Stocks on Bursa Malaysia ended broadly higher yesterday as the bull continued to charge ahead with blue-chips hogging the limelight and the market barometer surging to yet another fresh high of 1,566.17 points, buoyed mainly by finance stocks which was in hot pursuit of investors. The FBM KLCI closed off its intra-day high of 1571.85 to settle at 1566.17, up 14.28 points or 0.92% from Tuesday’s close. Gainers led losers by 547 to 320 while 273 counters were unchanged. Trading was brisk with volume totaling 2.346 billion shares, valued at RM3.69 billion compared with Tuesday’s 2.011 billion shares, worth RM2.881 billion.
The FBM KLCI opened marginally lower by 0.3 point at 1551.59 and fell to the intra-day low of 1542.95 on profit-taking within the first half an hour of the day. Thereafter, the bulls came in and push the key index to the new record intra-day high of 1571.58, and profit-taking activities which follow pressed the key index to close off high. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates continuation of the up move, but a strong resistance was seen at 1571 level, and the key index is likely to re-test this level.
MACD continued to climb higher in a parabolic manner, indicating a strong increase of the upward momentum. RSI (14) continued to surge higher to 75.6, indicating very bullish market strength, but is stepping into the short term overbought zone. Stochastic at 95.9 has continued to climb higher, indicating a strong continuation of the up cycle. Readings from the indicators indicate a very bullish undertone of the FBM KLCI, and this momentum is expected to continue for a while. However, as the short term indicators are entering the overbought zone, some pull-back is expected, but would be shallow.
The FBM KLCI is now in a very strong uptrend as it moves further away from all its moving averages, and a pull-back is expected soon. However, any pull-back should be viewed as an opportunity to accumulate quality shares at lower price level. Judging from the market’s swift momentum, the local bourse is set to test the 1600 level soon, a key psychological resistance level.
Overnight, the Dow rose +31.71 or +0.27% higher to close at 11,722.89. Today, the FBM KLCI is likely to trade within a range of 1520 to 1600.
This week's expected range: 1488 – 1600
Today’s expected range: 1520 – 1600
Resistance: 1578, 1589, 1600
Support: 1520, 1531, 1548
Stocks to watch: MUDAJYA
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