Stocks on Bursa Malaysia traded on a mixed note yesterday. The FBM KLCI was in the negative territory most part of the day before late buying in key heavyweights lifted it to close 0.72 point or 0.05% higher at 1345.09. The key index had touched an intra-day high of 1347.61, the highest level since March 2008. Gainers led losers by 396 to 366 while 289 counters were unchanged. Volume stood at 1.134 billion shares worth RM1.648 billion.
The FBM KLCI opened with an up gap of 1.55 point and surged to the intra-day high of 1347.61, profit-taking activities sent the key index into the negative territory and touched the intra-day low of 1341.55 before last minute buying propped up the index to close back at positive territory, and formed a black spinning top candlestick on the chart. This type of price action has been happening for the last two days which indicates distribution at this level. The appearance of two spinning top candlesticks at this level also indicated that the key index is met with strong selling activities at current level and was reluctant to move further, could signaled a short term market top.
MACD continued to surge higher, indicating a continued pickup in upward momentum. RSI(14) at 75.23 is very bullish, but has tapered off, indicating the up-move is turning slow. Stochastic at 96.97 is overbought and has hooked down, forewarning a possible correction ahead. Signals from the indicators are fore-telling of possible weakness ahead.
The key index has entered the resistance zone of 1344 to 1354, and is faced with more challenges to move higher. However, the underlying short, medium and long term trend remained up.
The benchmark index may continue to consolidate while the general market may continue to be in a rotational play, 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 1336 to 1353
This week's expected range: 1297 – 1361
Today’s expected range: 1336 – 1353
Resistance: 1348, 1351, 1353
Support: 1336, 1339, 1342
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