Stocks on Bursa Malaysia ended broadly higher yesterday in tandem with the rise in regional markets, aided by the better than expected US job data released last Friday, which helped to boost investors’ interest along with hopes of a sustained economic recovery. The FBM KLCI rose 5.81 points or 0.43% to close at 1341.75 after opening 3.36 points higher at 1,339.30. Gainers led losers by 403 to 322 while 289 counters were unchanged. Volume traded was higher at 1.052 billion shares worth RM1.308 billion.
The FBM KLCI rose for ten consecutive trading days with cumulative gains of over 48 points to close at the highest level in two-years. It formed a white candlestick with a small body yesterday, which indicates low volatility and consolidation. In fact, the benchmark index was trading in a narrow range of only 2.9 points throughout the day, indicating the bulls were cautious in their trades. The index may face more selling pressures at it moves into the resistance zone of 1344 to 1354.
MACD continued to move higher indicating a continuation in upward momentum. RSI(14) at 74 is very bullish and has entered the short term overbought zone. The Stochastic at 96.7 is very strong and also in the short term overbought zone.
The underlying short, medium and long term trends are all up, indicating a very bullish state of the benchmark index. However, after a continuous rise for ten consecutive trading days, the market may find an excuse to correct itself. Any short term correction should be viewed as an opportunity to accumulate quality stocks at lower price level.
Today, the FBM KLCI is likely to trade within a range of 1337 to 1345.
This week's expected range: 1297 – 1361
Today’s expected range: 1337 – 1345
Resistance: 1343, 1344, 1345
Support: 1337, 1338, 1340
Stock to Watch: WASEONG, PETRA
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