 1320
Resistance: 1317, 1318, 1320
Support: 1311, 1312, 1313
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