Stocks on Bursa Malaysia closed sharply higher yesterday with the benchmark FBM KLCI surging 12.92 points to 1,569.65, the highest level since July 18 last year. The market rebounded from Tuesday’s losses amid advances in regional bourses as financing from the European Central Bank to avert a credit crunch in the Euro zone bolstered investors’ confidence. Gainers led losers by 535 to 297 while 300 counters were unchanged. Turnover was higher at 1.94 billion shares worth RM2.69 billion from 1.7 billion shares worth RM1.6 billion on Tuesday.
Taking cue from the strong performance of Wall Street overnight, the FBM KLCI opened 0.77 point higher at 1,557.50 and continued to climb higher throughout the day to touch the intra-day high of 1,573.75 before last minute profit-taking pressed the key index to close off high. Chart-wise, the FBM KLCI formed a bullish white candlestick which broke above the resistance level of 1,567-point, and is likely to continue climbing higher today. With this strong breakout, the key index is likely to move higher to test the next target level of 1,577-point follow by the all time high level of 1,597.08.
MACD has hooked upward and the histogram also turned shorter upward, indicating an initial turn in the momentum direction from down to up. RSI (14) has hooked upward sharply to 66.3, indicating a strong increase in the key index’s short term relative strength, which has again back to the bullish zone. Stochastic was slightly lower at 67.3, and starts to taper, indicating a slow down in the downward market strength. Readings from the indicators showed that the FBM KLCI is regaining its upward momentum which may push it to a higher level.
The short term trend of the FBM KLCI has again turn up after two week’s of sideways consolidation, while the medium and longer term uptrend still remained intact. With the bullish breakout yesterday, the benchmark index is likely to move higher to another level with the short term target set at the all time high level of 1,597.08. With the volume again pick up, the broad market will remain active and buoyant.
Overnight, the Dow fell -53.05 points or -0.41% to close at 12,952.07. Today, the FBM KLCI is likely to trade within a range of 1,543 to 1,590.
This week's expected range: 1541 – 1577
Today’s expected range: 1543 – 1590
Resistance: 1577, 1584, 1590
Support: 1543, 1550, 1560
Stocks to watch: GHLSYS, N2N, WELLCAL, CYPARK, JCY
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