Stocks on Bursa Malaysia ended slightly higher yesterday on expectations of a better first-quarter performance in the country's economy. The FBM KLCI drifted in a narrow range and stayed in the negative territory most of the time before last hour buying pushed it to close 3.38 points or 0.25% higher at 1344.10. Gainers led losers by 362 to 241 while 291 counters closed unchanged. Volume declined to 666 million shares worth RM934 million compare with 781 million shares worth RM1.343 billion on Tuesday.
The FBM KLCI formed a small body white candlestick with long lower shadow and closed at the highest point of the day, indicates low volatility with a positive outlook. The key index is now testing the resistance zone of 1344 to 1354, in which it has failed in its last two attempts to cross the 1350 psychological resistance level. From the waning volume, it looks like the selling pressure currently is not as strong as the previous two attempts. Hence, the key index might have a good chance to move through this resistance level.
MACD continued to move higher, albeit still below its trigger line, indicates a gradual pickup in upward momentum. RSI(14) at 59.48 continued to move higher, is still in its neutral to mildly bullish zone. Stochastic at 69.89 continued to move higher indicating the continuation of the up cycle. Positive readings of the indicators point towards a positive outlook of the FBM KLCI in the near term.
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 still has to clear the resistances at 1350 to 1354 plus and increase in trading volume to above 1 billion shares before a bull run towards 1380 can take place.
Bank Negara Malaysia is expected to release the first-quarter GDP data today together with the monetary policy statement on the Overnight Policy Rate. Foreign and local research houses had predicted the Malaysian economy will grow by between 6 and 7 per cent for the first quarter, and this may give some boost to the local market.
Today, the FBM KLCI is likely to trade within a range of 1334 to 1350
This week's expected range: 1283 – 1367
Today’s expected range: 1334 – 1350
Resistance: 1346, 1348, 1350
Support: 1334, 1336, 1340
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