Stocks on Bursa Malaysia ended lower yesterday on persistent profit taking in heavyweights amid bullish performance on the regional market. The benchmark FBM KLCI ended lower on profit taking after posting strong gain the previous day. At close, the FBM KLCI fell 6.20 points or 0.33%, after moving between 1,848 and 1,853.21 throughout the day. Gainers, however, outpaced losers by 427 to 372, while 360 counters were unchanged. Total volume was lower at 1.82 billion units worth RM1.88 billion from Tuesday’s 1.95 billion units worth RM2.10 billion.
Taking cue from the soft close on Wall Street overnight, the FBM KLCI opened 4.02 points lower at 1,852.49 and rebounded to touch the intra-day high of 1,853.21 briefly after opening. However, the rebound found no follow through, and the key index fell on profit taking pressure and moved sideways range-bound for a major part of the day. The FBM KLCI hit an intra-day low of 1,848.00 before rebounding to close off low. Chart-wise, the FBM KLCI formed a black spinning-top candlestick in bearish Harami position, a top reversal candlestick pattern which indicates a changed in sentiment from bullish to uncertainty with a bearish bias. Hence, the FBM KLCI may stay in consolidation today with a downward bias. Immediate overhead resistance zone is at 1,853 to 1,856, while the immediate downside support zone is at 1,848 to 1,843.
MACD was higher but its histogram contracted downward, indicating a state of consolidation. RSI (14) fell to 66.9 from 71.3, indicating a pullback correction after hitting the overbought level, and the short term relative strength is still in the bullish zone. Stochastic hooked downward to 95.5 from 97.6, and made a dead-cross over the slow stochastic line, issuing a stochastic sell signal after hitting the overbought zone. Readings from the indicators showed that the FBM KLCI is undergoing a healthy pullback correction after the recent rise which sent the key index into the overbought zone.
The trend of the FBM KLCI remained up as the key index continued to stay above the short, medium and long term moving averages. The correction yesterday was healthy and the FBM KLCI is likely to continue its uptrend to test the immediate overhead resistance zone of 1,856 to 1,880 after the correction is over. On the broader market, trading has turned cautious as the total volume fell below the two billion shares mark. Nevertheless, rotational play on small caps and ACE market counters is still active providing short term trading opportunity.
Overnight, the Dow rose 27.09 points or 0.15% to close at 17,902.51. Today, the FBMKLCI is likely to trade within a range of 1,842 to 1,858.
This week's expected range: 1798 – 1858
Today’s expected range: 1842 – 1858
Resistance: 1853, 1855, 1858
Support: 1842, 1845, 1847
Stocks to watch: ABRIC, AZRB, ASDION, CIHLDG, CENTURY, CNOUHUA, DELEUM, EKSONS, ENCORP, EFORCE, FSBM, FUTUTEC, HARVEST, HEXZA, HOHUP, HOVID, IREKA, KPS, MMODE, MAYBULK, OCK, OKA, PANPAGE, PERDANA, SAUDEE, SLP, TOMYPAK, VIS, WONG, ZELAN
Stock pick highlight: CENTURY (7117)
Last Price: RM0.77 +0.045
Support Level: RM0.73, RM0.68
Resistance Level: RM0.775, RM0.785, RM0.80, RM0.825, RM0.84, RM0.855, RM0.875, RM0.895, RM0.92
Entry Level: RM0.77 – RM0.775
CENTURY (7117) rebounded from its intra-day low of 0.73 to close higher at the intra-day high of 0.77. Technically, the chart of CENTURY formed a bullish white Marubozu candlestick with increasing volume, indicating strong buying interest came into the stock yesterday. It breaks out from the consolidation range forming a Rectangle pattern breakout. MACD swung upward and its histogram also extended upward, indicating an increased in momentum to the upside and a buy signal. RSI (14) rose to 71.8 from 57.1, indicating the stock is turning very bullish. Stochastic rose to 87.5 from 75.7 and is above the slow stochastic line, indicating the stock is turning strong after recent consolidation. The long term trend of CENTURY is sideways while the medium term trend is up, and the short term trend is up with the 5-day SMA above the 10-day SMA and is also above the 30-day SMA, and a confirmed breakout above RM0.775 will see an upside target of RM0.785, follow by RM0.80, RM0.825, RM0.84, RM0.855, RM0.875, RM0.895 and RM0.92.
Since the short term trend is bullish, day traders with shorter time frame perspective may ride on the short term bullishness and buy on breakout level (RM0.775). Those with lower risk appetite should wait at the side-line and buy on the dip.
Short Term – target price at (RM0.785, RM0.80, RM0.825, RM0.84), stop loss (RM0.725)
Mid Term – target price at (RM0.855, RM0.875, RM0.895, RM0.92), stop loss (RM0.675)
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