Stocks on Bursa Malaysia ended Monday on a firmer note with sentiment supported by local funds as well gains in key regional markets. The benchmark FBM KLCI rose 10.81 points or 0.72% to 1,505.33, pushed by gains mostly in TENAGA and CIMB, after opening 3.37 points higher at 1,497.89. Gainers outpaced losers by 546 to 268, while 285 counters were flat. Turnover was higher at 1.978 billion shares worth RM1.866 billion from last Friday’s 1.679 billion shares worth RM2.410 billion. Bursa Malaysia was closed for Prophet Muhammad’s birthday yesterday.
The FBM KLCI opened 3.37 points higher at 1,497.89 and gradually climbed to the intra-day high of 1,513.29, before profit-taking activities that surfaced in mid afternoon pressed the key index to close off-high at 1,505.33. Chart-wise, the FBM KLCI formed a bullish Harami candlestick, which indicates counter-attack by the bulls after three consecutive days of sell down by the bears. As mentioned in Monday’s analysis, the neckline of the head-and-shoulder pattern at 1,512 had post as a resistance to the up move of the key index. The key index will have to close above this neckline in order to reverse the downtrend. The FBM KLCI has rebounded off the long term 120-day moving average, which is currently at 1,492, and this is an important level to watch. If the key index breaks below this level, it is likely to slide lower to test the next lower support at 1,474.
MACD continued to slide lower; however, the histogram is shorter, indicating the downward momentum is slowing down slightly. RSI (14) made a hooked up to 38.8, is still in the bearish zone. Stochastic is at 8.6, and has continued to slide lower into the short term oversold zone, indicating very weak market strength. Readings from the indicators shows that the FBM KLCI is still in a bearish condition, and is likely to continue its consolidation.
The short term trend of the FBM KLCI remained down, while the medium term trend has turned sideways. Nevertheless, the long term uptrend still remained intact. Overnight, the Dow fell -41.55 points or -0.34% to close at 12,226.64. Today, the FBM KLCI is likely to trade within a range of 1476 to 1533.
This week's expected range: 1450 – 1530
Today’s expected range: 1576 – 1533
Resistance: 1515, 1524, 1533
Support: 1476, 1485, 1495
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