Stocks on Bursa Malaysia ended mixed yesterday with the key index gaining marginally to close above the psychologically crucial 1,500-point level. The market was consolidating around the 1,500-point level during the session, but saw a last-minute rebound with healthy participation from local institutions. The FBM KLCI added 0.97 point or 0.064% to 1,506.30, after opening 8.82 points lower at 1,496.51. Market breadth was negative with decliners led advancers by 493 to 342 while 259 were unchanged. Volume dwindled to 1.878 billion shares worth RM2.029 billion from Monday's 1.978 billion shares worth RM1.866 billion.
The FBM KLCI opened 8.82 points lower at 1,496.51 and fell to the intra-day low of 1,495.43 within the first fifteen minute. It then rebounded and moved upward gradually for the rest of the day to end at the highest point of the day. Chart-wise, the FBM KLCI formed a bullish Marubozu like candlestick which indicates the bulls were in control for the day. With no new low, the key index had probably found its temporary bottom at the 1,490 support level, and is now taking a breather at the 1,500 level. However, in order to reverse the downtrend, the key index must at least close above the neckline which is currently at 1,513 and the 10-day moving average at 1,519.
MACD continued to slide lower but at a slower pace, as shown by its shorter histogram, indicating a slow down in the downward momentum. RSI (14) was marginally higher at 39.3, and is still in the short term bearish zone. Stochastic is at 16.7, and has hooked up from its low at 8.6 but is still below its slow stochastic line, reflecting a weak rebound of the FBM KLCI. Signals from the indicators indicate that the FBM KLCI is currently still weak, and the downward move has slowed down and might make an upturn soon.
The short term trend of the FBM KLCI is still down, and the medium term trend has turned sideways, while the long term trend remained up. Immediate overhead resistance zone is at 1513 to 1519, while the downside support zone is at 1490 to 1474. The FBM KLCI may continue its consolidation, while the penny stocks may continue to remain active judging from the volume over the last two trading sessions.
Overnight, the Dow rose +61.53 points or +0.50% to close at 12,288.17. Today, the FBM KLCI is likely to trade within a range of 1488 to 1518.
This week's expected range: 1450 – 1530
Today’s expected range: 1588 – 1518
Resistance: 1510, 1514, 1518
Support: 1488, 1491, 1499
Stocks to watch: FITTERS, HEVEA, ASB, EKOWOOD, DIGISTA
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