Stocks on Bursa Malaysia ended on a firm note yesterday with the key index at a new high, boosted by gains in finance stocks and key blue-chips amid strong foreign buying, and most of the action was centred on small-capitalised stocks and the market momentum was also helped by Wall Street’s gains on Friday. The FBM KLCI gained 4.6 points, or 0.3%, to end at 1,574.49, surpassing the all-time closing high of 1,572.21 on Jan 7, 2011. Gainers led losers by 412 to 410 while 312 counters were unchanged. Trading volume decreased to 1.907 billion shares valued at RM2.201 billion from 2.144 billion shares valued at RM2.537 billion last Friday.
The FBM KLCI opened with an up gap of 3.58 points at 1,573.47 and moved to the morning session high of 1,574.05. Profit-taking activities which appeared almost instantly pushed the key index to its intra-day low of 1,570.63 before the key index recovered gradually to close at its day’s high of 1,574.49, charting another new record close. Chart-wise, the FBM KLCI formed a small white hammer like candlestick, which indicates low volatility, but the bulls were in control for the day. Having closed at a new historical highest close level, the FBM KLCI is poised to challenge its next record high of 1576.95 and the 1600 psychological level in the near term.
MACD continued to move higher, but its histogram is declining, indicating weak upward momentum. RSI (14) has hooked up and is at 72.9, is still in the very bullish zone. Stochastic at 92.6 has continued to move higher, indicating a continued up cycle and the market strength. Readings from the indicators indicated the FBM KLCI is still in the bullish state albeit showing a weak upward momentum.
The FBM KLCI has resumed its bullish uptrend and is now above all the short, medium and long term moving averages. Immediate overhead resistance zone is at 1577 to 1580, while the immediate downside support zone is at 1566 to 1558.
The FBM KLCI is expected to remain buoyant although the upward momentum is slow at the moment, while the overall market is expected to be active with rotational play on second and third liners. US market was closed yesterday for a public holiday. Today, the FBM KLCI is likely to trade within a range of 1568 to 1580.
This week's expected range: 1542 – 1594
Today’s expected range: 1568 – 1580
Resistance: 1576, 1578, 1580
Support: 1568, 1569, 1571
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