Stocks on Bursa Malaysia closed higher yesterday led by plantation-related counters amid the strong crude palm oil (CPO) prices. Gains on the Wall Street last Friday prompted investors to take position after the long Chinese New Year break. The benchmark FBM KLCI rose 3.78 points or 0.25% to close at 1,535.60. It had opened 7.42 points higher at 1,539.24. Decliners outnumbered advancers by 567 to 287 while 240 counters were unchanged. Total volume surged to 3.24 billion shares valued at RM2.62 billion from the 1.53 billion shares worth RM1.7 billion recorded last Wednesday.
The FBM KLCI opened with an up gap of 7.42 points at 1,539.24 and climb to the intra-day high of 1,541.43 within the first hour of trading. Profit-taking activities then push the key index to the intra-day low of 1,533.75 before rebounding to close at 1,535.60. The key index was trading in the positive territory throughout the day. Chart-wise, the FBM KLCI formed a black spinning-top candlestick which indicates the bears have a slight upper hand and indecision of the market to move higher. As mentioned in yesterday analysis, 1539 to 1552 will be a strong resistance zone for the key index to clear. The key index has now closed above the 5 and 10-day moving average (MA) but is still below the 20 and 30-day MAs. The FBM KLCI would have to close above the 20-day MA at 1551 for it to re-gain its bullishness.
MACD continued to slide lower, but at a slower pace, as show by its shorter histogram, which indicates a reduction in the downward momentum. Nevertheless, MACD is still in the negative territory, indicating the key index is still bearish in the short term. RSI (14) continued to climb higher to 49.3, is in the mildly bearish to neutral zone. Stochastic at 33.4 has continued to move higher, indicating the short term up cycle is continuing its trend. Readings from the indicators indicated that the FBM KLCI has staged a rebound, is about to turn bullish again if it can move above the 1550 psychological level.
The short term trend of the FBM KLCI is currently sideways with an upward bias, while the medium and long term uptrend remained intact. Immediate overhead resistance zone is at 1540 to 1550, while the downside support zone is at 1520 to 1505. The FBM KLCI may continue its sluggish up move but the second and third liners will remain active judging from the high volume registered yesterday.
Overnight, the Dow rose +69.48 points or +0.57% to close at 12,161.63. Today, the FBM KLCI is likely to trade within a range of 1524 to 1549.
This week's expected range: 1482 – 1567
Today’s expected range: 1524 – 1549
Resistance: 1540, 1545, 1549
Support: 1524, 1529, 1532
Stocks to watch: RAMUNIA, BENALEC, ASB
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