Stocks on Bursa Malaysia ended mostly higher yesterday encouraged by gains in regional markets. The strong closed on Wall Street overnight, improving investor sentiment following strong US economic data, and hopes that the sovereign debt crisis in Europe would ease have prompted continuous buying interest in selected blue-chips which pushed the benchmark FBM KLCI to close above the crucial 1500 points psychological level. The FBM KLCI advanced 17.80 points or 1.20% to close at 1503.22 after opening 7.11 points higher at 1492.53. Advancers outpaced decliners by 516 to 245 while 296 counters were unchanged. Turnover increased to 979 million shares worth RM1.79 billion, from Wednesday’s 886 million shares valued at RM1.59 billion.
Taking cue from Dow’s strong performance overnight, the FBM KLCI opened with an up gap of 7.11 points and surged to the morning session’s high of 1500.30, after that, the key index moved sideways within 1496 to 1500 for most part of the day. A last minute buying of selected key heavyweights helped pushed the key index through the 1500 level to close at 1503.22. Chart-wise, the FBM KLCI formed a bullish Marubozu candlestick which indicates buyers were in control for the day, and is expected to continue its upward momentum to move higher. After breaking through the tough resistance at 1500, the FBM KLCI is again turning positive for the short term. Strong overhead resistance zone is expected at 1508 to 1532.
MACD has turned upward to move back into the positive zone after breaking below the zero-line the day before, and histogram also turned shorter drastically indicating a pick up in the upward momentum, albeit the MACD is still below its signal-line. RSI (14) at 54.5 has turned strongly upward from 43.4 a day ago, moving from the mildly bearish zone to the mildly bullish zone. Stochastic at 34.6 has hooked up strongly from 26 a day ago crossing above its slow stochastic line. Signals from the indicators indicate that the short term consolidation phase of the FBM KLCI is likely to be over; nevertheless, it will require one or two more days’ data to confirm.
With the strong up move of the FBM KLCI yesterday, the short term trend of the key index has turned upward. The medium to long term uptrend, however, remained intact. Immediate strong resistance is expected at 1513 level while the downside support zone lies at 1490 to 1474. Overnight, the Dow rose +100.43 points or +0.89% higher to close at 11,356.21. Today, the FBM KLCI is likely to trade within a range of 1485 to 1514.
This week's expected range: 1442 – 1526
Today’s expected range: 1485 – 1514
Resistance: 1507, 1510, 1514
Support: 1485, 1489, 1496
Stock to watch: MUHIBAH, INCKEN, KEURO, SAPCRES, PENERGY, DIALOG
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