Stocks on Bursa Malaysia ended higher yesterday in line with regional bourses riding on the improved external sentiment. The FBM KLCI was 5.27 points or 0.32% higher at 1,627.35, after opening 0.96 of a point lower at 1,621.12, and hovered between 1,619.97 and 1,627.35 during the whole trading session. Advancers led decliners by 326 to 296 with 325 counters unchanged. Total volume rose to 850.5 million shares worth RM1.4 billion from last Friday’s closing of 831.6 million shares worth RM1.5 billion.
The FBM KLCI opened 0.96 of a point lower at 1,621.12 and slipped lower to the intra-day low of 1,619.97 within the first forty five minutes on cautious note. The benchmark index rebounded and climb higher gradually for the rest of the day to end at the highest point of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates continuation of the previous day's rise on buying support for selected blue-chip stocks. Hence, the FBM KLCI is likely to rise further to test the immediate overhead resistance zone at 1,630 to 1,635, and the immediate downside support zone is at 1,620 to 1,611.
MACD continued to rise and has made a golden-cross over the signal-line, flashing out a short term buy signal for the FBM KLCI. However, as the golden-cross took place below the zero-line, the buy signal may turn out to be just a technical rebound in a still bearish market. The key index would only turn bullish when the MACD crosses above the zero-line, or the 1,650-point level. RSI (14) was higher at 45 from 40.9, indicating the index is moving higher into the mildly bearish zone. Stochastic was higher at 56.1 from 43.1, indicating the market strength is turned strong and continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI is gradually turning more positive or less bearish, and is likely to rise further.
The short term trend of the FBM KLCI has just turned up as the key index has closed above the 5, 10 and 20-day SMA. The medium term trend, however, is still down as the index is still below the 30, 50 and 60-day SMA, and the long term trend has also just turned up as the index has again closing above the 200 and 240-day SMA. The rebound may send the key index higher but from a bigger picture, the FBM KLCI has gone into a sideways range-bound phase and likely to move within a range of 1,600 to 1,650.
Overnight, the Dow fell 216.40 points or -1.55% to close at 13,784.17. Today, the FBM KLCI is likely to trade within a range of 1,615 to 1,635.
This week's expected range: 1574 – 1660
Today’s expected range: 1615 – 1635
Resistance: 1629, 1632, 1635
Support: 1615, 1617, 1622