Stocks on Bursa Malaysia ended mixed last Friday with gains in heavyweight stocks supported the benchmark FBM KLCI to close 5.3 points higher at 1,556.19, after touching a high of 1,558.53 in active trading. Week-on-week, the key index was down 3.66 points from the previous Friday’s close of 1,559.85. Gainers outpaced losers by 393 to 313 while 335 counters were unchanged. Daily turnover climbed to 783.016 million shares valued at RM1.298 billion from 697.436 million shares worth RM1.362 billion recorded on Thursday. However, weekly volume declined to 3.674 billion shares valued at RM6.608 billion from previous week’s 4.072 billion shares worth RM9.827 billion.
The FBM KLCI was basically in consolidation mode last week which saw the benchmark index traded in narrow range. The key index opened the week on a weak note at 1,556.24 and faced selling pressure which pushed it the hit the intra-week low of 1,548.30 on Tuesday. The key index stayed almost unchanged on Wednesday, while on Thursday, it fell a marginal 0.9 point. On Friday, the key index rebounded to touch the intra-week high of 1,558.53 before pulling back to close off high at 1,556.19.
On the weekly chart, the FBM KLCI formed a Doji candlestick in Harami position which indicates indecision of the key index’s direction for last week, and the key index is likely to continue its consolidation this week until a clear sign of breakout is seen. On the daily chart, the FBM KLCI formed a small white candlestick which indicates low volatility. As the up move on Friday was not strong enough to break through the resistance at 1,560, the key index is likely to remain range-bound for the coming week.
Weekly MACD was higher, but is still below the weekly signal line, indicating the weekly momentum is gradually picking up but has not fully turned bullish. Daily MACD has turned upward slightly, indicating a slight pick up in the daily momentum after falling consecutively for four day. Weekly RSI (14) has hooked downward to 59.3, falling back to the mildly bullish zone, while the daily RSI (14) has hooked upward to 60, moving into the bullish zone. Weekly Stochastic was higher at 87.9, moving into the short term overbought zone. The daily Stochastic has hooked upward to 67.1 and is just touching the daily slow stochastic line. Mixed readings of the weekly and daily indicators showed that the FBM KLCI is in a consolidation mode with a slight upward bias.
The FBM KLCI is currently closing above all the moving averages which indicate the key index is on an uptrend for the short term. The medium term trend is sideways while the long term uptrend is still intact. Immediate overhead resistance zone is at 1,559 to 1,566 and the downside support zone is at 1,550 to 1,540. With the daily overall volume traded remained below the one billion shares mark, the overall market is likely to extend its consolidation.
Last Friday, the Dow fell -172.45 points or -1.42% to close at 11,951.91. This week, the FBM KLCI is likely to trade within a range of 1,539 to 1,569, and for today it is likely to trade within a range of 1,548 to 1,564.
This week's expected range: 1539 – 1569
Today’s expected range: 1548 – 1564
Resistance: 1559, 1562, 1564
Support: 1548, 1550, 1553
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