Stocks on Bursa Malaysia ended yesterday neared its seven-week high on extended gains by heavyweights such as Maybank in line with regional peers and the overnight rally on Wall Street. The FBM KLCI ended 11.54 points or 0.76% higher at 1,531.63, after opening 2.89 points better at 1,522.98. Advancers outnumbered decliners by 670 to 242 while 229 counters were unchanged. Turnover surged to 2.338 billion shares, worth RM2.481 billion, from 1.756 billion shares, worth RM2.182 billion, transacted on Tuesday.
The FBM KLCI opened with an up gap of 2.89 points at 1,522.98 and touched the intra-day low of 1,522.36 within the first fifteen minutes. The key index then rebounded to move higher for the rest of the day with intermittent mild profit-taking and hit the intra-day high of 1,532.68 before retracing to close off high at 1,531.63. Chart-wise, the FBM KLCI formed a bullish white candlestick which is a continuation of the bullish breakout formed on Tuesday, and this confirmed our view that once the key index is able to close above the 1,530 level, it will turn bullish. With this bullish up move, the key index is likely to move higher to challenge the next resistance zone at 1,533 to 1,545.
MACD continued to move higher after crossing the zero-line yesterday, indicating that the FBM KLCI has turned bullish. RSI (14) is higher at 62.2, moving into the bullish zone. Stochastic also continued to surge higher to 89.3, moving into the short term overbought zone, nonetheless, it also indicates that the key index is gaining strength. Readings from the indicators showed that the FBM KLCI has turned bullish, and this also has the support of a surged in total trading volume. Hence, the key index is expected to continue its momentum to climb higher in the near term.
The short term trend of the FBM KLCI remained up, and the key index has also successfully closed above the 60-day moving average, indicating the medium term trend has begun to turn up. The long term uptrend is still intact. Immediate overhead resistance zone is at 1,533 to 1,545, while the immediate downside support zone is at 1,520 to 1,510.
Overnight, the Dow rose +71.60 points or +0.58% to close at 12,350.61. Today, the FBM KLCI is likely to trade within a range of 1,514 to 1,544.
This week's expected range: 1483 – 1539
Today’s expected range: 1514 – 1544
Resistance: 1536, 1540, 1544
Support: 1514, 1518, 1525
Stocks to watch: VS, NAGAMAS, KUB
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