Stocks on Bursa Malaysia ended higher yesterday supported by continued buying in heavyweights. The announcement by the government on the 19 Entry Point Projects valued at RM67 billion under the Economic Transformation Programme had boosted buying interest in the local market, especially in oil and gas-related stocks. The FBM KLCI rose 3.55 points or 0.23% to 1,566.49, after opening 1.42 points higher at 1,564.36. Advancers led decliners by 460 to 406 while 273 were unchanged. Volume declined to 2.473 billion shares worth RM2.703 billion from Tuesday’s 2.706 billion shares valued at RM2.637 billion.
The local market started the day on a positive note as investors took cue from the higher overnight close on Wall Street, which saw the FBM KLCI opened 1.42 points higher and surged to the intra-day high of 1569.08 within the first fifteen minutes. Profit-taking activities which appeared immediately pressed the key index lower to touch the intra-day low of 1562.73, before late afternoon buying in selected heavyweights lift the key index to close higher. Chart-wise, the price action of the FBM KLCI formed a spinning-top candlestick which confirmed the bottom reversal signal issued by the morning-star candlestick formed on Tuesday. The key index is expected to continue moving higher to re-test its recent high.
MACD continued to climb higher, but at a much reduced pace, as shown by the shorter histogram, indicating a slow down in the upward momentum. RSI (14) at 71 had hooked up gently, and is back to the very bullish zone. Stochastic continued to move lower, indicating the consolidation process is still in place. Signals from the indicators show that the momentum of the FBM KLCI has not really pick up, and might continue its sideways range-bound mode with an upward bias.
The FBM KLCI is currently closing right on the 5-day moving average (MA), and the underlying trend remained up. Immediate overhead resistance zone is at 1570 to 1576, while the immediate downside support zone is at 1558 to 1550. The overall market is expected to remain active with rotational play on second and third liners, while the key index may remain range-bound with an upward bias.
Overnight, the Dow rose +83.56 or +0.72% higher to close at 11,755.44. Today, the FBM KLCI is likely to trade within a range of 1556 to 1576.
This week's expected range: 1485 – 1630
Today’s expected range: 1556 – 1576
Resistance: 1569, 1572, 1576
Support: 1556, 1559, 1563
Stocks to watch: GUOCO, ANNJOO, MIECO, SEALINK
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