Stocks on Bursa Malaysia ended mixed yesterday with the benchmark index bucking regional trends on late buying of selected heavyweights by local funds. The FBM KLCI closed 4.67 points or 0.36% higher at 1,311.75, after opening 1.11 point lower. Losers led gainers by 307 to 275 while 272 counters were unchanged. Volume dropped to 539 million shares worth RM919 million compared with 622 million shares valued at RM970 million on Tuesday.
The FBM KLCI opened 1.11 point lower at 1305.97 and was drifting in the negative territory for most part of the day in a tight range. Buying interest surfaced in late afternoon pushed the benchmark index back to positive territory, and a last minute buying of selected heavyweights helped pushed the index to close near the high of the day. The price action of the key index formed a bullish white candlestick that closed at the high of the day, indicating buyers were in control, hence, the index is expected to move higher today. The key index has now closed above the 5-day moving average (MA), indicating a change in the immediate short term trend from down to up. The key index, however, is still below the 10 and 60-day MA which will post as a resistance to the up move.
MACD continued to move lower but has tapered off, and its histogram has turned shorter, indicating a slow down in the downward momentum and a possible change in direction. RSI(14) at 51 continued to move higher and is back into the mildly bullish zone. Stochastic at 26 has turned up but is still below its slow Stochastic, giving an early signal to the possible end of the current short term down cycle. Signals from the indicators point to a possible change in the short term trend of the benchmark index from down to up.
The FBM KLCI is reversing its immediate short term trend from down to up, nonetheless, it is capped with an immediate overhead resistance zone at 1315 to 1320. Immediate support zone is at 1295 to 1300.
In view of a lack of market moving factors locally, the key index is expected to continue taking cue from the performance of regional bourses. Overnight, the Dow closed +274.66 or +2.82% higher at 10,018.28. Today, the FBM KLCI is likely to trade within a range of 1299 to 1320.
This week's expected range: 1260 – 1341
Today’s expected range: 1299 – 1320
Resistance: 1315, 1318, 1320
Support: 1299, 1302, 1307
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