Stocks on Bursa Malaysia ended lower yesterday on profit taking in selected blue chips and heavyweights. The benchmark FBM KLCI in weakened in late afternoon in line with some of the Asian bourses. At close, the FBM KLCI fell 3.0 points or 0.16% to 1,859.58 after fluctuating between 1,859.18 and 1,867.53 throughout the day. Market breadth was negative, with losers led gainers by 639 to 250, while 277 counters were unchanged. Total volume increased to 2.12 billion shares worth RM2.05 billion from 2.10 billion shares worth RM2 billion on last Friday.
The FBM KLCI opened 2.11 points higher at 1,864.69 and climbed higher to hit the intra-day high of 1,867.53 forty minutes after opening. However, the rise could not sustain and the key index fell on persistent profit taking for the rest of the day to close near the day’s low. Chart-wise, the FBM KLCI formed a bearish black inverted hammer candlestick in dark-cloud-cover position which indicates profit taking after strong gain on Friday. Hence, the FBM KLCI is likely to further correct or consolidate today on follow through selling. Immediate downside support zone is at 1,850 to 1,846, while the overhead resistance zone is at 1,867 to 1,880.
MACD hooked downward slightly but is still above the signal-line, indicating consolidation. RSI (14) hooked downward to 61.9 from 64, indicating mild pullback correction. Stochastic hooked upward marginally to 69.04 from 68.98 and is still below the slow stochastic line, indicating consolidation. Readings from the indicators showed that the FBM KLCI is in a state of consolidation, and is likely to further consolidate.
The trend of the FBM KLCI still remained up as the key index continued to stay above the short, medium and long term moving averages. With the pullback yesterday, the FBM KLCI is likely to further consolidate today before making a fresh attempt to challenge the higher resistance level. On the broader market, heavy selling pressure was seen in small caps and ACE market counters which may lead into deeper correction.
Overnight, the Dow fell 42.17 points or -0.23% to close at 18,037.97. Today, the FBMKLCI is likely to trade within a range of 1,848 to 1,875.
This week's expected range: 1825 – 1886
Today’s expected range: 1848 – 1875
Resistance: 1865, 1870, 1875
Support: 1848, 1853, 1856
Stocks to watch: DAYANG, EATECH, GRANFLO, HHGROUP, KHEESAN, LBS, MATRIX, MUHIBAH, MUIPROP, SASBADI, TAFI
Stock pick highlight: MUHIBAH (5703)
Last Price: RM2.64 +0.13
Support Level: RM2.41, RM2.29
Resistance Level: RM2.76, RM2.80, RM2.86, RM2.90, RM2.96, RM3.00, RM3.1, RM3.27, RM3.41, RM3.50
Entry Level: RM2.64 – RM2.66
MUHIBAH (5703) rebounded from its intra-day low of 2.52 to close higher at 2.64 after hitting the intra-day high of 2.76. Technically, the chart of MUHIBAH formed a bullish white 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 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 80.7 from 74.2, indicating the stock is turning very bullish and is overbought. Stochastic rose to 75.5 from 75, and is above the slow stochastic line, indicated the stock is turning stronger after recent consolidation. The medium and long term trend of MUHIBAH is up, and the short term trend is up with the 5-day SMA staying above the 10-day SMA and both are above the 30-day SMA, and a confirmed breakout above RM2.76 will see an upside target of RM2.80, follow by RM2.86, RM2.90, RM2.96, RM3.00, RM3.1, RM3.27, RM3.41 and RM3.5.
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 (RM2.76). Those with lower risk appetite should wait at the side-line and buy on the dip.
Short Term – target price at (RM2.8, RM2.86, RM2.9, RM2.96, RM3.00), stop loss (RM2.40)
Mid Term – target price at (RM3.1, RM3.27, RM3.41, RM3.50), stop loss (RM2.28)
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