Stocks on Bursa Malaysia closed mixed last Friday with the benchmark FBM KLCI ended marginally lower, reversing earlier gains on mild profit taking prior to the weekend. At close, the FBM KLCI settled at 1,845.86, down 2.08 points or 0.11% after fluctuating between 1,852.95 and 1,845.09. On a weekly basis, the FBM KLCI gained 1.55 points from previous Friday’s 1,844.31. Market breadth was positive with gainers overwhelmed losers by 493 to 334, while 357 counters were unchanged. Total volume stood at 2.58 billion shares worth RM2.28 billion, down from Thursday’s 2.70 billion shares worth RM2.52 billion. Weekly turnover grew to 12.11 billion units worth RM11.27 billion from 9.42 billion units worth RM9.26 billion on previous week.
Continuing the correction from previous Friday, the FBM KLCI opened last Monday 1.42 points lower at 1,842.89 and rebounded to hit the intra-day high of 1,847.50 but continued profit-taking dragged the key index to close 2.23 points lower at 1,842.08. Tuesday saw the FBM KLCI reversing earlier gains on lack of buying momentum in the afternoon session to close 2.47 points lower at 1,839.61. The FBM KLCI rebounded to close marginally higher on Wednesday with a gain of 0.52 point to 1,840.13 after hitting an intra-week low of 1,836.37. Continuing the rebound on Wednesday, the FBM KLCI rose 7.81 points on Thursday to 1,847.94 on late buying by foreign funds. And the key index continued its upward move on Friday morning to hit the intra-week high of 1,852.95 before profit-taking activity dragged it to close lower ahead of the weekend.
On the weekly chart, the FBM KLCI formed a white spinning-top candlestick which indicates uncertainty of market direction with mild upward bias, and the range for last week which was trapped within the previous week’s range also indicated that the key index was in range-bound consolidation. Hence, the FBM KLCI is likely to move sideways range-bound in the coming week within a range of 1,836 to 1,856. On the daily chart, the FBM KLCI formed a bearish black inverted hammer candlestick in dark-cloud-cover position which indicates profit-taking activity and both are top reversal signals, and hence, the FBM KLCI is likely to continue to correct downward today on follow through selling. Immediate downside support zone is at 1,845 to 1,836, while the overhead resistance zone is at 1,852 to 1,856.
Weekly MACD and its histogram were higher, but the mild gain in the histogram showed a slowdown in the weekly upward momentum. Daily MACD, however, slipped lower and made a dead-cross over the signal-line, issuing a sell signal on the daily chart, and indicating an extended correction is expected ahead. Weekly RSI (14) was marginally higher at 57.8 from 57.5, indicating a slowdown in the weekly upward momentum. Daily RSI (14) hooked downward to 61.8 from 63.5, indicating a pullback correction and the daily relative strength of the key index is still in the bullish zone. Weekly Stochastic was higher at 94 from 92, indicating very strong index strength but is overbought. Daily Stochastic was higher at 69.7 from 67.3 and has just made a golden-cross over the slow stochastic line, issuing a stochastic buy signal. Readings from the weekly indicators showed that there is a slowdown in the upward momentum, and hence, the FBM KLCI may pause for a breather after five consecutive weeks of gains. And readings from the daily indicators showed that the FBM KLCI is losing its momentum, and hence, is likely to consolidate.
The trend of the FBM KLCI is up as the key index continued to stay above the short, medium and long term moving averages. However, the price action of the FBM KLCI over the last two weeks showed that the key index was losing its upward momentum and is likely to go into a range-bound consolidation. Thus, for the coming week, the FBM KLCI is likely to stay sideways range-bound within an immediate range of 1,836 to 1,856, and a break of the range will see the FBM KLCI moving in the direction of the breakout. On the broader market, trading sentiment is likely to remain mildly bullish with rotational play on small caps and ACE market continues to stay in focus.
Last Friday, the Dow fell 279.47 points or -1.54% to close at 17,826.30. This week, the FBMKLCI is likely to trade within a range of 1,820 to 1,869, and today, the FBMKLCI is likely to trade within a range of 1,835 to 1,860.
This week's expected range: 1820 – 1869
Today’s expected range: 1835 – 1860
Resistance: 1850, 1855, 1860
Support: 1835, 1840, 1842
Stocks to watch: A&M, AZRB, ANCOM, ASDION, ASTINO, CANONE, COMPLET, CUSCAPI, DATAPRP, EATECH, EDEN, EKOWOOD, FUTUTEC, GPA, GMUTUAL, HUMEIND, KPJ, L&G, LCTH, LIENHOE, MEGB, NIHSIN, OCNCASH, PANSAR, PASDEC, PENTA, PESONA, POHKONG, PSIPTEK, SAUDEE, SEAL, SOLUTN, TRC, WCT
Stock pick highlight: COMPLET (5136)
Last Price: RM0.96 +0.045
Support Level: RM0.915, RM0.895
Resistance Level: RM0.97, RM1.00, RM1.04, RM1.08, RM1.13, RM1.20, RM1.25, RM1.36, RM1.50
Entry Level: RM0.96 – RM0.97
COMPLET (5136) rebounded from its intra-day low of 0.915 to close higher at 0.96 after hitting the intra-day high of 0.97. Technically, the chart of COMPLET formed a bullish white candlestick with increasing volume, indicating strong buying interest came into the stock on Friday. It breaks out from the consolidation range forming a Rectangle pattern breakout. MACD surged upward and is above the signal-line, and its histogram also extended upward strongly, indicating an increased in momentum to the upside and a buy signal. RSI (14) rose to 71.2 from 62.6, indicating the stock is turning very bullish. Stochastic swung upward to 79.3 from 66.7 and made a golden-cross over the slow stochastic line, issuing a stochastic buy signal and indicated that the stock is turning stronger after recent consolidation. The medium and long term trend of COMPLET is up, and the short term trend is up with the 5-day SMA closing above the 10-day SMA and both are above the 30-day SMA, and a confirmed breakout above RM0.97 will see an upside target of RM1.00, follow by RM1.04, RM1.08, RM1.13, RM1.20, RM1.25, RM1.36 and RM1.50.
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 (RM0.97). Those with lower risk appetite should wait at the side-line and buy on the dip.
Short Term – target price at (RM1.00, RM1.04, RM1.08, RM1.13), stop loss (RM0.91)
Mid Term – target price at (RM1.20, RM1.25, RM1.36, RM1.50), stop loss (RM0.89)
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