Stocks on Bursa Malaysia ended last Friday on a firmer note in quiet trading as regional markets started to wind down ahead of the festive holidays. Window-dressing activities dominated trading as investors sought quality stocks ahead of the year-end. The benchmark FBM KLCI rose by 4.69 points to close at 1,496.15, and week-on-week, the key index rose 29.93 points from previous Friday’s 1,466.22. On the broader market, gainers overwhelmed losers by 413 to 292 while 343 counters were unchanged. Some 942.51 million shares worth RM886.656 million changed hands compared with 1.204 billion shares worth RM1.017 billion on Thursday. Weekly volume dwindled to 7.046 billion shares worth RM4.996 billion from previous week’s 8.274 billion shares worth RM6.181 billion.
The FBM KLCI opened last week 0.56 point higher at 1,466.78 and slid to the intra-week low of 1,463.27 before rebounding to close 11.56 points higher at 1,477.78 on Monday. Taking cue of the weak performance on Wall Street overnight, the FBM KLCI fell 12.61 points to close Tuesday at 1,465.17. On Wednesday, the market was bolstered by upbeat economic data from US and Europe and the key index rose 19.81 points to close at 1,484.98 in line with regional market performance. The benchmark index continues to climb higher Thursday on some cosmetic dressing ahead of the closing of the year to close 6.48 points higher at 1,491.46, and it finished the week to close another 4.69 points at 1,496.15, near the high of the week.
On the weekly chart, the FBM KLCI formed a bullish white candlestick which indicates that the bulls were in control for the week, and it also confirmed the possible reversal signal generated by the spinning-top candlestick formed the previous week. With the strong weekly price action last week, the FBM KLCI is likely to continue its upward momentum to test the psychological resistance level of 1,500-point this week. The FBM KLCI has crossed above the 30-week SMA and the next level of resistance is at 1,506 posted by the 60-week SMA, and if the key index is able to go above this level, it would turn long term bullish again.
On the daily chart, the FBM KLCI formed a bullish white Marubozu candlestick which closed near the high of the day, and the key index is likely to continue moving higher today. Immediate overhead resistance zone is at 1,500 to 1,506, if the key index is able to break through this resistance zone convincingly, then it might rally towards the next target level at 1,530.
Both weekly and daily MACD continued to climb higher, indicating a continued pickup in the benchmark’s momentum. Weekly RSI (14) climb higher to 53.5 from 48.7 a week ago, indicating the weekly relative strength has turned mildly bullish from mildly bearish. Daily RSI (14) was higher at 61.3, indicating the daily relative strength has turned bullish. Weekly Stochastic continued to climb higher to 85.2, indicating a continuation of the weekly up cycle and continued improvement in the weekly market strength. Daily Stochastic has shot up to 92.7 from 67, indicating a strong improvement in the daily market strength. However, as the daily stochastic has moved into the short term overbought zone, some pullback might be expected. Readings from both the weekly and daily indicators showed that the FBM KLCI has turned bullish gradually, and the upward momentum is likely to carry the key index to a higher level.
The short and medium term trend of the FBM KLCI has turned up, while the longer term trend is still basically sideways. However, the FBM KLCI has closed above the 120 and 360-day SMA, indicating the long term trend is also starting to turn bullish. If the key index is able to breakthrough the overhead resistance zone at 1,500 to 1,506 formed by the cluster of long term 200, 240 and 300-day SMA, the index would turn bullish and may rally higher towards the next target of 1,530.
Last Friday, the Dow rose +124.35 points or +1.02% to close at 12,294.00. This week, the FBM KLCI is likely to trade within a range of 1,441 to 1,530, and for today, it is likely to trade within a range of 1,486 to 1,503.
This week's expected range: 1441 – 1530
Today’s expected range: 1486 – 1503
Resistance: 1499, 1501, 1503
Support: 1486, 1488, 1492
1 comment:
The volume is not significantly high. Even if FBMKLCI can close above 1500, I afraid that FBMKLCI may not have sufficient momentum to sustain the breakout.
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