Stocks on Bursa Malaysia ended last week ahead of the Hari Raya holiday on a positive note, recovering from recent losses, amid improved sentiments on Wall Street. The market was in negative territory throughout the week after the strong run-up over the past few weeks, as investors were reluctant to take any long positions and is unwinding ahead of the Raya holidays. The benchmark FBM KLCI index advanced 3.64 points higher at 1,437.78, after a half-day trading on last Thursday, the eve of Hari Raya. Week-on-week, it gained 2.11 points, or 0.15% compared with 1,435.67 the previous Friday. The weekly turnover dwindled to 2.442 billion shares worth RM4.493 billion from 2.861 billion shares valued at RM7.428 Billion the previous week.
The FBM KLCI opened last Monday on a weak note, and was in a correction mode, it lost a marginal 0.99 point and formed a black spinning-top candlestick. It continued to slide lower on Tuesday when it closed 0.41 point lower to 1434.27 on low volume, forming a Doji candlestick. On Wednesday, the key index fell to the intra-week low of 1428.66 but rebounded to close a marginal 0.13 point lower at 1434.14, forming a Hammer candlestick, which is a bottom reversal signal, and the index continued the rebound on last Thursday to close the week at 1437.78, forming a bullish white candlestick, confirming the reversal signal of the Hammer candlestick.
On the weekly chart, the benchmark index formed a black spinning-top candlestick which indicates indecision of the market to move up further and marked a pause or consolidation to the three-week uptrend. In the coming week, if the key index could not march above the recent high or resistance of 1441.80, then, it is likely that it will continue its consolidation. On the daily chart, it formed a bullish candlestick on last Thursday, which is a confirmation to the reversal signal of the Hammer candlestick formed last Wednesday, hence, it may continue its upward momentum to re-test the recent high of 1441.80. However, the index is expected to meet strong resistance at the 1441 to 1450 zone.
Weekly MACD continued to climb higher, indicating the medium term upward momentum is still strong. Daily MACD, however, continued to slide lower for the fifth consecutive days as indicated by its histogram, reflecting the correction and consolidation mode of the benchmark index over the last few days.
Weekly RSI(14) at 76.4 is tapering off indicating a slow down in the medium term upward strength. Daily RSI(14) at 78.5, has however, hooked up, reflecting the rebound and a possible end to the correction over the four days, and it is still in the very bullish zone.
Weekly Stochastic at 97, has hooked down, nevertheless, it is still very strong as it remained above its weekly slow Stochastic. Daily Stochastic at 88.7 has hooked up, but is still below its daily slow Stochastic, indicating the correction is not over yet.
The underlying uptrend of the FBM KLCI remained intact as indicated by the short medium and long term moving averages that are all pointing northeast. As the key index again closed above the 5-day moving average, it indicates the short term correction might be over and the key index might continue its upward journey.
As this week is also a holiday-shortened week due to the Malaysia Day holiday which falls on Thursday, 16 September, and the market is likely to be still in the Raya mood as many take extended leave till Wednesday, hence, the market is likely to go sideways or range-bound with an upward bias and might track the performance of key regional indexes.
The Dow rose +47.53 points or +0.46% higher to close at 10,462.77 on last Friday. This week, the FBM KLCI may trade within a range of 1412 to 1458, and for today it is likely to trade within a range of 1430 to 1443.
This week's expected range: 1412 – 1458
Today’s expected range: 1430 – 1443
Resistance: 1439, 1441, 1443
Support: 1430, 1432, 1434
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