Stocks on Bursa Malaysia closed mixed yesterday with the benchmark FBM KLCI climbing back to the 1,500-point level. The bullish performance was due to continuous follow-through buying in index-linked heavyweights such as Genting, Axiata, Sime Darby and Maybank, following their recent losses. The key index rose 10.99 points or 0.74% to close at 1,502.24 after opening 3.63 points higher at 1,494.88. Decliners outnumbered advancers by 412 to 356 while 310 counters were unchanged. Volume was thin with 1.12 billion shares worth RM1.51 billion traded compared with 1.16 billion shares worth RM2.04 billion on Monday.
The FBM KLCI opened 3.63 points higher at 1,494.88 and traded to the intra-day low of 1,492.70 before buying interest came in to gradually push the key index higher with intermittent mild profit-taking to close at the day’s high of 1,502.24. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates buyers were in control for the day. This candlestick also confirmed the bottom reversal signal of the hammer candlestick formed on Monday. Even though the key index has now closed above the 1,500 point psychological level, but the current downtrend has not been reverse yet. It will have to continue to move higher to close above 1,530 to reverse the current trend.
MACD has turned upward slightly, but is still below the signal line, indicating the up move of the key index yesterday could just be a rebound. RSI (14) is higher at 43, and has continued to climb higher into the mildly bearish zone. Stochastic is at 23.2, and has also turned upward and crossed above the slow stochastic line, reflecting the rebound. Readings from the indicators showed that the FBM KLCI is currently still weak, and the gain yesterday could well be just a technical rebound which could be short lived.
With the up move yesterday, the FBM KLCI has closed right on the long term 120-day moving average (MA) and has crossed above the very short term 5-day MA. However, it is still below other short and medium term MAs, hence, there will be a lot of resistances to clear for the key index to re-gain its short term uptrend. Immediate overhead resistance zone is at 1,505 to 1,527 while the downside support zone is at 1,490 to 1,474.
Overnight, the Dow fell -168.32 points or -1.38% to close at 12,058.02. Today, the FBM KLCI is likely to trade within a range of 1,486 to 1,512.
This week's expected range: 1438 – 1540
Today’s expected range: 1486 – 1512
Resistance: 1505, 1509, 1512
Support: 1486, 1489, 1495
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