Stocks on Bursa Malaysia closed last Friday on a softer note, dampened by news of a possible slowdown in China's growth and the economic unease in Europe. The market was jolted by an index released on Thursday that showed a renewed weakness in China's manufacturing. The benchmark FBM KLCI, however, closed 2.59 points or 0.16% better at 1,585.83, and on a Friday-to-Friday basis, the benchmark index advanced 14.78 points from 1,571.40 previously. Losers outnumbered gainers by 520 to 282 while 317 counters were unchanged. Total market volume dwindled to 1.997 billion shares worth RM1.41 billion from 2.86 billion shares worth RM1.57 billion on Thursday, while total weekly volume increased to 12.395 billion units worth RM8.044 billion, from 7.479 billion units worth RM8.609 billion the previous week.
The benchmark FBM KLCI opened last Monday 2.9 points higher at 1,574.30 and moved in a range-bound manner, it hit the intra-week low of 1,570.88 before rebounding to close 2.2 points at 1,573.6. Stocks on Bursa Malaysia traded mixed on Tuesday amidst cautious trading on Asian markets, and the FBM KLCI rose 4.02 points to close at 1,577.62. On Wednesday, the FBM KLCI rose 4.91 points to close at 1,582.53 amidst a mixed market but late buying interest in information technology-related counters helped give the local bourse a lift to close higher. The benchmark index rose by a marginal 0.71 point to 1,583.24 on Thursday helped by an ease in worries about China’s economic outlook as the latest data on China’s industrial activities were not as bad as expected, and on Friday, the FBM KLCI gained another 2.59 points to end the week at 1,585.83.
On the weekly chart, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control and made a reversal after two weeks of pullback correction, and the key index is likely to continue moving higher this week. Immediate overhead resistance zone is at 1,594 to 1,597. If the key index is able to breakthrough the all time high level of 1,597.08 successfully, it will try to challenge the psychological resistance level of 1,600. On the daily chart, the FBM KLCI formed a small white candlestick which continued the uptrend, and the small size of the candlestick indicated low volatility and trading in a narrow range. The key index is likely to move higher today continuing its uptrend, and the immediate overhead resistance zone is at 1,587 to 1,594, and the immediate downside support zone is at 1,582 to 1,570.
Weekly MACD continued to climb higher but is tapering off, while the histogram has turned shorter, indicating a slow down in the weekly upward momentum. Daily MACD continued to climb higher and so is the daily histogram, indicating a continued picking up in the daily upward momentum. Nevertheless, as the MACD is still below the signal-line, the current short term uptrend may turn out to be a technical rebound. Weekly RSI (14) has hooked upward to 64.5 from 62.1 previously, indicating the weekly relative strength continued to remain bullish. Daily RSI (14) climbed higher to 62.6, indicating the daily short term relative strength is in a bullish state. Weekly Stochastic, however, continued to slide lower to 88.7 from 90.4 previously, indicating a consolidation mode on the weekly chart. On the contrary, the daily stochastic has climbed higher to 69.3, indicating an improvement of the market strength and continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI’s weekly upward momentum is slowing down and is in a consolidation mode, whereas the daily is showing signs of bullishness and the momentum is also picking up.
The overall trend of the FBM KLCI remained up as the key index is currently staying above all the short, medium and long term moving averages. The uptrend is likely to continue with an immediate target of 1,600-point, if the FBM KLCI is able to breakthrough the 1,600-point level successfully, it will move into an uncharted territory with a possible target of 1,670.
Last Friday, the Dow gained +34.59 points or +0.27% to close at 13,080.73. This week, the FBM KLCI is likely to trade within a range of 1,559 to 1,604, and for today, it is likely to trade within a range of 1,579 to 1,592.
This week's expected range: 1559 – 1604
Today’s expected range: 1579 – 1592
Resistance: 1588, 1590, 1592
Support: 1579, 1581, 1583
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