Stocks on Bursa Malaysia ended on a mixed note yesterday but late buying interest in information technology-related counters helped give the local bourse a lift to close higher. Profit-taking was seen earlier, dampened by worries over the deeper-than-expected slowdown in China’s economic growth. The benchmark FBM KLCI rose 4.91 points or 0.31% to close at 1,582.53. Advancers led losers by 384 to 338 while 371 counters were unchanged. Turnover rose to 3.59 billion shares worth RM1.79 billion from 2.14 billion shares worth RM1.76 billion on Tuesday.
The FBM KLCI opened 2.24 points lower at 1,575.38 and slid to the intra-day low of 1,573.17 within the first fifteen minutes of trading. The benchmark index then rebounded and moved higher gradually for the rest of the day to close near the highest point of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control, and the key index is likely to move higher today. Immediate overhead resistance is at 1,583.55, and a break above this level is likely to see the FBM KLCI moving higher to re-test the gap at 1,585 to 1,589.
MACD hooked upward and its histogram also turned shorter upward, indicating a reduction in the downward momentum and appearance of the first sign of a possible bullish upswing. RSI (14) was higher at 60.8, indicating the return of the short term relative strength to the bullish zone. Stochastic hooked upward to 49.95 and has crossed above the slow stochastic line, indicating a reversal of the short term down cycle. Readings from the indicators showed that the FBM KLCI is showing signs of turning bullish again and more data is required to confirm it.
The short term trend of the FBM KLCI is still sideways range-bound; however, there are signs of bullishness appearing from the candlestick and indicators. Nevertheless, the medium and longer term uptrend still remained intact. Immediate overhead resistance zone is at 1,583 to 1,594 while the downside support zone is at 1,573 to 1,562. With volume surging above the two billion shares level which was contributed much from active trading in the penny stocks, the broad market is likely to see more rotational play on the lower liners.
Overnight, the Dow fell -45.57 points or -0.35% to close at 13,124.62. Today, the FBM KLCI is likely to trade within a range of 1,566 to 1,593.
This week's expected range: 1541 – 1605
Today’s expected range: 1566 – 1593
Resistance: 1586, 1590, 1593
Support: 1566, 1569, 1576
Stocks to watch: GTRONIC, NOTION
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