Stocks on Bursa Malaysia ended
higher yesterday despite the weaker regional markets, helped by gains in
banking and plantation stocks. The regional sentiment was affected by concern
over Spain’s struggling banks and the country’s rising borrowing costs, with
charts pointing to more gloom ahead, and indications that China might adopt a
cautious approach in stimulating its economy also prompted investors to sell
equities. The FBM KLCI closed 9.85 points or 0.63% higher at 1,575.17 after
opening 2.89 points higher at 1,568.21. Gainers led losers by 378 to 331 while
318 counters were unchanged. Turnover rose to 920.86 million shares worth
RM1.25 billion from 756.53 million shares worth RM984.41 million on Tuesday.
Taking cue from the strong performance of the Dow overnight,
the FBM KLCI opened with an up gap of 2.89 points at 1,568.21 and slipped to
the intra-day low of 1,564.60 on profit-taking activity, and moved sideways.
The key index broke out from its sideways range in the afternoon and rallied to
the intra-day high of 1,578.28 before pulling back to close off high.
Chart-wise, the FBM KLCI formed a bullish white candlestick which continued its
previous uptrend. With the up move yesterday, the key index managed to close
the gap area at 1,571 to 1,575 but was not able to get through the resistance
at 1,579 posted by the 50 and 60-day SMA. If the FBM KLCI is able to clear the
resistance at 1,579, it might run up to the next target level of 1,591,
otherwise, it may pull back to consolidate after five consecutive days of
gains.
MACD was higher and so is the histogram, indicating a
continued increase in the upward momentum. Nevertheless, as the MACD is still
below the zero-line, the current up move may just be a technical rebound in a
bigger downtrend. MACD will only turn bullish if the FBM KLCI is able to close
above 1,580-point level. RSI (14) was higher at 55.1 from 50.4 previously,
indicating the short term relative strength of the FBM KLCI had turned mildly
bullish. Stochastic was higher at 60.5, indicating a continued improvement of
the market strength and continuation of the short term up cycle. Readings from the
indicators showed that the FBM KLCI has gradually turned mildly bullish, and
there are still rooms for improvement.
With the strong upward move yesterday, the FBM KLCI has
broken out of the downtrend channel as well as closing above the 30-day SMA,
indicating the short term trend has reversed up. Nonetheless, the key index is
still below the medium term 50 and 60-day SMAs, if only the FBM KLCI is able to
close above this two medium term moving averages, the benchmark index would
again turn bullish, and the long term trend still remained up. Immediate
overhead resistance zone is at 1,578 to 1,591 while the downside support zone
is at 1,565 to 1,550.
Overnight, the Dow fell -160.83 points or -1.28% to close at
12,419.86. Today, the FBM KLCI is likely to trade within a range of 1,553 to
1,592.
This week's expected range: 1517 – 1573
Today’s expected range: 1553 – 1592
Resistance: 1581, 1587, 1592
Support: 1553, 1559, 1567
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