Stocks on Bursa Malaysia and most of its regional peers remained steady at yesterday’s close, underpinned by a strong rebound on Wall Street overnight as the US stock market welcomes the dovish statement from the Federal Reserve that it is not ready to raise interest rates anytime soon. The FBM KLCI ended 11.56 points or 0.64% higher at 1,809.13 after moving on a broad range between 1,798.03 and 1,815.71 throughout the day. Gainers thumped losers by 476 to 336 with 327 counters unchanged. Total volume increased to 2.21 billion shares worth RM1.84 billion from 2.13 billion shares worth RM1.87 on Wednesday.
Taking cue from the strong rebound on Wall Street overnight, the FBM KLCI opened 0.65 of a point higher at 1,798.22 and rallied higher to hit the intra-day high of 1,815.71 fifty minutes after opening. The key index pulled back on profit-taking to move sideways range-bound for the rest of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which continued the uptrend from the previous day’s rise. However, the intra-day movement showed that the market turned cautious or consolidated after the initial strong upward move. Hence, the FBM KLCI is likely to consolidate today for a breather after rising consecutively for three trading days. Immediate overhead resistance zone is at 1,815 to 1,826, while the immediate downside support zone is at 1,800 to 1,790.
MACD continued to rise but is still below the zero-line, and its histogram contracted upward for the fourth consecutive bar, indicating a further increased in the upward or rebound momentum. RSI (14) rose to 56.5 from 51.1, indicating the FBM KLCI is gradually gaining strength and has turned mildly bullish. Stochastic rose sharply to 46.2 from 27.7, indicating an improvement in the index’s strength and continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI is gradually gaining its upward strength, and hence, is likely to climb higher on follow through buying.
The short term trend of the FBM KLCI has turned up as the key index has close above the short term 5, 10, 15 and 20-day simple moving averages (SMA). On top of that, the 5-day SMA has also made a golden-cross over the 10-day SMA, indicating the short term trend is up and a buy signal. The medium term trend has also turned up, while the long term trend is still sideways range-bound. As the week is coming to the end, more profit-taking activity ahead of the weekend is expected to cap the upside of the key index.
Overnight, the Dow fell 117.16 points or -0.65% to close at 17,959.03. Today, the FBMKLCI is likely to trade within a range of 1,781 to 1,833.
This week's expected range: 1747 – 1823
Today’s expected range: 1781 – 1833
Resistance: 1817, 1825, 1833
Support: 1781, 1789, 1799
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