Stocks on Bursa Malaysia ended firmer yesterday on bargain-hunting activities, with sentiments largely lifted by better-than-expected manufacturing activity data from China, which averted fears of a hard landing of the world's second largest economy. The outlook remained volatile given the persistent worries over a global recession and ongoing Euro-zone jitters. The FBM KLCI rose 10.21 points or 0.69% to 1,482.37, after touching an intra-morning low of 1,469.66. Advancers outnumbered decliners by 488 to 274 while 256 counters were unchanged. A total of 875.521 million shares worth RM1.762 billion were traded, up from 853.772 million shares valued at RM1.672 billion traded on Monday.
The FBM KLCI opened 2.20 points higher at 1,474.36 and moved lower on profit-taking activity to hit the intra-day low of 1,469.66 at mid morning. It then rebounded and gradually climbed higher to close at the day’s highest level. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were making a counter-attack after being beaten down over the last three sessions, and the key index is likely to continue with its rebound to move higher today. Immediate strong overhead resistance zone is anticipated at 1,487 to 1,497, posted by the moving average (MA) cluster and the gap that formed on August 19. In order to reverse the current downtrend, the FBM KLCI will have to close above the 1,510-point level over the next few sessions; otherwise, any up move is considered as only a rebound in a bearish downtrend.
MACD hooked upward gently and its histogram also turned shorter, reflecting the rebound. Nevertheless, MACD is still below the signal-line as well as the zero-line, indicating a still bearish scenario. RSI (14) has hooked upward to 34.9 from 29 previously, moving out from the very bearish zone to the bearish zone. Stochastic continued to slide lower to 42.6, indicating the short term down cycle is still in force. Readings from the indicators showed that the FBM KLCI is still currently bearish with weak momentum, and may continue to stay range-bound until positive signals appeared.
The trend of the FBM KLCI remained down. However, the very long term trend as indicated by the 360-day MA is still up. If the support by the very long term 360-day MA, currently at 1,458, is violated, then another major down move to 1,400-point level can be expected.
Overnight, the Dow rose +322.11 points or +2.97% to close at 11,176.76. Today, the FBM KLCI is likely to trade within a range of 1,461 to 1,496.
This week's expected range: 1438 – 1524
Today’s expected range: 1461 – 1496
Resistance: 1487, 1491, 1496
Support: 1461, 1465, 1473
Stocks to watch: DIGISTA, PERDANA