Stocks on Bursa Malaysia were mostly lower yesterday on profit-taking after the gains last week. The benchmark FBM KLCI rose by 2.72 points or 0.19% higher to close at 1469.69 on late buying interest in selected heavyweights. Decliners led advancers by 417 to 316 while 269 counters were unchanged. Turnover declined to 850 million shares worth RM1.381 billion from 967 million shares worth RM1.906 billion last Friday.
The FBM KLCI opened 3.76 points higher at 1470.73, it surged to the intra-day high of 1472.31 briefly and traded in a southward direction for most part of the day. It touched the intra-day low of 1465.03 but rebounded to close in the positive region on late buying of selected heavyweights. Chart-wise, the key index formed a Hammer-like candlestick which is a bottom reversal signal; it indicates the bulls are buying on correction. The key index hit the 5-day moving average at 1468 and rebounded of it, indicating the short-term support for the key index is still strong, and the immediate short term uptrend remained intact.
MACD continued to move higher, but at a slower pace as indicated by the shorter histogram, which signaled a slow down in the upward momentum. RSI(14) at 79.9 is very bullish and has hooked up, nonetheless, it is still in the overbought zone. Stochastic at 89.9 continued to move lower, reflecting the current correction mode of the index. Signals from the indicators are reflecting the current mild pullback of the key index, and the underlying tone is still very bullish.
The underlying uptrend of the benchmark FBM KLCI remained very strong as indicated by the index staying above all the short, medium and long term moving averages that are all pointing northeast. Immediate support zone lies at 1450 to 1461 provided by the short term 5 and 10-day MA, while the overhead resistance zone is at 1480 to 1500. As the market undertone is still very bullish, any correction should be viewed as an opportunity to accumulate quality stocks at lower price level. The market is likely to be in rotational play for the next three weeks until the budget 2011 announcement.
Overnight, the Dow rose +145.77 points or +1.37% higher to close at 10,753.62. Today, the FBM KLCI is likely to trade within a range of 1458 to 1480.
This week's expected range: 1403 – 1520
Today’s expected range: 1458 – 1480
Resistance: 1473, 1476, 1480
Support: 1458, 1461, 1465
Stock to watch: KEURO
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