Stocks on Bursa Malaysia ended in the positive territory on continued buying interest for finance and plantation counters. Market sentiment was also in tandem with the bullish start on the European stock market buoyed by the US Federal Reserve’s announcement that it would likely keep interest rates low until 2014. The FBM KLCI ended 4.1 points or 0.27% higher at 1,523.86 after opening 0.91 point higher at 1,520.67. Gainers overwhelmed losers by 524 to 233 with 305 counters unchanged. A total of 1.96 billion shares, worth RM1.69 billion, were transacted compared with 1.34 billion shares, worth RM1.54 billion, registered on Wednesday.
The FBM KLCI opened 0.91 of a point higher at 1,520.67 and moved in a tight range in the positive territory between the intra-day low of 1,519.86 and the high of 1,523.86 throughout the day. Chart wise, the FBM KLCI formed a small white candlestick in bullish Harami position which indicates consolidation with an upward bias. The key index continued to move within the triangle pattern with immediate overhead resistance at 1,527 while the downside support is at 1,515.
MACD continued to slide lower but its histogram was slightly taller indicating a slow down in the downward momentum and sign of a possible up swing. RSI (14) hooked upward to 60.2, indicating the short term relative strength of the key index has again moved into the bullish zone. Stochastic continued to climb higher to 79.2, indicating an improvement in the market strength and continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI is gradually turning stronger and likely to move out of the current consolidation mode soon.
The short term trend of the FBM KLCI is sideways range-bound but with an upward bias, while the longer term trend still remained up. Immediate overhead resistance zone is at 1,527 to 1,530, and a breakout from this resistance zone is likely to see the key index moving higher towards the next target level of 1,550. Judging from the overall volume of nearly 2 billion shares yesterday, the market is likely to remain active with rotational play on second and third liners while the key heavyweights might continue to consolidate.
Overnight, the Dow fell -22.33 points or -0.18% to close at 12,734.63. Today, the FBM KLCI is likely to trade within a range of 1,517 to 1,528.
This week's expected range: 1499 – 1537
Today’s expected range: 1517 – 1528
Resistance: 1526, 1527, 1528
Support: 1517, 1518, 1521
Stocks to watch: KNM, 3A, NAIM, REDTONE
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