Stocks on Bursa Malaysia ended broadly higher yesterday and persistent buying in selected heavyweights pushed the FBM KLCI to end at its intra-day high of 1,521.73 with a gain of 7.6 points or 0.5%. Gainers thumped losers by 491 to 264, while 301 counters were unchanged. Total turnover rose to 1.64 billion shares worth RM1.71 billion from Friday's closing of 1.47 billion shares worth RM1.39 billion.
The FBM KLCI opened 0.93 point higher at 1,515.06 but pulled back to touch the intra-day low of 1,513.35. It then rebounded to the positive territory and stayed sideways for a major part of the day, and a last minute buying in selected heavyweights pushed the key index to close at the high of the day. Chart wise, the FBM KLCI formed a bullish white candlestick which indicates a confirmed reversal of the key index after four days of consolidation. It is likely to continue climbing higher today with immediate overhead resistance zone at 1,525 to 1,530.
MACD continued to climb higher but its histogram was shorter, indicating a lack of strength and momentum of the key index. RSI (14) was higher at 63.4, indicating the relative strength of the key index is still in the bullish zone. Stochastic was higher at 80.7, and has crossed above the slow stochastic line, indicating that the short term down cycle or correction is probably over and the resumption of the up cycle. Readings from the indicators showed that the short term correction of the FBM KLCI is probably over, and the key index may resume its upward momentum.
With the up move yesterday, the FBM KLCI has resumed its overall uptrend, and is ready to move higher to re-challenge the immediate resistance level of 1,530. The resistance zone formed by the gap at 1,530 to 1,539 may post as a strong barrier to the up move, while the immediate downside support zone is at 1,513 to 1,508. With the volume remained at the current level or higher, the market is poised for a pre-Chinese New Year rally with active rotational play on the second and third liners.
Overnight, the Dow rose +32.77 points or +0.27% to close at 12,392.69. Today, the FBM KLCI is likely to trade within a range of 1,507 to 1,531.
This week's expected range: 1479 – 1549
Today’s expected range: 1507 – 1531
Resistance: 1525, 1528, 1531
Support: 1507, 1510, 1516
Stocks to watch: REDTONE, MUHIBAH, DKSH, BIOOSMO, UNISEM
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