Stocks on Bursa Malaysia ended broadly higher today with continued buying in heavyweights such as CIMB, but some of the bourse's earlier gains were trimmed on profit taking. The FBM KLCI rose 4.24 points or 0.29% at 1491.02 after opening 3.46 points higher at 1490.24. Gainers led losers by 459 to 301 while 316 counters were unchanged. Volume declined to 1.429 billion shares worth RM1.847 billion from Wednesday’s 1.488 billion shares worth RM1.802 billion.
Taking cue from the hefty rise on Wall Street overnight, the FBM KLCI opened with an up gap of 3.46 points and climb to the intra-day high of 1495.84 in early morning trade. However, profit-taking activities that surfaced sent the key index to the intra-day low of 1488.44, wiping out much of the gains, before late afternoon buying in heavyweights lift the key index off low to close at 1491.02.
Chart-wise, the key index formed a Doji-like candlestick with a longer upper shadow, which indicates the bear was still actively trying to block the bull from advancing further. However, the bull still managed to gain grounds by advancing 4.24 points to close above the 1490-point level. The key index is now closing above the 5 and 10-day moving average (MA), and is likely to continue moving higher to re-test the 1500 psychological level.
MACD continued to slide lower, but its histogram has started to turn shorter, indicating a slow down in the downward momentum. RSI (14) has hooked up, and the current reading of 64.7 indicates the key index is still in the bullish zone. Stochastic at 64.2 has curved up and touched the slow stochastic line, indicating that the short term correction is probably over and may resume its up cycle. Signals from the indicators are indicating that the short term correction of the FBM KLCI has taken a pause for the time being, and may continue to remain range-bound with an upward bias.
The FBM KLCI has resumed its short term uptrend, and may continue to move higher to re-test the 1500 psychological resistance level, nonetheless, it will still face active challenges from the bear which try to block its way up. Immediate overhead resistance zone is at 1496 to 1503, while the immediate downside support zone is at 1480 to 1472.
As the week ends, investors are likely to take a cautious approach heading into the weekend, and the market is likely to remain active with rotational play on second and third liner stocks while the heavyweights consolidate. Overnight, the Dow rose +38.60 points or +0.35% higher to close at 11,146.57. Today, the FBM KLCI is likely to trade within a range of 1480 to 1503.
This week's expected range: 1461 – 1524
Today’s expected range: 1480 – 1503
Resistance: 1495, 1499, 1503
Support: 1480, 1484, 1488
Stock to watch: YTLLand
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