FBM KLCI - 20150518Stocks on Bursa Malaysia close higher yesterday, lifted by bargain-hunting activities amid technical rebound. The local market was in the midst of positive sentiments from last Friday’s 2015 first quarter Gross Domestic Product (GDP) announcement, coupled with the upcoming 11th Malaysia Plan to be unveiled by the government on Thursday. The benchmark FBM KLCI rose 11.58 points or 0.64% to 1,823.5, after hovering between 1,808.79 and 1,823.5 throughout the day. Gainers outpaced losers by 459 to 347 with 301 counters unchanged. Total volume rose to 2.2 billion shares worth RM1.78 billion from 1.74 billion units worth RM1.84 billion on Friday.

The FBM KLCI opened 1.6 points higher at 1,813.52 but slipped lower on profit taking activity. It hit the intra-day low of 1,808.79 at mid-morning and rebounded to move higher gradually for a the rest of the day and a last minute buying on selected blue-chip counters caused a surged in the FBM KLI to close at the highest level of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control for the day in pushing the key index higher, and hence, the FBM KLCI is likely to continue with its upward momentum to move higher. Immediate overhead resistance zone is at 1,825 to 1,831, while the downside support zone is at 1,808 to 1,802.

MACD continued to rise, albeit still below the signal-line and zero-line, and its histogram contracted upward significantly, indicating a substantial increase in momentum to the upside. RSI (14) rose to 49.7 from 43.4, indicating the relative strength of the FBM KLCI has turned neutral from a mildly bearish state. Stochastic rose to 26.5 from 17, indicating an improvement in the index strength and the beginning of a short term up cycle. Readings from the indicators showed that the FBM KLCI is turning stronger for the short term, and hence, is likely to continue its momentum to rise further.

The short term trend of the FBM KLCI has turned up as the key index has closed above the 5, 10 and 15-day simple moving average (SMA), but is still below the 20 and 30-day SMA. The FBM KLCI has also close above the medium term 50 and 60-day SMA and the 200-day SMA but is still below the 240, 300 and 360-day SMA, indicating sideways trend for the medium to long term. In order to breakout from the sideways trend the FBM KLCI will have to close above the highest of the moving average resistance at 1,835-point. On the broader market, sentiment has improved as can be seen by the increase in trading volume to above the two billion shares mark, and rotational play on small caps and ACE market counters is likely to keep the market alive.

Overnight, the Dow rose 26.32 points or 0.14% to close at 18,298.88. Today, the FBMKLCI is likely to trade within a range of 1,798 to 1,838.

This week's expected range: 1780 – 1833
Today’s expected range: 1798 – 1838

Resistance: 1828, 1833, 1838
Support: 1798, 1803, 1813