Stocks on Bursa Malaysia closed sharply higher last Friday, prompted by firmer regional markets. The benchmark FBM KLCI rose by 10.33 points or 0.66% to close at 1,583.78, and on a weekly basis, it gained 25.01 points from the previous Friday’s close of 1,558.77. Advancers led losers by 540 to 276 while 330 counters were unchanged. Turnover rose to 1.63 billion shares worth RM1.93 billion from 1.62 billion shares worth RM2.02 billion on Thursday. Weekly volume decreased to 8.560 billion shares worth RM9.87 billion from 9.635 billion shares worth RM9.345 billion the previous week.
The FBM KLCI opened 1.86 points higher at 1,560.63 on last Monday but ended the day only 0.27 of a point higher to close at 1,559.04 with profit-taking activities seen in selected blue-chip counters. Investor sentiment was dampened following an increase in oil prices and the absence of a new catalyst for markets regionally. The FBM KLCI ended 2.31 points lower at 1,556.73 on Tuesday on continued profit-taking activity after hitting intra-week low of 1,552.62. On Wednesday, the market rebounded from Tuesday’s losses amid advances in regional bourses as financing from the European Central Bank to avert a credit crunch in the Euro zone bolstered investors’ confidence, and the key index gained 12.92 points to 1,569.65. The FBM KLCI rose by 3.80 points to close at 1,573.45 on Thursday amid a mixed market. On Friday, the benchmark continued its climb to touch the intra-week high of 1,587.11 before pulling back on profit taking to close the week at 1,583.78.
On the weekly chart, the FBM KLCI formed a bullish white candlestick which staged a breakout from the consolidation. With this bullish breakout, the benchmark index is likely to move higher to re-test the historical high of 1,597.08 registered on July 11th, 2011 with an immediate target of 1,600-point. A successful breakthrough of the 1,600-point level may even see the FBM KLCI moving higher with a possible target level of 1,675. On the daily chart, the FBM KLCI formed a bullish white candlestick, with a three-white-soldiers candle pattern formation, which indicates a very bullish upward move. The breakthrough of the 1,577 resistance level with strong conviction indicates the benchmark index is likely to move higher to re-test the historical high level of 1,597.08 sometimes this week.
Weekly MACD continued to move higher with its histogram also turning longer, indicating the weekly momentum has again pick up after two weeks of consolidation. Daily MACD also continued its up move after hooking up two sessions ago and has just made a golden-cross, issuing a bullish buy signal. Weekly RSI (14) was higher at 65.6 from 61.7 a week ago, indicating the weekly relative strength is turning more bullish. Daily RSI (14) surged higher to 72 from 67.9, and has entered the very bullish zone. It is short term overbought, and some profit-taking maybe expected ahead. Weekly Stochastic was at 95.2, indicating a very strong weekly market strength, and daily stochastic was higher at 88.5, indicating a continuation of the daily up cycle and a strong daily market strength. Readings from the weekly and daily indicators showed that the FBM KLCI is currently is a very bullish state, and its bullish momentum is likely to carry it to a higher level with some profit-taking along the way.
The trend of the FBM KLCI remained up and is bullish. Immediate overhead resistance zone is envisaged at 1,597 to 1,600 while the downside support zone is at 1,577 to 1,567. From the fundamental side, a better global sentiment, strong US jobs data, positive China manufacturing data and better credit market in the Eurozone will provide an upside momentum to share prices on Bursa Malaysia.
Last Friday, the Dow fell a marginal -2.73 points or -0.02% to close at 12,977.57. This week, the FBM KLCI is likely to trade within a range of 1,527 to 1,622, and for today, it is likely to trade within a range of 1,549 to 1,566.
This week's expected range: 1527 – 1622
Today’s expected range: 1564 – 1600
Resistance: 1589, 1595, 1600
Support: 1564, 1569, 1576
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