Stocks on Bursa Malaysia closed higher yesterday, boosted by persistent buying in selected blue chips. The market started the day on a positive note as investors took the cue from overnight gains on Wall Street, and positive corporate developments also spurred buying interest in the local market. The FBM KLCI rose 9.04 points or 0.58% to 1,561.93 after opening 3.94 points higher at 1,556.83. Gainers led losers by 441 to 352 while 323 counters were unchanged. Turnover was marginally higher at 1.575 billion shares worth RM2.283 billion from Wednesday’s 1.572 billion shares worth RM2.066 billion.
The FBM KLCI opened with an up gap of 3.94 points at 1,556.83 and slid to the intra-day low of 1,554.60 within the first five minutes on profit-taking. The index rebounded immediately and was ranging from 1,556 to 1,558 for most part of the day before staging a breakout in the last half an hour to close at the day’s high of 1,561.93. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates buyers were in control, and it also confirmed the reversal signal issued by the Doji candle with long lower shadow formed on Wednesday. Hence, the FBM KLCI is likely to continue its upward move to test the higher resistance zone of 1,565 to 1,577.
MACD continued to move higher, whereas its histogram continued to turn shorter, which indicates weakening of the upward momentum. RSI (14) is higher at 72.3, and has moved into the very bullish zone, which indicates the key index is regaining its strength. Stochastic has hooked up to 88, but is still below its slow stochastic line. Readings from the indicators showed that the recent correction of the FBM KLCI is possibly over, and is regaining its upward strength.
With the up move yesterday, the FBM KLCI has reversed its correction and resumed its short term uptrend. The medium term trend remained sideways while the long term uptrend is still intact. The FBM KLCI is likely to challenge its immediate resistance zone of 1,565 to 1,577 soon, and its immediate downside support zone is at 1,550 to 1,544. With the current volume of around 1.5 billion shares, the overall market is expected to remain active with rotational play on second and third liners.
Overnight, the Dow fell -17.26 points or -0.14% to close at 12,409.49. Today, the FBM KLCI is likely to trade within a range of 1,549 to 1,570.
This week's expected range: 1483 – 1599
Today’s expected range: 1549 – 1570
Resistance: 1565, 1567, 1570
Support: 1549, 1552, 1557
Stocks to watch: PETRA, MEGB, JCY, ECS, UNISEM
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