Stocks on Bursa Malaysia finished last week on a firm note on Friday as positive global cues generated buying interests in the local market. The FBM KLCI rose by 1.71 points or 0.11% to close the week at 1,515.55, and it gained 11.66 points week-on-week from the previous Friday’s close of 1,503.89. Gainers outpaced losers by 483 to 278, while 316 counters were unchanged. Turnover rose to 1.16 billion shares worth RM1.73 billion from 1.04 billion shares worth RM1.853 billion on Thursday. Weekly volume surged to 6.125 billion shares, valued at RM8.214 billion, from 5.1 billion shares, valued at RM7.74 billion, the previous week.
The FBM KLCI opened 1.88 points lower at 1,502.01 on last Monday and slipped to the intra-week low of 1,498.34, but rebounded to continuously move higher for the rest of the week. It touched the intra-week high of 1,518.42 on Friday before pulling back to close off high at 1,515.55. On the weekly chart, the FBM KLCI formed a bullish white candlestick which confirmed the reversal signal generated by the piercing-line candlestick formed the previous week. With this price action, the FBM KLCI is likely to move higher this week to challenge the overhead resistance zone of 1,524 to 1,545.
On the daily chart, the FBM KLCI formed a Doji candlestick which gapped away from Thursday’s candle. This candlestick indicates that the market was reluctant to move higher and faced some mild profit-taking when the week came to an end. Nonetheless, the FBM KLCI had risen consecutively for six days, albeit on a gradual pace. The key index had reclaimed the level just before the Japanese tsunami selling started, and it goes to show that worries over the impact of the disaster in Japan on the rest of Asia has eased.
Weekly MACD continued to slide lower but on a reduced pace, as shown by the second shorter histogram on the weekly chart. This indicates the weekly downward momentum is weakening and positive upward momentum is in the building. Daily MACD, however, had continued to move higher, albeit still in the negative zone. This indicates the daily upward momentum is gradually building up.
Weekly RSI (14) was higher at 55.3 compared with 53.1 the previous week, and has turned mildly bullish. Daily RSI (14) also climbed higher to 53.9, although in a slow pace, but is gradually approaching the mildly bullish zone.
Weekly Stochastic has hooked downward, however, it is forming a bullish divergence. Daily Stochastic is at 74.1 and had continued to move higher, indicating a continuation of the short term up cycle and the gradual improving of market strength.
Readings from the indicators showed that the FBM KLCI has probably seen its worst for the time being, and is gradually turning positive. However, more data is required for confirmation.
Short term trend of the FBM KLCI has turned upward, as the key index is closing firmly above the short term moving averages (MA). The medium term trend, as indicated by the 50 and 60-day MAs is sideways, while the long term uptrend remained intact. In order for the FBM KLCI to turn bullish, it will have to cross the first hurdle at 1,524 posted by the 60-day MA and follow by clearing the resistance at 1,530. Immediate overhead resistance zone is at 1,519 to 1,530, while the downside support zone is at 1,505 to 1,490.
Last Friday, the Dow rose another +50.03 points or +0.41% to close at 12,220.59. This week, the FBM KLCI is likely to be range-bound with an upward bias, and may trade within a range of 1,483 to 1,539, and for today it is likely to trade within a range of 1,509 to 1,523.
This week's expected range: 1483 – 1539
Today’s expected range: 1509 – 1523
Resistance: 1518, 1521, 1523
Support: 1509, 1511, 1513
Stocks to watch: HWGB, MAHSING
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