Stocks on Bursa Malaysia ended the first quarter yesterday on a firm note with the benchmark FBM KLCI advancing 3.95% year-to-date on window dressing as bargain hunters triumphed over profit takers. The FBM KLCI rose 8.95 points or 0.49% to close at 1,830.78 points, after hovering between 1,825.3 points and 1,832.85 points throughout the day. Gainers edged losers 417 to 410 while 350 counters were unchanged. Total volume rose to 2.15 billion units worth RM2.45 billion from Monday’s 1.92 billion units worth RM1.7 billion.
Taking cue from the strong performance on Wall Street overnight, the FBM KLCI opened with an upside gap of 7.05 points at 1,828.88 and rallied higher to touch the intra-day high of 1,832.85 in the first forty five minutes. However, heavy profit-taking which emerged dragged the key index lower to hit the intra-day low of 1,825.30 at mid-afternoon. Nonetheless, late hour bargain hunting managed to lift the FBM KLCI from the low. Chart-wise, the FBM KLCI formed a white spinning-top candlestick which indicates uncertainty of market direction but with an upward bias. Hence, the FBM KLCI is likely to consolidate its gains first before continuing its uptrend to move higher. Immediate overhead resistance zone is at 1,832 to 1,845, while the downside support zone is at 1,825 to 1,813.
MACD climbed higher and its histogram also extended upward, indicating an increased in momentum to the upside. RSI (14) was higher at 62.3 from 59.8, indicating the FBM KLCI has turned bullish for the short term. Stochastic swung upward to 90 from 87.6, indicating the key index is gaining strength and continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI is turning bullish on increase upward momentum, and hence, is likely to move higher.
The short and medium term trend of the FBM KLCI still remained up. With the bullish upward move yesterday, the long term trend of the FBM KLCI is turning from sideways range-bound to up as the key index breaks through the cluster of long term moving average resistance and also the upper boundary of the downtrend channel. However, a more convincing upward move on follow through buying is required to confirm the breakout and trend change as the key index still closed below the pivot high resistance of 1,831.41 registered on February 4th, after breaking through it briefly. A confirmed breakout of the 1,831-point overhead resistance will see the FBM KLCI rallying higher to test the next resistance zone of 1,845 to 1,858 in the short to medium term, and to re-test the all-time high of 1,896.23 in the longer term.
Overnight, the Dow fell 200.19 points or -1.11% to close at 17,776.12. Today, the FBMKLCI is likely to trade within a range of 1,818 to 1,840.
This week's expected range: 1771 – 1850
Today’s expected range: 1818 – 1840
Resistance: 1834, 1837, 1840
Support: 1818, 1822, 1826
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