Stocks on Bursa Malaysia closed higher yesterday in line with regional bourses, as the favourable US and European equity markets lifted investment sentiment, and regional markets rallied sharply with the US economy continuing to recover, boosting the outlook for export earnings. The FBM KLCI rose 6.96 points or 0.41% to close at 1,707.35. The market barometer hovered between 1,700.96 and 1,707.35. Gainers led losers by 344 to 294, with 318 counters unchanged. Volume fell to 734.40 million shares worth RM1.37 billion from Tuesday's 742.42 million shares worth RM1.4 billion.
Taking cue from the strong performance on Wall Street overnight, the FBM KLCI opened 0.57 of a point higher at 1,700.96 and moved higher gradually for the rest of the day with bouts of mild profit-taking along the way. It ended the day at the highest point of the day. Chart-wise, the FBM KLCI formed a bullish white Marubozu candlestick which indicates the bulls were in full control for the day in pushing the index higher, and hence, the FBM KLCI is likely to continue its upward momentum to move higher today. Immediate overhead resistance zone is at 1,710 to 1,716, while the downside support zone is at 1,700 to 1,690.
MACD and its histogram continued to slide lower after making a dead-cross yesterday, indicating the continued loss in the index's momentum. RSI (14) hooked upward to 66.7 from 63.1, reflecting the rebound and the index is still in the bullish zone. Stochastic was lower at 77.9 from 82.5, indicating the further loss in market strength and continuation of the short term down cycle. Mixed readings from the indicators showed that the FBM KLCI is in consolidation mode.
The trend of the FBM KLCI remained up as the key index continued to stay above all the moving averages. However, for the immediate short term, the key index has gone sideways range-bound as the index continues to trade within a range of 1,688 to 1,716. A breakout of this range on either side will see the FBM KLCI continue in that direction. The low volume showed that the majority of investors are still on the sidelines.
Overnight, the Dow fell -43.16 points or -0.29% to close at 14,676.30. Today, the FBM KLCI is likely to trade within a range of 1,696 to 1,713.
This week's expected range: 1669 – 1735
Today’s expected range: 1696 – 1713
Resistance: 1709, 1711, 1713
Support: 1696, 1698, 1703
Stocks to watch: CLIQ-WA, PENERGY, TAMBUN, WTK