Stocks on Bursa Malaysia ended broadly higher yesterday led by blue-chip counters. Better performance in the regional markets and commodity prices also improved market sentiment, sparking continued buying interest in finance, plantation and properties counters on the local bourse. The FBM KLCI ended 9.49 points or 0.62% higher at 1,531.02, after opening 4.37 points better at 1,525.9. Gainers outpaced losers by 473 to 288 while 333 counters were unchanged. Turnover rose to 1.271 billion shares worth RM1.810 billion from 1.040 billion shares worth RM1.393 billion registered on Tuesday.
The FBM KLCI opened with an up gap of 4.37 points at 1,525.90 and surged to the morning session high of 1,530.16. Profit-taking activities caused a pulled-back of the key index, but it was staying in the positive territory throughout the day before a last minute buying of selected blue-chips pushed the index to close at the hay’s high of 1,531.02. Chart-wise, the FBM KLCI formed a bullish Marubozu candlestick which indicates buyers were in full control of the day. The Marubozu candlestick also confirmed the reversal signal generated by the Hammer candlestick formed on Tuesday, and the FBM KLCI is expected to continue moving higher today to challenge the next level of resistance at 1,541. The key index has to move above this level in order to reverse the current short term downtrend.
MACD continued to slide lower but is tapering off, as shown by the shorter histogram which indicates a slow down in the downward momentum. RSI (14) has hooked up to 51, moving back to the bullish bias neutral zone. Stochastic has reversed up to 22.3 from the oversold zone, and is just below the slow stochastic line, a cross above the slow stochastic would trigger an up cycle in the stochastic. Readings from the indicators showed that the FBM KLCI is bottoming out of its recent correction, and is likely to move higher.
The FBM KLCI has now closed above the 5-day moving average (MA) but is still below the 10 and 20-day MAs that converge at 1,535, if the key index is able to move above this level, it is likely to rally to retest the resistance level at 1,541. The medium term trend as indicated by the 60-day MA continued to remain sideways, while the long term uptrend is still intact. Immediate overhead resistance zone is at 1,535 to 1,541 while the immediate downside support zone is at 1,525 to 1,515.
Overnight, the Dow rose +186.79 points or +1.52% to close at 12,453.54. Today, the FBM KLCI is likely to trade within a range of 1,522 to 1,540.
This week's expected range: 1464 – 1576
Today’s expected range: 1522 – 1540
Resistance: 1533, 1536, 1540
Support: 1522, 1524, 1527
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