Stocks on Bursa Malaysia ended higher yesterday, supported by mild buying. The local bourse was generally supported by buying interest in selected heavyweights and low liners. However, further gains were capped as most investors stayed on the sidelines ahead of the release of second quarter GDP and July CPI figures. The FBM KLCI rose 4.83 points or 0.32% to 1,503.07 after opening 3.97 points higher at 1,502.21. Gainers overwhelmed losers by 453 to 255 while 309 counters closed unchanged. Turnover was lower with 892.81 million shares valued at RM1.6 billion changed hands compared with Tuesday’s 1.29 billion shares worth RM1.97 billion.
The FBM KLCI opened 3.97 points higher at 1,502.21 and moved in sideways trend for most part of the day, within a tight range of 1,499.59 to 1,504.63 in the positive zone. Chart-wise, the FBM KLCI formed a small white spinning-top candlestick in Harami position, which indicates indecision of market direction with a positive bias. The FBM KLCI is taking a breather at the 1,500-point level after the recent rebound from the low of 1,423, and it may now move sideways in a range of 1,497 to 1,510 to consolidate itself. A downside breakout below 1,497 will see it falling back to 1,490-point level, while an upside breakout above 1,510 may see it moving higher to test the 240-day moving average (MA) resistance level at 1,520.
MACD continued to climb higher and its histogram is also getting shorter, indicating an improvement in the upward momentum. However, as the MACD line is still below the signal-line, the current pick up in momentum may just be part of a rebound. RSI (14) was higher at 38.3, indicating an improvement in the relative strength. Nonetheless, it is still in the very bearish zone. Stochastic continued to move higher to 55.9, indicating a continuation in the short term up cycle and the improvement in market strength. Readings from the indicators showed that the FBM KLCI is gradually improving in terms of its momentum and strength. Nonetheless, it is still bearish in the broader picture.
The medium and long term trend of the FBM KLCI is still down, while the short term trend has just turned up, as the key index is now closing above the short term 5 and 10-day MA. However, as the 5-day MA is still below the 10-day MA, the current change could be fragile, and this could be just part of a bear market rally, the downtrend could later continue. Immediate support zone is at 1,497 to 1,490, while the overhead resistance zone is at 1,510 to 1,520.
Overnight, the Dow gained +4.28 points or +0.04% to close at 11,410.21. Today, the FBM KLCI is likely to trade within a range of 1,495 to 1,510.
This week's expected range: 1433 – 1525
Today’s expected range: 1495 – 1510
Resistance: 1506, 1508, 1510
Support: 1495, 1497, 1500
Stocks to watch: DIGISTA, PERDANA
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