Stocks on Bursa Malaysia made a recovery yesterday in the last leg of trade with most blue-chips managing to recoup their earlier losses on late buying activity. Earlier in the day, concerns about the crisis in the Euro-zone sent investors away from the stock market but buying later emerged, supported by positive earnings headlines. The FBM KLCI finished 3.14 points or 0.21% higher at 1,532.12. Advancers outpaced decliners by 437 to 312 while 311 counters were unchanged. Turnover was lower at 812.197 million shares worth RM1.54 billion from Monday’s 870.618 million shares worth RM1.3 billion.
The FBM KLCI opened 2.3 points higher at 1,531.28 but was sold down to the intra-day low of 1,525.71 within the first twenty minutes. The key index rebounded and moved gradually higher to touch the intra-day high of 1,533.22 before last minute profit-taking activity brought the index to close off high at 1,532.12. Chart-wise, the FBM KLCI formed a hammer candlestick, which is a bottom reversal candlestick pattern, it indicates the bears were initially in control but the bulls surfaced later to push up the index. With the appearance of a hammer candlestick, the benchmark index is likely to stage a rebound today. However, the short term 5 and 10-day moving averages (MA) at 1,535 and 1,537 may post as a barrier to the up move.
MACD continued to slide lower indicating the downward momentum is still in force. Nevertheless, the MACD line is still above its signal line. RSI (14) has hooked up to 50.3, indicating the key index is currently in a neutral state. Stochastic has continued to slide lower to 61.4, indicating a continuation of the down cycle. Readings from the indicators indicates that the FBM KLCI is currently weak in terms of the market strength and momentum, and might continue to consolidate.
The FBM KLCI had rebounded to close above the 20 and 30-day MAs but is below the 5 and 10-day MAs which indicates the benchmark index is in consolidation mode for the short term. The medium term trend is sideways while the long term trend is up. Immediate overhead resistance zone is at 1,535 to 1,543 while the immediate downside support zone is at 1,530 to 1,523. With the dwindling volume, the FBM KLCI is likely to continue to remain range-bound for the near term.
Overnight, the Dow fell -25.05 points or -0.20% to close at 12,356.21. Today, the FBM KLCI is likely to trade within a range of 1,519 to 1,541.
This week's expected range: 1520 – 1565
Today’s expected range: 1519 – 1541
Resistance: 1535, 1538, 1541
Support: 1519, 1522, 1527
Stocks to watch: TENAGA, TRC, PUNCAK, GSB
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