Stocks on Bursa Malaysia closed higher last Friday following active buying interest in selected heavyweights, particularly Maybank. Gains in most heavyweight counters pushed the benchmark FBM KLCI 9.19 points or 0.59% higher to 1,563.43, and week-on-week, the key index gained 7.24 points or 0.24% from previous Friday’s close of 1,556.19. Gainers led losers by 394 to 345 while 352 counters closed unchanged. Turnover rose to 946.222 million shares worth RM2.22 billion compared with 814.91 million shares valued at RM1.645 billion on Thursday. Weekly volume increased to 4.121 billion shares worth RM7.805 billion from 3.674 billion shares worth RM6.608 billion the previous week.
The FBM KLCI opened last Monday on a weak note with a down gap of 4.48 points at 1,551.71 and closed at the day’s low of 1,545.88. The key index continued to slide lower on Tuesday to touch the intra-week low of 1,543.56 before rebounding to close 2.63 points higher at 1,548.51. On Wednesday, the FBM KLCI continued its upward momentum to close at the day’s high of 1,556.19 with a gain of 7.68 points. Thursday, the key index slipped 1.95 points to 1,554.24 on weak external factors, and on Friday, the FBM KLCI gained 9.19 points to finish the week near the week’s high at 1,563.43.
On the weekly chart, the FBM KLCI formed a bullish engulfing candlestick over the dragon-fly Doji candlestick formed on previous week. This indicates the bulls were strong in reversing the trend after being beaten down in the early part of the week. The key index has continued its gradual climb for the sixth weeks, and is likely to continue its uptrend in the coming week to re-test the historical high of 1,576.95. On the daily chart, The FBM KLCI formed a bullish white candlestick which gap away from Thursday’s candle. The gap indicates bullish undertone of the key index and it is expected to continue with its upward momentum to move higher today. However, immediate strong resistance is at 1,566, if the key index is able to cross this resistance level convincingly, it might rally higher to challenge the historical high level of 1,576.95.
Weekly MACD continued to move higher, and is about to cross the weekly MACD signal line. This indicates a continued gradual gain in the weekly upward momentum of the FBM KLCI. Daily MACD, nonetheless, has just made a golden cross over its daily MACD signal line, giving out a bullish buy signal. Weekly RSI (14) has hooked up and is at 60.7, indicating the weekly relative strength of the FBM KLCI is turning bullish. Daily RSI (14) is higher at 62.1, indicating the daily relative strength already moved into the bullish zone. Weekly Stochastic is at 92.9, indicating strong weekly market strength. Daily Stochastic has just crossed over its slow stochastic line, indicating a change in the short term market cycle from down to up. Readings from the indicators showed that the FBM KLCI is gradually gaining momentum and strength, and hence has a strong likelihood to re-test the historical high level.
The FBM KLCI has now broke out from the short term downtrend channel and closed above the 1,560 level, signaling the short term trend has turned upward. The medium term trend, as indicated by the 60-day moving average is also starting to climb upward, and the long term trend still remained up. Immediate strong overhead resistance zone is at 1,566 to 1,577, while the downside support zone is at 1,556 to 1,543. With the volume climbing towards the 1 billion mark, it indicates the market is gradually picking up steam; however, investors remained cautious in their buying.
Last Friday, the Dow rose +42.84 points or +0.36% to close at 12,004.36. This week, the FBM KLCI is likely to trade within a range of 1,529 to 1,585, and for today it is likely to trade within a range of 1,550 to 1,573.
This week's expected range: 1529 – 1585
Today’s expected range: 1550 – 1573
Resistance: 1567, 1570, 1573
Support: 1550, 1553, 1558
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