Stocks on Bursa Malaysia ended higher yesterday on continued buying in selective heavyweights, as bargain hunters emerged after losses on previous day. The benchmark FBM KLCI rose 4.12 points or 0.23% to close at 1,821.25, after moving between 1,817.94 and 1,825.79 throughout the day. Losers outpaced gainers by 461 to 420 with 282 counters unchanged. Total volume rose to 2.8 billion shares worth RM2.4 billion from 2.3 billion shares worth RM2.2 billion on Monday.
Taking cue from the record close of the Dow overnight, the FBM KLCI opened 3.3 points higher at 1,820.43 but slipped lower on mild profit-taking to hit the intra-day low of 1,817.94 forty five minutes after opening. The key index rebounded from the low and rallied higher to touch the intra-day high of 1,825.79 at late morning. However, the rise was met with heavy profit-taking which dragged the FBM KLCI lower and moved sideways near to the mid-range of the day. Chart-wise, the FBM KLCI formed a small white spinning-top candlestick in bullish Harami position which indicates uncertainty of market direction amid consolidation with a mild bullish bias. Hence, the FBM KLCI is likely to stay in consolidation with a mild upward bias. Immediate overhead resistance zone is at 1,825 to 1,831, while the immediate downside support zone is at 1,817 to 1,812.
MACD was almost flat and is staying below the signal-line, and the histogram extended slightly southward, indicating a state of consolidation and loss of momentum. RSI (14) hooked upward to 62.7 from 60.9, indicating a mild rebound. Stochastic, however, hooked downward to 87.2 from 89.6, indicating consolidation. Readings from the indicators showed that the FBM KLCI is in a state of consolidation and is likely to further consolidate.
The short and medium term trend of the FBM KLCI is up as the key index continued to stay above the short and medium term moving averages. However, the price action of the FBM KLCI over the last few sessions showed that the key index is turning sideways range-bound for the immediate near term. The long term trend is turning sideways as shown by the long term moving averages that turned flat. Therefore, the FBM KLCI is likely to stay in sideways range-bound within a range of 1,800 to 1,832 with immediate strong overhead resistance zone at 1,825 to 1,832 posted by a cluster of the long term moving averages. Nonetheless, the broader market will continue to see rotational play of the small caps and ACE market counters which will keep the market alive.
Overnight, the Dow fell 85.26 points or -0.47% to close at 18,203.37. Today, the FBMKLCI is likely to trade within a range of 1,809 to 1,833.
This week's expected range: 1788 – 1846
Today’s expected range: 1809 – 1833
Resistance: 1825, 1829, 1833
Support: 1809, 1813, 1817
Stocks to watch: AT, BJAUTO, CAB, COCOLND, DPS, EDUSPEC, ESCERAM, IDMENSN, JIANKUN, PLABS, PUC, REDTONE, SANICHI, SUNWAY, TSH, VSOLAR
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