Stocks on Bursa Malaysia ended broadly higher yesterday after strong gains on Wall Street last Friday improved investor sentiment. The FBM KLCI rose 2.51 points or 0.17% to 1509.79, after opening 4.54 points higher at 1511.82. Market breadth was positive with gainers leading losers by 436 to 304 while 300 counters were unchanged. A total of 1.158 billion shares worth RM1.662 billion were traded against last Friday's 1.531 billion shares valued at RM2.725 billion.
The FBM KLCI opened 4.54 points higher at 1511.82 and surged to the intra-day high of 1517.15 within the first fifteen minutes. Heavy profit-taking emerged and sent the key index lower throughout the day but remained in the positive territory. It touched the intra-day low of 1506.88 before rebounding to close off low at 1509.79. Chart-wise, the FBM KLCI formed a bearish Harami candlestick pattern, which indicates range-bound trading and indecision of market direction. The key index will need to break upward above 1517 for it to move higher; if it breaks below 1506, it will continue with its consolidation, however, strong support is expected at the 1500 psychological level.
MACD continued to climb higher but at a slow pace, as indicated by the shorter histogram, which indicates a lack of upward momentum. RSI (14) has mildly hooked up, a reading of 55.5 indicates the key index is in a neutral to mildly bullish zone. Stochastic at 80.1 has crossed below its slow stochastic line, reflecting the consolidation mode of the key index. Readings from the indicators indicate the FBM KLCI is currently in a consolidation mode, and may continue to do so until there is a firm breakout on either direction.
The short term trend of the FBM KLCI is still up as it continues to stay above the short term moving averages, while the medium to long term uptrend remained intact. Immediate overhead resistance zone is at 1517 to 1523, while the downside support is at 1507 to 1500. With the trading volume maintained above 1 billion shares, the overall market is expected to remain active with rotational play on second and third liners.
Overnight, the Dow rose +18.24 points or +0.16% higher to close at 11,428.56. Today, the FBM KLCI is likely to trade within a range of 1495 to 1527.
This week's expected range: 1470 – 1548
Today’s expected range: 1495 – 1527
Resistance: 1516, 1522, 1527
Support: 1495, 1501, 1505
Stocks to watch: AZRB, GLBHD, MJPERAK, PERAKCORP, PMETAL, TDM, WCT
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