Stocks on Bursa Malaysia closed higher on Tuesday with investors increasing their interest in selected heavyweights. Positive economic data in trade and manufacturing statistics, released earlier Tuesday, led to local investors buying up, especially plantation stocks. The FBM KLCI closed 5.89 points or 0.37% higher at 1,597.17 after opening 3.51 points lower at 1,587.77. Gainers outnumbered losers by 365 to 332 while 333 counters were unchanged. Total volume improved to 1.105 billion units valued at RM1.577 billion from Monday’s closing figure of 1.076 billion shares worth RM1.077 billion. Bursa Malaysia was closed yesterday in conjunction with the installation ceremony of Seri Paduka Baginda Yang di-Pertuan Agong.
Taking cue from the weak performance on Wall Street, the FBM KLCI opened with a down gap of 3.51 points at 1,587.77 and slid lower to the intra-day low of 1,586.99 within the first five minutes of trading. The FBM KLCI then rebounded and move higher for the rest of the day to hit the intra-day high of 1,598.53 before pulling back to close off high. Chart-wise, the FBM KLCI formed a bullish white piercing-line candlestick which indicates a fight back of the bulls after being whipped down on Monday. The white piercing-line is a bottom reversal candlestick pattern that requires a follow through rebound for confirmation, and the key index is likely to trade higher today. Immediate overhead resistance is expected at the psychological resistance level of 1,600.
MACD and its histogram continued to slide lower, but the MACD showed sign of tapering off, indicating a reduction in the downward momentum. RSI (14) hooked upward to 58.9 from 55.6 previously, reflecting the rebound in the key index, and the short term relative strength is still in the mildly bullish zone. Stochastic has turned flat at 59.9, signaling a pause in the downward momentum, and nevertheless, the short term cycle is still down. Readings from the indicators showed that the FBM KLCI is currently in a consolidation.
The overall trend of the FBM KLCI remained up, and the short term trend has also reversed up with Tuesday’s rebound as the key index has again closed above the short term 5 and 10-day SMA, and the rebound on Tuesday may carry the key index higher today. Immediate overhead resistance zone is at 1,600 to 1,609 while the downside support zone is at 1,586 to 1,580. With the volume remained thin at around 1.1 billion shares, the overall market is likely to remain in a soft mode with rotational play on the penny stocks.
Overnight, the Dow rose +89.46 points or +0.70% to close at 12,805.39. Today, the FBM KLCI is likely to trade within a range of 1,578 to 1,610.
This week's expected range: 1570 – 1630
Today’s expected range: 1578 – 1610
Resistance: 1602, 1606, 1610
Support: 1578, 1582, 1589
Stocks to watch: MEGB, TGOFFS, YHS
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