Stocks on Bursa Malaysia closed higher yesterday on gains in selected blue-chips. Although the market failed to make a breakthrough yesterday the momentum has been set for it to further move up and try breaks the resistance in the near term. The FBM KLCI rose 5.44 points or 0.34% to close at 1,589.22 after hitting the intra-day high of 1,594.72. Advancers led decliners by 391 to 325 while 414 counters were unchanged. Total volume declined to 1.448 billion shares valued at RM1.760 billion from 1.630 billion shares valued at RM1.934 billion last Friday.
The FBM KLCI opened 2.87 points higher at 1,586.65 and continued moving higher to touch the intra-day high of 1,594.72 at mid morning. Profit-taking activity sets in and sent the key index lower for the rest of the day to close off high. Chart-wise, the FBM KLCI formed a white shooting-star candlestick which indicates the bulls were initially dominant but later the bears surfaced to press down the key index. A shooting-star candlestick is a potential top reversal candle formation, and hence, the FBM KLCI is likely to pullback on profit-taking.
MACD continued to climb higher after making the golden-cross, indicating a good follow through buying momentum which pushed the key index higher. RSI (14) was higher at 73.9, indicating a very bullish short term relative strength; however, as it has gone into the short term overbought zone, a pullback on profit-taking is likely to happen. Stochastic was higher at 89.4, indicating very strong market strength and continuation of the up cycle, but is has showed sign of tapering off, hence the up move may take a pause. Readings from the indicators showed that the FBM KLCI is currently in a very bullish state, but is short term overbought, hence might pullback to correct itself.
The trend of the FBM KLCI is up and bullish, and it is likely to test the all-time-high level of 1,597.08 in the near term. As there are already signs of toppishness, the key index may pullback first before scaling new high. Immediate overhead resistance zone is envisaged at 1,597 to 1,600 while the downside support zone is at 1,586 to 1,577. With total volume continued to shrink, the overall market is likely to go into consolidation mode but the focus on index-linked counters will stay.
Overnight, the Dow fell -14.76 points or -0.11% to close at 12,962.81. Today, the FBM KLCI is likely to trade within a range of 1,576 to 1,604.
This week's expected range: 1527 – 1622
Today’s expected range: 1576 – 1604
Resistance: 1594, 1599, 1604
Support: 1576, 1581, 1585
No comments:
Post a Comment