Stocks on Bursa Malaysia ended broadly lower yesterday, while blue-chips, led by MAYBANK, which announced strong half-year results, helped the FBM KLCI jumped 0.55 percent at the close. The FBM KLCI rose by 8.29 points to close at 1,525.19 despite China's decision to tighten its monetary policy had weighed heavily on the market for most of the day. Decliners outnumbered advancers by 639 to 259 while 238 were unchanged. Turnover increased to 1.841 billion shares worth RM2.063 billion from 1.498 billion shares worth RM1.983 billion on last Friday.
The FBM KLCI opened 1.57 points higher at 1,519.13 and climb higher to the morning session high of 1523.90 within the first fifteen minutes. Selling pressure on blue-chips which surfaced suddenly sent the key index to the intra-day low of 1505.54 in early morning trade, losing 12.02 points at its worst. The key index gradually recovered lost ground to hit the intra-day high of 1527.09 after MAYBANK announced its strong results at mid-day. Chart-wise, the FBM KLCI formed a white hangman-like candlestick which indicates sellers were initially strong but buyers later fight back to push the key index higher. The FBM KLCI has now closed above the neckline of the head-and-shoulder pattern but still need to clear the resistance zone at 1528 to 1545 to reverse the short term down trend.
MACD continues to move higher albeit still below the zero-line, with its histogram also getting shorter indicates the short term momentum is gradually turning upward. RSI (14) continued to climb higher to 49.9, indicates the key index has moved back to the neutral zone after visiting the very bearish zone. Stochastic also continued to climb higher to 49.7, indicating a continuation of the up cycle and a gradual pick up in market strength. Signals from the indicators show that the FBM KLCI is gradually moving out of its short term bearish mode.
The short term trend of the FBM KLCI is still range-bound but with an upward bias. The medium term trend has turned sideways, while the long term uptrend remained intact. Immediate overhead resistance zone is at 1528 to 1545, while the downside support zone is at 1505 to 1490.
US market was closed yesterday for President’s Day holiday. Today, the FBM KLCI is likely to trade within a range of 1490 to 1549.
This week's expected range: 1474 – 1550
Today’s expected range: 1490 – 1549
Resistance: 1534, 1541, 1549
Support: 1490, 1497, 1511
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