Stocks on Bursa Malaysia ended broadly higher yesterday with the benchmark index touching another new high supported by buying interests on selected key heavyweights. The FBM KLCI rose by 9.11 points or 0.64% to close at 1441.07, after opening 5.55 points steadier at 1437.51. It had touched an intra-day high of 1441.8, surpassing the 1439.49 points set on Jan 18, 2008. Advancers outnumbered decliners by 511 to 256 while 258 counters were unchanged. Turnover increased to 1.075 billion shares valued at RM1.872 billion from 949 million shares valued at RM2.077 billion the day before.
The FBM KLCI opened with an up gap of 5.55 points and surged to hit the intra-day high of 1441.80 within the first fifteen minutes, profit-taking activities immediately surfaced and sent the key index to the intra-day low of 1431.71 before late afternoon buying interests lifted it to close near the day high. Chart-wise, the price action of the key index formed a hanging-man like candlestick which is a top reversal signal; however, it needs a confirmation today. As the key index continued moving higher, the next level of key resistance to watch out is the 1450 psychological level, where the index is expected to face heavy selling.
MACD continued to climb higher, indicates the continuation of upward momentum is still strong. RSI(14) at 83.9 is extremely bullish and is short term seriously overbought. Stochastic at 95.8 indicates very strong market strength, and is short term overbought. Signals from the indicators are indicating a very bullish state of the benchmark index, it is, however, very much overbought and a correction is imminent.
The underlying short, medium and long term trend of the FBM KLCI remained strongly pointing up, however, a short term correction is imminent as the index approaches its key resistance area. Immediate overhead resistance zone is now at 1445 to 1450 while the immediate downside support zone is at 1400 to 1423.
Overnight, the Dow rose +50.63 points or +0.49% higher to close at 10,320.10. Today, the FBM KLCI is likely to trade within a range of 1424 to 1452.
This week's expected range: 1370 – 1445
Today’s expected range: 1424 – 1452
Resistance: 1445, 1448, 1452
Support: 1424, 1428, 1434
Stock to watch: UEMLAND
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