Stocks on Bursa Malaysia ended marginally higher last Friday as the local bourse rebounded on the back of an improved risk appetite and in tandem with the upbeat overnight performance of Wall Street, which embraced a bullish tone as the Federal Reserve conveyed a bias towards delaying rates hike, but with some flexibility on economic conditions. The benchmark FBM KLCI rebounded 0.34 point or 0.02% towards the end of trading to 1,821.21, after moving between 1,811.74 and 1,825.65. On a weekly basis, the FBM KLCI rose 13.34 points from 1,807.87 on previous Wednesday. Losers outpaced gainers by 484 to 367 with 302 counters unchanged. Total volume rose to 2.2 billion shares worth RM2.7 billion from 1.9 billion shares worth RM2 billion on Thursday. Weekly turnover increased to 10.45 billion units, worth RM10.62 billion, from 4.62 billion units, worth RM4.50 billion, recorded on the previous holiday-shortened week.
Taking cue from the strong close on Wall Street the previous Friday, the FBM KLCI opened 3.14 points higher at 1,811.01 but slipped lower on profit-taking activity to hit the intra-week low of 1,804.95. However, the key index rebounded from the low to end Monday 1.52 points better at 1,809.39. On the back of improved sentiment as investors and bargain hunters continued nibbling selectively at value buys after the long Lunar New Year holiday, the FBM KLCI rose 9.29 points to 1,818.68 with MISC as the top contributor to the key index with its +3.20 points contribution. Wednesday saw the FBM KLCI closing 2.82 points lower to 1,815.86 as profit-taking set in on selected blue-chips with Felda Global Ventures (FGV) leading the losers, dipping 38 Sen to RM2.56 as the global agricultural and agri-commodities giant’s pre-tax profit for the financial year (FY) ending Dec 31, 2014 dipped 47.2% from previous FY to RM826.37 million. The FBM KLCI rebounded on Thursday to close 5.01 points higher at 1,820.87 with Maybank emerged as the top contributor to the gain in the key index on news its profit beat estimates. Friday saw the FBM KLCI went into a consolidation mode but manage to close marginally higher on last hour buying of TENAGA.
On the weekly chart, the FBM KLCI formed a bullish white candlestick which confirmed the bullish Harami reversal signal on the previous week. Hence, the FBM KLCI is likely to continue with its bullish reversal to move higher this coming week. On the daily chart, the FBM KLCI formed a black spinning-top candlestick with a longer lower shadow which indicates initial selling pressure but buyers emerged later to lift the key index back to the positive zone. Hence, the FBM KLCI is likely to consolidate today. Immediate overhead resistance zone is at 1,825 to 1,831, while the downside support zone is at 1,811 to 1,804.
Weekly MACD climbed higher albeit still below the zero-line, and its histogram also extended higher, indicating an increased in the weekly momentum to the upside. Daily MACD was almost flat but is staying above the signal-line, indicating a state of consolidation with mild upward bias. Weekly RSI (14) was higher at 53.7 from 51.4, indicating a mild improvement in the index’s weekly relative strength to the bullish side. Daily RSI (14) was marginally higher at 63.7 from 63.6, indicating consolidation. Weekly Stochastic was higher at 79.4 from 76.1, indicating an improvement in the index’s weekly strength and continuation of the weekly up cycle. Daily Stochastic was also higher at 84.9 from 79.8, indicating an increased in the index’s daily strength and continuation of daily up cycle. In short, readings from the weekly indicators showed that the FBM KLCI is gaining strength on the weekly perspective, while readings from the daily indicators showed that the key index is in a consolidation mode but with an upward bias.
The technical picture of the FBM KLCI still remained little changed in that the short and medium term trend is up, while the long term trend is gradually shifting from down to up as the key index is now closing above the 100, 120 and 150-day simple moving average (SMA), but is still capped on top by the 200, 240, 300 and 360-day SMA. For the coming week, the FBM KLCI is likely to move sideways range-bound with an upward bias, and is likely to climb higher to challenge the immediate strong overhead long term moving average resistance zone posted by a cluster of the 200 to 360-day SMA. A breakthrough of the said resistance zone will likely see the FBM KLCI rallying higher toward the higher target levels of 1,845, follow by 1,850, 1,858, 1879 and ultimately re-testing the all-time high level of 1,896.
Last Friday, the Dow fell 81.72 points or -0.45% to close at 18,132.70. This week, the FBMKLCI is likely to trade within a range of 1,788 to 1,846, and today, the FBMKLCI is likely to trade within a range of 1,799 to 1,839.
This week's expected range: 1788 – 1846
Today’s expected range: 1799 – 1839
Resistance: 1827, 1833, 1839
Support: 1799, 1805, 1813
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