Stocks on Bursa Malaysia ended broadly higher yesterday with interest in selected blue-chips pushed the FBM KLCI to end above the psychological 1,600-point level. External factors, including weaker regional bourses, had capped the local indices from going up further. The market barometer that opened 0.22 of a point higher at 1,597.39 finished 4.1 points or 0.26% higher at 1,601.27 from Tuesday’s 1,597.17. Decliners led advancers 366 to 360 while 321 counters traded unchanged. Total volume increased to 1.108 billion shares valued at RM1.601 billion from 1.105 billion units valued at RM1.577 billion on Tuesday.
The FBM KLCI opened 0.22 of a point higher at 1,597.39 and slipped to the intra-day low of 1,593.57 within the first five minutes of trading. It then rebounded and continued to move higher with intermittent mild pullback on profit-taking for the rest of the day. The key index hit the high of 1,602.05 before closing slightly off high. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates a continuation of the up move from Tuesday’s rebound. It is now standing above the psychological resistance level of 1,600-point and is expected to continue moving higher today to re-challenge the historical high level of 1,609.33.
MACD was almost flat but its histogram has turned shorter upward, indicating an initial change in the momentum from down to up. RSI (14) was higher at 61.2, indicating a return of the short term relative strength to the bullish zone. Stochastic was marginally lower at 58.8, indicating a mild weakening of the short term strength and the down cycle is still intact. Mixed signals from the indicators showed that the momentum of the FBM KLCI is showing initial signs of reversal but more data is required to confirm this.
The general trend of the FBM KLCI is up as it is staying above all the short, medium and long term moving averages. Immediate overhead resistance zone is at 1,602 to 1,610 while the immediate downside support zone is at 1,593 to 1,586. With overall volume remained at the low level of just above one billion shares, the broad market is likely to remain sluggish with rotational play on penny stocks.
Overnight, the Dow rose +181.19 points or +1.41% to close at 12,986.58. Today, the FBM KLCI is likely to trade within a range of 1,587 to 1,611.
This week's expected range: 1570 – 1630
Today’s expected range: 1587 – 1611
Resistance: 1605, 1608, 1611
Support: 1587, 1590, 1595
Stocks to watch: JOHOTIN, BRAHIMS, OLDTOWN
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