Stocks on Bursa Malaysia closed higher on continued buying interest and rotational play in selected heavyweights and lower liners. The benchmark FBM KLCI rose for the seventh consecutive days to close 2.68 points or 0.20% higher at 1363.60, after touching the intra-day high of 1368.43. Gainers outnumbered losers by 494 to 280 while 243 counters were unchanged. Volume rose to 963 million shares worth RM1.283 billion from 918 million shares worth RM1.422 billion last Friday.
The FBM KLCI opened 3.31 points higher at 1364.23 and surged to the intra-day high of 1368.43 within the first half an hour. Heavy profit-taking activities sent the key index down to the intra-day low of 1361.37 before last minute buying in selected heavyweights which lifted the index to close off low at 1363.60. The price action led to the formation of a shooting-star like Doji candlestick, which indicates heavy distribution and is a top reversal signal. However, it still requires another candle for confirmation.
MACD continued to climb higher indicating the continuation of upward momentum. RSI(14) at 72.3 continued to inch higher and is very bullish, nonetheless, it has entered the short term overbought zone, and a pull-back is expected ahead. Stochastic at 94.8 is indicating very strong market strength, has hooked down, indicating a possible correction ahead. Signals from the indicators are indicating a very bullish state of the FBM KLCI, however, it might pull-back due to the overbought conditions.
The FBM KLCI is currently above all its short, medium and long term moving averages, and the moving averages are all in an uptrend direction, indicating a very bullish state of the benchmark index. Immediate overhead resistance zone is at 1370 to 1383, while immediate support zone is at 1340 to 1350.
In view of the improved sentiments and positive news flow, the local market is expected to be active in rotational play and will continue to scale new high targeting at 1400, with intermittent profit taking correction.
Overnight, the Dow rose +208.44 points or +1.99% to close at 10,674.38. Today, the FBM KLCI is likely to trade within a range of 1353 to 1375.
This week's expected range: 1340 – 1383
Today’s expected range: 1353 – 1375
Resistance: 1368, 1371, 1375
Support: 1353, 1357, 1361
Stock to watch: WASEONG, MKLAND
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