Stocks on Bursa Malaysia snapped a three-day losing streak to end higher yesterday, spurred by persistent buying momentum in heavyweights, a rebound in the ringgit and moving in tandem with the uptrend in regional bourses following South Korea’s surprise move to cut interest rates. The benchmark FBM KLCI rose 8.71 points or 0.49% to close at 1,786.87, after fluctuating between 1,780.65 and 1,789.92 throughout the day. Gainers outpaced losers by 537 to 313 with 310 counters unchanged. Total volume rose to 2.9 billion shares worth RM2.2 billion compared to 2.5 billion shares worth RM2.2 billion on Wednesday.
The FBM KLCI rebounded to open 2.59 points higher at 1,780.75 and slipped lower to hit the intra-day low of 1,780.65 briefly after opening. The key index rebounded from the low to climb higher for the rest of the day on strong buying interest in blue-chips, and it hit an intra-day high of 1,789.92 just before closing but last minute profit-taking activity dragged the index to close off high. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates technical rebound after the key index was beaten down for three consecutive sessions. Hence, the FBM KLCI is likely to continue its rebound to move higher today. Immediate overhead resistance zone is at 1,789 to 1,800, while the immediate downside support zone is at 1,780 to 1,774.
MACD continued to slide lower, but its histogram contracted upward slightly, indicating a reduction in the bearish momentum. RSI (14) hooked upward to 43.9 from 38.8, indicating a technical rebound which lifted the FBM KLCI to the mildly bearish zone from the bearish zone. Stochastic was marginally lower at 17.3 from 18.4, indicating a reduction in the bearish momentum as the key index entered the oversold zone. Readings from the indicators showed that the FBM KLCI was experiencing a technical rebound.
The short term trend of the FBM KLCI still remained down as the key index continued to stay below the short term moving averages, and is still below the 5-day simple moving average (SMA). Hence, the upward move yesterday is just a technical rebound in a downtrend. In order to reverse the short term downtrend, the FBM KLCI will have to move above the cluster of short term moving averages with the highest resistance level at 1,807 posted by the 15-day SMA. The FBM KLCI found some support at the 50-day SMA and rebounded from it, and the medium and long term trend is still sideways range-bound. On the broader market, rotational play of the small caps and ACE market counters still remained active, giving some life to the market.
Overnight, the Dow rebounded 259.83 points or 1.47% to close at 17,895.22. Today, the FBMKLCI is likely to trade within a range of 1,772 to 1,799.
This week's expected range: 1769 – 1852
Today’s expected range: 1772 – 1799
Resistance: 1790, 1795, 1799
Support: 1772, 1776, 1781
Stocks to watch: A&M, BRIGHT, CME, CUSCAPI, DPS, DUFU, ECOWLD, EFFICEN, EKA, ETITECH, FRONTKN, GPA, HEVEA, HHHCORP, IRCB, JCY, LANDMRK, LCTH, MULPHAL, OCNCASH, PENTA, REDTONE, SASBADI, SOLUTN
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