Stocks on Bursa Malaysia ended on a softer note yesterday amid profit-taking, while the FBM KLCI closed a shade higher. Meanwhile, markets in the region made modest gains as Greece passed an austerity bill to secure a second bailout package to avoid a debt default. The FBM KLCI stood at 1,562.82 at the close yesterday, up 1.16 points, or 0.074%, after opening 1.31 points lower at 1,560.35. Losers outnumbered gainers by 517 to 364 while 321 counters were unchanged. Turnover fell to 2.661 billion shares worth RM2.119 billion from 3.35 billion shares worth RM2.81 billion last Friday.
Taking cue from the weak performance on Wall Street last Friday, the FBM KLCI opened 1.31 points lower at 1,560.35 and slid lower for a major part of the day with intermittent rebound to hit the intra-day low of 1,558.06. However, a last minute buying of selected blue-chips managed to lift the key index to close in the positive territory. Chart wise, the FBM KLCI formed a small white piercing-line candlestick which indicates a reversal after the profit-taking correction is over. Hence, the FBM KLCI is likely to move higher today, and the immediate overhead resistance is at 1,565-point level.
MACD continued to climb higher while the histogram was just marginally higher, indicating the upward momentum is still intact but showed sign of a slow down. RSI (14) hooked up slightly to 71.1, indicating the short term relative strength of the FBM KLCI is still very bullish. Stochastic slid marginally lower to 96.3, reflecting the correction over the last two sessions. Nonetheless, it is still above the slow stochastic line, and the short term up cycle is still intact. Readings from the indicators showed that the FBM KLCI is undergoing a mild correction, but the underlying strength is still intact. The key index is likely to resume its upward move to scale new high once the correction is over.
The overall trend of the FBM KLCI remained up and bullish although the key index is undergoing a correction now. Immediate overhead resistance zone is at 1,565 to 1,577 while the immediate downside support zone is at 1,558 to 1,553. If the key index is able to break through the 1,567-point resistance level, it is likely to move higher to the next target level of 1,577. Trading activities have slowed down slightly with the overall volume sliding below the 3 billion shares mark. Nevertheless, rotational play on the second and third liners will still dominate the scene while the blue-chips continued to consolidate.
Overnight, the Dow rose +72.81 points or +0.57% to close at 12,874.04. Today, the FBM KLCI is likely to trade within a range of 1,554 to 1,568
This week's expected range: 1524 – 1589
Today’s expected range: 1554 – 1568
Resistance: 1565, 1566, 1568
Support: 1554, 1556, 1559
Stocks to watch: PELIKAN, DIGISTA
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