Stocks on Bursa Malaysia rebounded to close higher yesterday in tandem with regional bourses after Monday’s sell-off caused by the Goldman Sachs suit. The FBM KLCI rose 9.23 points or 0.7% to close at 1335.90. Gainers outpaced losers by 456 to 230 while 293 counters were unchanged. Volume traded was lower at 796 million shares worth RM1.218 billion.
Chart wise, the FBM KLCI formed a bullish white Marubozu candlestick which confirmed the reversal signal issued by the hammer candlestick formed on Monday. With the bullish move yesterday, the benchmark index might continue to move higher to re-challenge the overhead resistance zone at 1340 to 1354. If the index is able to breakthrough the psychological resistance at 1350, it might move on to challenge the next target level at 1380.
MACD continued to move lower, but on a slower pace as shown by the first shorter histogram, indicating a slow down of the downward momentum. RSI(14) at 59 hooked up sharply, is mildly bullish. Stochastic at 47.4 continued to move lower, indicating the down cycle is not over yet. Mixed signals from the indicators indicated that the key index is still in the consolidation.
Short term, the key index might continue to move sideways in a trading range. The medium to longer term trend, however, remained up.
Today, the FBM KLCI is likely to trade within a range of 1325 to 1342.
This week's expected range: 1308 – 1358
Today’s expected range: 1325 – 1342
Resistance: 1338, 1340, 1342
Support: 1325, 1327, 1331
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