Stocks on Bursa Malaysia ended mixed yesterday with the benchmark FBM KLCI higher on buying activities following overnight gains on Wall Street but the broader market showed signs of weakness. Asian bourses received some boost after the US stock market registered a more than 1% gain as investors cheered a pause in the greenback’s rally and eyed renewed weakness in oil prices. The FBM KLCI rose 7.33 points or 0.41% to settle at 1,787.87, after fluctuating between 1,779.40 and 1,789.40 throughout the day. Losers led gainers by 490 to 348 with 314 counters unchanged. Total volume rose to 2.49 billion shares worth RM1.84 billion from 2.46 billion shares worth RM1.9 billion on Monday.
The FBM KLCI opened 0.58 of a point lower at 1,779.96, the intra-day low, and rebounded to climb higher for the rest of the day with intermittent mild pullback on profit-taking. The key index hit an intra-day high of 1,789.40 just before closing off high on late profit-taking activity. Chart-wise, the FBM KLCI formed a bullish white candlestick which confirmed the reversal signal issued by the white inverted hammer candlestick on Monday. 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 slipped lower marginally but its histogram contracted upward, indicating a reduction in the bearish momentum or a state of consolidation. RSI (14) hooked upward to 45.7 from 41.2, indicating a technical rebound which lifted the key index higher in the mildly bearish zone. Stochastic was marginally higher at 17.2 from 16.2 but is still below the slow stochastic line, indicating a weak technical rebound after hitting the stochastic oversold zone. Readings from the indicators showed that the FBM KLCI is still in a state of consolidation with a slight reduction in the bearish momentum, and hence, is likely to further consolidate with mild upward bias.
The short term trend of the FBM KLCI still remained down. However, the FBM KLCI has closed above the 5-day simple moving average (SMA) with the bullish upward move yesterday, indicating a pause in the very short term downtrend. Nonetheless, the key index is still staying below the 10, 15 and 20-day SMA. The medium and long term trend has turned sideways with a bearish bias. For the near term, the FBM KLCI is likely to stay sideways range-bound within a range of 1,774 to 1,800, and a breakout from either side of the range will see the key index continue moving in the direction of the breakout.
Overnight, the Dow fell 128.34 points or -0.71% to close at 17,849.08. Today, the FBMKLCI is likely to trade within a range of 1,772 to 1,798.
This week's expected range: 1747 – 1823
Today’s expected range: 1772 – 1798
Resistance: 1791, 1795, 1798
Support: 1772, 1776, 1782
Stocks to watch: ASB, APFT, CAREPLS, DESTINI, DOMINAN, GDEX, HAPSENG, HIL, INIX, IQGROUP, KOMARK, MEGB, PRLEXUS, REDTONE, UNISEM, VSOLAR
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