Stocks on Bursa Malaysia closed strongly yesterday, boosted by strong buying in selected index-linked counters. Index-linked and blue-chips dominated the top gainers list with traders positioning themselves ahead of the month-end or first quarter window dressing activities. The FBM KLCI closed 18.19 points or 1.01% higher at 1,814.04, after moving between 1,798.24 and 1,814.54 throughout the day. Losers edged gainers by 415 to 400 with 329 counters unchanged. Total volume, however, declined to 1.94 billion shares worth RM1.83 billion from the 2.13 billion worth RM1.77 billion on Monday.
The FBM KLCI opened 2.97 points higher at 1,798.82 and slipped lower to hit the intra-day low of 1,798.24 briefly after opening. The key index rebounded from the low and rallied higher for the rest of the day. The FBM KLCI consolidated in the afternoon session but late buying pushed the key index to hit the intra-day high of 1,814.54 before pulling back slightly to close off high. Chart-wise, the FBM KLCI formed a bullish long white candlestick which indicates the bulls were in full control for the day in pushing the key index higher, and it marked a strong reversal after a two-day profit-taking correction. Hence, the FBM KLCI is likely to rise further on follow through buying momentum. Immediate overhead resistance zone is at 1,815 to 1,826, while the immediate downside support zone is at 1,798 to 1,795.
MACD hooked upward and made a golden-cross over the signal-line, issuing a buy signal, and indicated an increased in momentum to the upside. RSI (14) swung upward to 57.6 from 49.4, indicating the short term relative strength of the FBM KLCI has turned mildly bullish from a mildly bearish state. Stochastic hooked upward to 60.9 from 55.2, and is staying above the slow stochastic line, indicating the two-day correction was over and a resumption of the short term up cycle. Readings from the indicators showed that the FBM KLCI is turning bullish after a two-day correction, and is likely to rise further.
With the bullish upswing yesterday, the FBM KLCI has regained its short term uptrend as the key index has again closed above the short term moving averages. The medium term trend is up while the long term trend still remained sideways range-bound with an upward bias. The FBM KLCI is likely to continue its upward momentum to test the strong overhead resistance zone of 1,823 to 1,830 formed by a cluster of long term moving averages where the 200-day SMA is currently at 1,823 and the 240-day SMA is at 1,830. On the broader market, profit-taking and weakness is seen in small caps and ACE market counters which have risen recently. Nonetheless, rotational play on a new set of counters has taken over.
Overnight, the Dow fell 104.90 points or -0.58% to close at 18,011.14. Today, the FBMKLCI is likely to trade within a range of 1,787 to 1,830.
This week's expected range: 1738 – 1857
Today’s expected range: 1787 – 1830
Resistance: 1819, 1825, 1830
Support: 1787, 1792, 1803
Stocks to watch: APPASIA, CCMDBIO, COMCORP, EVERGRN, IHH, IRCB, IOIPG, KPJ, LANDMRK, MPAY, NICE, PLABS, PCHEM, PMETAL, SGB, SHH, SIGN, SUPERLN, TADMAX, TAKASO, TEKALA, VIS, XOX
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