Stocks on Bursa Malaysia closed mixed yesterday with the benchmark index rebounded to surpass the 1,400 points level buoyed by continued buying momentum for heavyweights, as sentiment improved following overnight gains on Wall Street and positive corporate earnings. The FBM KLCI rose 11.03 points or 0.79% to close at 1408.00, another new high for the year. Gainers led losers by 353 to 333 while 294 counters were unchanged. Turnover declined to 684 million shares, worth RM1.292 billion, from 873 million shares worth RM1.732 billion the day before.
The FBM KLCI rebounded to open higher and was trading in a narrow range below 1400 in the morning session. The key index broke above the 1400 level near noon and continued to move higher in the afternoon to close at the highest point for the day. Chart-wise, the key index formed a bullish white candlestick which indicates the bull was in full control, and the index is expected to continue its upward momentum to move higher. Immediate overhead resistance zone is at 1410 to 1424.
MACD continued to move higher after pausing for a day, indicating a resume in the upward momentum. RSI(14) at 75.7 has hooked up reflecting the rebound and is still in the very bullish zone. Stochastic at 94.3 also hooked up but remained below its slow stochastic. Signals from the indicators indicated that the benchmark index is still in a very bullish state but remained short term overbought, and still run a risk of a downward correction.
With the strong up move yesterday, the FBM KLCI again move above the very short term 5-day moving average and is also above all other longer term moving averages. This indicates a bullish uptrend of the benchmark index.
However, external factors and concerns over a possible double-dip global recession, due to weak economic data emerging from the US, would continue to influence performance of the local market. Although good corporate results reported by Maybank and Axiata have lent positive support to the market, more correction was expected after the recent rally.
Overnight, the Dow fell -74.25 points or -0.74% lower to close at 9,985.81. Today, the FBM KLCI is likely to trade within a range of 1390 to 1419.
This week's expected range: 1347 – 1436
Today’s expected range: 1390 – 1419
Resistance: 1411, 1415, 1419
Support: 1390, 1394, 1401
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