Stocks on Bursa Malaysia closed marginally higher on continued buying momentum in selective counters. However, finance counters succumbed to selling pressure in line with the cautious market sentiment in regional markets. The broader Asian bourses showed a mixed performance underlined by cautious trading, as the Euro-zone debt contagion spread to Italy. The FBM KLCI was 2.95 points or 0.20% higher at 1,480.46 after opening 5.77 points higher at 1,483.28. Gainers beat losers by 408 to 329 with 279 counters unchanged. Turnover was lower at 1.812 billion shares worth RM1.538 billion from 2.302 billion shares worth RM1.512 billion last Friday.
The FBM KLCI opened with an up gap of 5.77 points at 1,483.28 and climbed to the intra-day high of 1,489.91 in the first hour of trade. However, selling pressure due to profit-taking activity pressed the key index to the intra-day low of 1,476.81 before some late buying in selected blue-chips lifted it to close off low. Chart-wise, the FBM KLCI formed a black spinning-top candlestick which indicates indecision of market direction with sellers being more dominant for the day, and hence, the key index is likely to continue to consolidate today. Immediate overhead resistance zone is at 1,488 to 1,493, and a decisive breakout from this resistance zone might see the key index rally towards the 1,500-point level.
MACD was marginally higher, but its histogram turned shorter, indicating the upward momentum is weakening. RSI (14) was slightly higher at 60.3, and has moved into the bullish zone. Stochastic was higher at 83.7 and has just crossed above the slow stochastic line, indicating a possible further up move. Readings from the indicators showed that the FBM KLCI is in consolidation with a bullish upward bias.
The short term trend of the FBM KLCI is up while the medium term trend has turned sideways as the 50 and 60-day moving averages are turning flat. The long term outlook is still slightly bearish as the key index is still staying below most of the longer term moving averages. Immediate overhead resistance zone is envisaged at 1,488 to 1,493 while the immediate downside support zone is at 1,477 to 1,468. Volume traded over the last few days was high but the unit value was low, indicating the market activity was focus on the lower price stocks. Rotational play on second and third liners is likely to continue while the heavyweights may consolidate.
Overnight, the Dow rose +101.79 points or +0.84% to close at 12,170.18. Today, the FBM KLCI is likely to trade within a range of 1,461 to 1,503.
This week's expected range: 1433 – 1534
Today’s expected range: 1461 – 1503
Resistance: 1488, 1496, 1503
Support: 1461, 1469, 1474
Stocks to watch: HIBISCS, HIBISCS-WA, JCY, LATEXX, BENALEC
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