Stocks on Bursa Malaysia were in two different trends last week with the benchmark index charting new highs, pushed up by index link heavyweights while second and third liners were in correction mode. The FBM KLCI rose 24.62 points or 1.74%, week-on-week, to close at 1435.67 on Friday. Weekly turnover decreased to 2.861 billion shares valued at RM7.428 billion from 4.02 billion shares worth RM7.55 billion the previous week, as last week had only four trading days due to the National Day holiday.
The FBM KLCI opened last Monday on a positive note with an up gap of 1.93 points at 1412.98, and this become the intra-week low as the key index continued to climb higher from there. Bursa Malaysia was closed on Tuesday for National Day celebration. The index continued to close higher on Wednesday despite heavy profit-taking activities during the day. The key index opened with an up gap of 5.55 points on Thursday and was faced with heavy profit-taking during the day, but last hour buying managed to push the index to close near the day’s high, forming a Hanging-man candlestick, which is a top reversal signal, and true enough, the index corrected on Friday which confirmed the reversal signal of the Hanging-man candlestick.
On the weekly chart, the benchmark FBM KLCI formed a bullish white candlestick which indicates continuation of the current up trend. On the daily chart, the index, however, formed a bearish black candlestick which confirmed the reversal signal generated by the Hanging-man candlestick formed on Thursday, hence, the index may continued to consolidate in the coming week. However, the underlying longer term trend as indicated by the weekly chart is still strong, and the correction may be shallow.
Weekly MACD continued to move higher, reflecting the strong medium term upward momentum. Daily MACD too is climbing higher, however, its histogram has turned shorter, reflecting the slow down in upward momentum caused by the correction on last Friday. Weekly RSI(14) at 76.2 is very bullish, but is overbought. Daily RSI(14) at 78.8 has hooked down from its high of 83.9 on Thursday, is still in the overbought territory. Weekly Stochastic at 97.9 continued to move higher, indicates the medium term uptrend is very strong. Daily Stochastic at 95.6 has turned sideways, but remained overbought.
Signals from the indicators are indicating a very strong medium term uptrend, and the index may continue to test higher level of resistances. For the short or immediate term, the index may face correction, as it is technically ripe for it. However, the correction maybe shallow due to a strong underlying trend, hence, it should be viewed as an opportunity to accumulate quality stocks at lower price levels during the correction.
As the encouraging second quarter corporate results were already reflected in the bullish FBM KLCI, and the coming week is also a holiday-shortened week, the market is expected consolidate its recent gains and to track the performance of regional bourses. Immediate overhead resistance zone for the coming week is envisaged at 1440 to 1473, while the immediate support zone will lies at 1400 to 1418.
The Dow rose +127.83 points or +1.24% higher to close at 10,447.93 on last Friday. This week, the FBM KLCI may trade within a range of 1389 to 1473, and for today it is likely to trade within a range of 1423 to 1448.
This week's expected range: 1389 – 1473
Today’s expected range: 1423 – 1448
Resistance: 1440, 1444, 1448
Support: 1423, 1427, 1431
No comments:
Post a Comment