Stocks on Bursa Malaysia closed
higher yesterday for the second consecutive day with buying interest seen in
telecommunication blue-chips. The market was riding on the stronger Ringgit and
optimism on China’s
economic growth but the uptrend was limited by profit taking activities. At close,
the FBM KLCI ended 3.19 points or 0.19% higher at 1,639.15 after trading
between 1,632.5 and 1,646.97 throughout the day. Market breadth was negative
with decliners leading advancers by 409 to 401 while 314 counters were unchanged.
Total volume rose to 1.347 billion shares, valued at RM2.013 billion, from Monday’s
1.112 billion shares valued at RM1.509 billion.
The FBM KLCI opened 0.2 of point lower at 1,635.76 and slipped
to the intra-day low of 1,632.50 within the first twenty minutes of trading.
The key index then rebounded and rallied to an intra-day high of 1,646.97 at
mid day, and the afternoon session saw heavy profit-taking activity which
pressed the index to close of high at 1,639.15, charting another record close.
Chart-wise, the FBM KLCI formed a white spinning-top candlestick with a
slightly longer upper shadow which indicates uncertainty and the market was under
some profit-taking selling pressure. The appearance of this candlestick at this
historical high level indicated that the benchmark index might have seen its
top and is likely to correct and consolidate before continuing its journey to a
higher level. Immediate strong overhead resistance zone is at 1,647 to 1,650
while the downside support zone is at 1,632 to 1,621.
MACD and its histogram were higher, indicating a continued
increased in the momentum. RSI (14) was higher at 73.99 from 72.7 previously,
indicating very bullish state of the benchmark index and was overbought for the
short term. Stochastic was higher at 89.7 from 88.9, and has just crossed-over
the slow stochastic line, indicating a reversal of the short term cycle from
down to up. However, a divergence has developed, which indicated that some
internal weakness is developing and a correction is impending. Readings from the indicators showed that the
FBM KLCI is currently in a very bullish state but signs are there that it is
overbought and a correction is expected ahead.
The FBM KLCI is currently in a bullish uptrend, and it has
just crossed over the middle trend line of the uptrend channel. If the key
index is able to stay above the middle line of the trend channel, it is likely
to continue its up move with an upside target of 1,700-point, the upper line of
the trend channel. Overall volume remained lukewarm, and the market is likely
to see more rotational play in the second and third liners with the
index-linked counters leading the direction.
Overnight, the Dow rebounded +78.33 points or +0.62% to
close at 12,805.54. Today, the FBM KLCI is likely to trade within a range of
1,617 to 1,662.
This week's expected range: 1600 – 1650
Today’s expected range: 1617 – 1662
Resistance: 1647, 1654, 1662
Support: 1617, 1625, 1632
This week's expected range: 1600 – 1650
Today’s expected range: 1617 – 1662
Resistance: 1647, 1654, 1662
Support: 1617, 1625, 1632
Stocks to watch: PRESBHD, JOHOTIN, REDTONE, TAMBUN, KFIMA, WCT, HARVEST
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