Stocks on Bursa Malaysia closed higher yesterday on fresh buying interest in selected heavyweights amid recent losses. The market sentiment was lifted by the stronger-than-expected economic data from China which boosted market confidence and prompted investors to take positions. The key FBM KLCI gained 10.30 points or 0.68% to 1,519.36 after opening 0.55 of a point higher at 1,509.61. Market breadth was positive with 433 gainers and 330 losers. Trading volume rose to 1.44 billion shares worth RM1.79 billion as compared with Monday’s 1.43 billion shares worth RM1.36 billion.
The FBM KLCI opened 0.55 of a point higher at 1,509.61, the low of the day, and moved higher gradually to hit the intra-day high of 1,520.27 before pulling back slightly to close at 1,519.36. Chart wise, the FBM KLCI formed a bullish white candlestick in Harami position which indicates a counter-attack of the bulls after a day of retreat, and the key index is likely to climb higher today on follow through momentum. Immediate overhead resistance zone is at 1,521 to 1,526. If the FBM KLCI is able to breakthrough this zone, then it might move higher to re-test the next resistance level at 1,530-point.
MACD continued to slide lower after making the dead-cross, indicating a continued loss in momentum. RSI (14) hooked up to 59 from 54.6, indicating a recovery of some loss strength, but is still in the mildly bullish zone. Stochastic continued to slide lower to 65, indicating a continued loss in the market strength and continuation of the down cycle. Readings from the indicators showed that the FBM KLCI is losing its momentum and is likely to continue with its consolidation until clear sign of reversal is observed.
The immediate short term trend of the FBM KLCI is down; nonetheless, the longer term trend remained up. Immediate downside support zone is at 1,509 to 1,501 while the overhead resistance zone is at 1,526 to 1,530. With the losing momentum, the FBM KLCI is likely to move range-bound within these range until a clear sign of breakout is observed. Overnight, the Dow rose +60.01 points or +0.48% to close at 12,482.07. Today, the FBM KLCI is likely to trade within a range of 1,501 to 1,531.
This week's expected range: 1502 – 1540
Today’s expected range: 1501 – 1531
Resistance: 1524, 1528, 1531
Support: 1501, 1505, 1512
Stocks to watch: HAIO, MAYBULK, PMETAL, E&O, 3A
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