Stocks on Bursa Malaysia ended marginally higher yesterday prompted by gains in small cap stocks. The rise was in-line with the positive quarterly results being reported by several companies, and, other regional bourses also broadly rose, in sync with China’s service sector data which climbed to an 11-month high. The FBM KLCI was 1.83 points or 0.11% better at 1,725.56, after fluctuating between 1,723.22 and 1,729.91 throughout the day. Losers led gainers by 388 to 383 with 334 counters unchanged. Total volume eased to 1.22 billion units valued at RM1.39 billion from 1.34 billion units valued at RM1.53 billion registered on Tuesday.
After falling 20.46 points the previous day, the FBM KLCI opened 0.2 of a point lower yesterday at 1,723.53 and slipped lower to hit the intra-day low of 1,723.22 briefly after opening. The key index rebounded from the day’s low and climbed higher gradually to touch the intra-day high of 1,729.91 at noon. However, the uptrend was met with profit taking which dragged the FBM KLCI lower from its day’s high in the afternoon session. Chart-wise, the FBM KLCI formed a white inverted hammer candlestick in bullish Harami position, in which both the one-day and two-day patterns indicates consolidation and potential reversal. Hence, the FBM KLCI is likely to further consolidate with an upward bias. Immediate overhead resistance zone is at 1,730 to 1,738, while the immediate downside support zone is at 1,723 to 1,714.
MACD and its histogram were marginally higher, indicating a state of consolidation. RSI (14) hooked upward slightly to 51.3 from 50.6, indicating a mild rebound of the key index and a mildly bullish bias state of the FBM KLCI. Stochastic hooked downward to 73.2 from 75.6 but is still above the slow stochastic line, indicating a mild pullback correction. Readings from the indicators showed that the FBM KLCI is in a state of consolidation and is likely to further consolidate until a breakout is seen.
The technical picture of the FBM KLCI still remained very much the same in that the short term trend is sideways range-bound, while the medium and long term trend is still down. Nonetheless, the near term trend of the FBM KLCI is up as the key index is staying above the 5, 10, 20 and 30-day simple moving averages. For the near term, the FBM KLCI is likely to continue its sideways range-bound movement within a range of 1,695 to 1,738 with an upward bias.
Overnight, the Dow fell 10.22 points or -0.06% to close at 17,540.47. Today, the FBMKLCI is likely to trade within a range of 1,715 to 1,736.
This week's expected range: 1677 – 1750
Today’s expected range: 1715 – 1736
Resistance: 1729, 1732, 1736
Support: 1715, 1719, 1722
Stocks to watch: AT, BAHVEST, BENALEC, BTM, CSCENIC, DAYA, EATECH, ELSOFT, JERASIA, KPJ, LIONDIV, MYEG, NAIM, NTPM, OKA, OMESTI, POHUAT, REXIT, RGB, STONE, TOPGLOV, WELLCAL, YSPSAH, YOCB
Stock pick highlight: BAHVEST (0098)
Last Price: RM0.965 +0.04
Support Level: RM0.945, RM0.905
Resistance Level: RM0.98, RM1.00, RM1.04, RM1.06, RM1.10, RM1.13, RM1.16, RM1.20, RM1.25, RM1.30, RM1.36
Entry Level: RM0.96 – RM0.97
BAHVEST (0098) rebounded from its intra-day low of 0.945 to close higher at 0.965 after hitting the intra-day high of 0.98. Technically, the chart of BAHVEST formed a bullish white candlestick with increasing volume indicating strong buying interest came into the stock yesterday. It breaks out from the consolidation forming a Pennant pattern breakout. MACD swung upward and is above the signal-line, and its histogram contracted downward marginally, indicating a state of consolidation with an upward bias and a buy signal. RSI (14) rose to 62.4 from 58.9, indicating the stock is turning bullish. Stochastic rose to 69.7 from 64.4 and made a golden-cross over the slow stochastic line, issuing a stochastic buy signal, indicating the possible beginning of a short term up cycle. The medium and long term trend of BAHVEST is sideways to up, and the short term trend is up with the 5-day SMA staying above the 10-day SMA and both are above the 30-day SMA, and a confirmed breakout above RM0.98 will see an upside target of RM1.00, follow by RM1.04, RM1.06, RM1.10, RM1.13, RM1.16, RM1.20, RM1.25, RM1.30, and RM1.36.
Since the short term trend is bullish, day traders with shorter time frame perspective may ride on the short term bullishness and buy on breakout level (RM0.98). Those with lower risk appetite should wait at the side-line and buy on the dip.
Short Term – target price at (RM1.00, RM1.04, RM1.06, RM1.10, RM1.13), stop loss (RM0.94)
Mid Term – target price at (RM1.16, RM1.20, RM1.25, RM1.30, RM1.36), stop loss (RM0.90)
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