Stocks on Bursa Malaysia, after going on a roller-coaster ride, ended on a firmer note as investors took a cautious stance on the local bourse. The local market’s direction was underpinned by waning investor sentiment in the region, reacting to the Chinese economy that showed further signs of slowing yesterday. However, the undertone of the local bourse remained firm. The FBM KLCI ended 0.93 point or 0.06% higher at 1,489.95 after opening 0.71 points better at 1,489. Gainers led losers by 407 to 337 while 303 counters were unchanged. A total of 2.329 billion shares, valued at RM1.333 billion, changed hands compared to 1.71 billion shares worth RM1.36 billion last Friday.
The FBM KLCI opened 0.71 point higher at 1,489.73 and fell to the intra-day low of 1,487.35 before rebounding to the intra-day high of 1,492.71. The key index was basically bouncing in and out of the positive and negative zone in a tight range for the whole day before settling marginally higher in the positive zone. Chart-wise, the FBM KLCI formed another Doji candlestick with a narrower day range, indicating indecision of the market direction and the key index was in consolidation mode. The formation of a shooting-star plus two Doji candlesticks over the last three trading sessions showed that the market was facing strong resistance when it came near the 1,500-point level, and was taking a breather after the strong up move. Immediate support is at 1,483 while the overhead resistance is at 1,493, and a break in either one will likely see the key index continue to move in that direction.
MACD continued to rise, indicating a continued improvement in the market momentum. RSI (14) was marginally higher at 60.6 compared with 60.3 on the previous day, indicating a slow down in the bullish relative strength. Stochastic was higher at 81.5 but showed sign of tapering, indicating a reduction the in upward market strength. Readings from the indicators showed that the upward strength of the FBM KLCI was slowing down and might go into a consolidation phase.
The short term trend of the FBM KLCI is up while the medium and longer term trend is sideways. The key index will have to breakthrough the overhead resistance zone of 1,493 to 1,509 in order to continue the uptrend; otherwise it may stage a pullback to close the gap at 1,472 to 1,483. The volume traded yesterday was high but the unit price was low, indicating the market was dominated by trading activities in lower liner stocks, and this trend is likely to continue. Overnight, the Dow rose +78.41 points or +0.65% to close at 12,097.83. Today, the FBM KLCI is likely to trade within a range of 1,481 to 1,499.
This week's expected range: 1410 – 1568
Today’s expected range: 1481 – 1499
Resistance: 1493, 1496, 1499
Support: 1481, 1484, 1487
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