Stocks on Bursa Malaysia finished in positive territory yesterday helped by gains in finance and plantation blue-chips. The overnight jump on Wall Street and firmer Asian stocks helped boost overall market sentiment, however, the key index dipped in and out of positive territory following losses in industrial and trading/services stocks. The FBM KLCI advanced 0.22 point or 0.01% to 1,509.10 after opening 3.71 points higher at 1,512.59. Gainers outpaced losers by 518 to 250 while 276 counters were unchanged. Turnover rose to 1.435 billion shares worth RM1.688 billion from 1.19 billion shares worth RM1.43 billion on Monday.
Taking cue from the strong performance of Wall Street overnight, the FBM KLCI opened with an up gap of 3.71 points at 1,512.59 and surged to the intra-day high of 1,514.20 within the first fifteen minutes. Profit-taking activities immediately appeared and sent the key index lower into the negative territory to hit the intra-day low of 1,507.51 before a last minute buying of selected heavyweights pushed the key index back to the positive territory to make a marginal gain. Chart-wise, the FBM KLCI formed a black spinning-top candlestick which indicates the key index was hesitant to move higher. As mentioned in previous analysis, the zone from 1,510 to 1,530 is an area of heavy resistance, and the FBM KLCI will have to breakthrough this resistance zone to re-gain its uptrend.
MACD continued to move higher, but is still in the negative territory, and hence the upward move may just be a technical rebound until the MACD cross above the zero line. RSI (14) is at 50.4 at the neutral level. Stochastic climb higher to 58.4 which indicates a continuation of the upward momentum and the market strength is currently neutral. Readings from the indicators showed that the FBM KLCI is gradually turning positive but is still weak, technically.
As the FBM KLCI has closed above the short term moving averages (MA), the short term trend has turned up. However, this could be just part of a technical rebound. The medium term trend is sideways while the long term trend remained up. The FBM KLCI is currently closing right below the upper downtrend channel, and hence will require more effort to break above this channel in order to resume its uptrend. Immediate overhead resistance zone for the key index is now at 1,515 to 1,530 while the downside support zone is at 1,500 to 1,474.
Overnight, the Dow fell a marginal -17.90 points or -0.15% to close at 12,018.63. Today, the FBM KLCI is likely to trade within a range of 1,499 to 1,521.
This week's expected range: 1457 – 1531
Today’s expected range: 1499 – 1521
Resistance: 1513, 1517, 1521
Support: 1499, 1503, 1506
Stocks to watch: DIGISTA, PERISAI, EKOVEST, DRBHCOM
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