Stocks on Bursa Malaysia closed mixed yesterday with last minute bargain hunting in selected finance counters lifted share prices to end slightly higher. However, the broader market was still cautious. The benchmark FBM KLCI ended 4.29 points or 0.24% better at 1,825.54, after fluctuating between 1,819.18 and 1,826.05 throughout the day. Losers outpaced gainers by 473 to 345 with 308 counters unchanged. Total volume fell to 2.1 billion shares, worth RM2.2 billion, from 2.8 billion shares, worth RM2.4 billion, transacted on Tuesday.
The FBM KLCI opened 4.41 points higher at 1,825.66 and surged to hit the intra-day high of 1,826.05 briefly after opening. Profit-taking activity which emerged dragged the key index lower to move sideways range-bound for the rest of the day. However, a last minute buying on selected blue-chips managed to push the FBM KLCI to close near the opening of the day. Chart-wise, the FBM KLCI formed a dragon-fly Doji candlestick, a top reversal candlestick pattern which indicates resistance at 1,825 points level and the appearance of selling pressure at current level. Hence, the FBM KLCI is likely to pause for a consolidation after the recent gains. Immediate overhead resistance zone is at 1,825 to 1,831, while the downside support zone is at 1,819 to 1,811.
MACD was marginally higher, but is still below the signal-line, and its histogram contracted upward marginally, indicating a state of consolidation with mild upward bias. RSI (14) was higher at 64.6 from 62.7, indicating a slight increase in the relative strength in the bullish zone. Stochastic hooked upward to 90.1 from 87.2, indicating continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI is in a consolidation mode with an upward bias.
The technical picture of the FBM KLCI is very much the same in that the short and medium term trend is up, and the long term trend is sideways with an upward bias. With yesterday’s upward move, the FBM KLCI has closed right above 360-day simple moving average (SMA), making a first break of the long term moving average resistance zone at 1,825 to 1,832. A break of this critical overhead resistance zone will see the FBM KLCI regaining its long term bullish posture. Currently, the 200-day SMA resistance is at 1,828, and the 300-day SMA at 1,830 follow by the 240-day SMA at 1,832.
Overnight, the Dow fell 106.47 points or -0.58% to close at 18,096.90. Today, the FBMKLCI is likely to trade within a range of 1,814 to 1,832.
This week's expected range: 1788 – 1846
Today’s expected range: 1814 – 1832
Resistance: 1828, 1830, 1832
Support: 1814, 1816, 1821
Stocks to watch: APFT, COMPLET, HOHUP, JIANKUN, MIECO, MITRA, MUHIBAH, NICORP, NTPM, PMETAL SCGM, TDM, XOX
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