Stocks on Bursa Malaysia closed mixed yesterday. However, a last-minute buying in selected heavyweights pushed the local benchmark to close in positive territory. Most of the Southeast Asian stock markets rose yesterday boosted by strong reading of Chinese manufacturing data, which also lifted the broader sentiment. The FBMKLCI was 5.22 points or 0.28% higher at 1,877.05, after moving between 1,867.78 and 1,877.05 throughout the day. Losers led gainers by 436 to 425, with 338 counters unchanged. Total volume decreased to 2.03 billion units valued at RM1.99 billion from 2.33 billion units valued at RM2.06 billion transacted on Wednesday.
The FBMKLCI opened 1.83 points higher at 1,873.66 but slipped lower on profit-taking activity to hit the intra-day low of 1,867.78 within the first forty five minutes after opening. The FBMKLCI rebounded from the low and moved sideways range-bound in a tight range for the rest of the day, and a last minute buying on selected blue-chips pushed the key index to close at the highest point of the day. Chart-wise, the FBMKLCI formed a bullish white hammer candlestick, a bottom reversal candlestick pattern which indicates the bulls or buyers took control after being beaten initially. Hence, the FBMKLCI is likely to move higher today if the buying momentum continues. Immediate overhead resistance is at 1,879, while the immediate downside support is at 1,867.
MACD was marginally lower, but its histogram contracted upward for the second bar, indicating further reduction in the bearish momentum. RSI (14) was higher at 47.3 from 42, indicating an improvement in the short term relative strength to the bullish side of the mildly bearish state. Stochastic was higher at 21 from 11.3, and has made a golden-cross over the slow stochastic line, issuing a stochastic buy signal and indicating the possible beginning of a short term up cycle. Readings from the indicators showed that the FBMKLCI is showing signs of turning bullish for the short term, and hence, may continue its rebound to move higher.
The short term trend of the FBMKLCI still remained down. However, the bullish close yesterday has brought the key index above the 5-day SMA, giving a first sign of possible short term trend reversal. Nonetheless, the key index is still below the 10, 20 and 30-day SMA, and in order for the FBMKLCI to reverse its current downtrend, it will have to close above the 30-day SMA which is currently posting as a strong resistance at 1,882-point level. Nevertheless, the long term uptrend is still intact, and hence, current weakness actually posted an opportunity to buy into quality shares for longer term gain as the year-end target of 1,900 to 1,920 still remained intact. Bursa Malaysia will be closed on next Monday and Tuesday for Hari Raya Aidilfitri celebration, and we take this opportunity to wish all our Muslim readers “Selamat Hari Raya, Maaf Zahir dan Batin” and all others a happy and enjoyable holiday.
Overnight, the Dow fell a marginal 2.83 points or -0.02% to close at 17,083.80. Today, the FBM KLCI is likely to trade within a range of 1,861 to 1,886.
This week's expected range: 1840 – 1918
Today’s expected range: 1861 – 1886
Resistance: 1880, 1883, 1886
Support: 1861, 1864, 1870
Stocks to watch: AZRB, EUPE, DESTINI, GPHAROS, GOCEAN, HOMERIZ, HUNZPTY, ILB, K1, LEONFB, LIONIND, MAHSING, MFLOUR, NIHSIN, PASDEC, TEOSENG, TUNEINS, ZELAN
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