Stocks on Bursa Malaysia ended on a firm note yesterday, in line with the stronger close on Wall Street and European markets overnight. The gain was bolstered by upbeat economic data from US and Europe and the positive external vibes had also spilled over to Asian bourses yesterday. The FBM KLCI rose 19.81 points or 1.35% to close at 1,484.98. Gainers led losers by 405 to 307 while 336 counters were unchanged. Turnover rose to 1.655 billion shares worth RM1.321 billion from 1.642 billion shares worth RM738.23 million yesterday.
Taking cue from the strong close on Wall Street overnight, the FBM KLCI opened with an up gap of 7.75 points at 1,472.92 and surged to the intra-day high of 1,487.15. The key index made a pullback on profit-taking but late buying interest on selected blue-chips manage to lift the index to close near the high. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control for the day, and the bullish momentum might carry the key index higher today. The FBM KLCI had attempted to break the resistance zone of 1,484.81 to 1,487.36 formed by the down gap on December 6, but failed. However, it may re-test the resistance zone of 1,485 to 1,493 today, if successfully break through, the benchmark index may continue to move higher to re-test the psychological resistance level of 1,500-point.
MACD had turned upward and made a golden-cross over the signal-line, flashing a buy signal, and this indicates a breakout of the key index from the consolidation state to stage an up move. RSI (14) had turned upward to 57.6, signaling the short term relative strength of the key index had turned mildly bullish from neutral with a bearish bias the day before. Stochastic had swing up to 55.2 from 44.8, and has crossed above the slow stochastic line, indicating a change in the market momentum from down to up. Readings from the indicators showed that the momentum of the FBM KLCI had made a change from consolidation with a downward bias state to a mildly bullish state, and if the positive change in the momentum can continue, it is able to carry the key index higher.
The short term trend of the FBM KLCI has again turned upward with the strong up move yesterday. The medium term trend has also showed sign of turning up as the 50-day SMA has already trend upward while the 60-day SMA has started to curve upward. The long term trend is sideways as most of the long term moving averages are staying flat. Nonetheless, the FBM KLCI had made a bullish crossover the 120-day SMA yesterday, signaling a possible beginning of a new bull trend. Whatever it is, the key index will still have to break above the 1,507-point level in order for it to turn long term bullish again.
Overnight, the Dow rose +4.16 points or +0.03% to close at 12,107.74, and today, the FBM KLCI is likely to trade within a range of 1,460 to 1,503.
This week's expected range: 1425 – 1501
Today’s expected range: 1460 – 1503
Resistance: 1491, 1497, 1503
Support: 1460, 1466, 1475
Stocks to watch: CYBERT, CIHLDG, SUNWAY
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