Stocks on Bursa Malaysia ended firmer yesterday following report of the country's strong economic growth of 10.1 per cent for the first quarter, it marked the highest first-quarter performance since 2000 which was at 11.7 per cent. The FBM KLCI rose 2.82 points or 0.21% higher to close at 1346.92. The gain was contributed mostly by Maybank. Gainers outpaced losers by 396 to 253 while 284 counters were unchanged. Volume increased to 905 million shares worth RM1.039 billion compared with 666 million shares worth RM934 million the day before.
The FBM KLCI opened 1.55 point higher and traded lower to touch the intra-day low of 1344.27 before rebounding to hit the intra-day high of 1348.09, and finally settled at 1346.92, the highest close in two years. It was in the positive territory throughout the day. The price action of the key index formed a white spinning-top candlestick which indicates indecision of the key index to move higher. The appearance of a Doji like spinning-top candlestick after five consecutive days of up move may forewarn of a possible top.
MACD continued to move higher, albeit still below its trigger line, indicating a gradual pickup of the upward momentum. RSI(14) at 61.49 continued to move higher, and has just move into the mildly bullish zone. Stochastic at 82.48, continued to surge upward and has now entered the short term overbought zone. Signals from the indicators reflected the current short term up-move of the benchmark index.
The FBM KLCI is now above all its short, medium and long term moving averages, indicating the benchmark index is in a positive mode. Nonetheless, it is now faced with the immediate strong psychological resistance level at 1350. It has to clear the resistance zone at 1350 to 1354 plus and increase in trading volume to above 1 billion shares before a bull run towards 1380 can take place.
After the announcement of the better than expected first quarter economic growth, the market will now look forward to the corporate results that will be release over the next two weeks for the direction.
Today, the FBM KLCI is likely to trade within a range of 1341 to 1351
This week's expected range: 1283 – 1367
Today’s expected range: 1341 – 1351
Resistance: 1348, 1350, 1351
Support: 1341, 1343, 1345
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