Stocks on Bursa Malaysia ended almost flat yesterday with the benchmark FBM KLCI 0.51 point or 0.03% higher at the close, lifted by gains in selected blue chips. The benchmark FBM KLCI stood at 1,755.56 after hovering between 1,750.72 and 1,759.43 throughout the day. Losers outpaced gainers by 420 to 324, while 333 counters were unchanged. Total volume declined to 1.61 billion units worth RM1.9 billion from 1.78 billion units worth RM2.19 billion on Wednesday.
Taking cue from the strong rebound on Wall Street overnight, the FBM KLCI opened 2.86 points higher at 1,757.91 and surged to hit the intra-day high of 1,759.43 ten minutes after opening. However, the upward move found no follow through and the key index pulled back to move sideways range-bound in and out the positive and negative territory for the rest of the day. It hit an intra-day low of 1,750.72 at mid-afternoon before rebounding to close marginally higher. Chart-wise, the FBM KLCI formed a black hammer candlestick for a second day. The twin hammer candlesticks pattern indicates bottoming of the FBM KLCI at current level, albeit it maybe a temporary one until a confirmation of trend reversal is seen. Immediate downside support zone is at 1,749 to 1,746, while the overhead resistance zone is at 1,759 to 1,764.
MACD slipped lower, but its histogram was just marginally lower, indicating a reduction in the downward momentum. RSI (14) was marginally higher at 26.7 from 26.4, indicating a state of consolidation. Stochastic hooked upward gently to 9.3 from 8.4, indicating mild a rebound. Readings from the indicators showed that the FBM KLCI is in a state of consolidation in the short term oversold zone, and hence is likely to stage a technical rebound.
The trend of the FBM KLCI still remained down and bearish as the key index continued to stay below the short, medium and long term moving averages. Nonetheless, the price action of the FBM KLCI over the last two days showed that selling pressure is waning of and the key index is consolidating just above the 1,750-point psychological support level or the 61.8% Fibonacci Retracement support level of 1,746. As the month is coming to a close today, some window dressing activities by fund managers might prop up the FBM KLCI. On the broader market, trading activity in second and third liners has also reduced greatly indicating the market is likely to go into a prolong consolidation.
Overnight, the Dow fell 36.87 points or -0.20% to close at 18,126.12. Today, the FBMKLCI is likely to trade within a range of 1,742 to 1,768.
This week's expected range: 1727 – 1866
Today’s expected range: 1742 – 1768
Resistance: 1759, 1763, 1768
Support: 1742, 1746, 1751
Stocks to watch: ASDION, CENTURY, CAP, HTPADU, JAKS, KIMHIN, LEONFB, MICROLN, MULPHAL, PRLEXUS, SKPRES, TECNIC, XINQUAN
Stock pick highlight: ASDION (0068)
Last Price: RM0.855 +0.05
Support Level: RM0.81, RM0.73
Resistance Level: RM0.86, RM0.89, RM0.93, RM0.96, RM0.98, RM1.00, RM1.05, RM1.10, RM1.15, RM1.20, RM1.27
Entry Level: RM0.85 – RM0.86
ASDION (0068) rebounded from its intra-day low of 0.81 to close higher at 0.855 after hitting the intra-day high of 0.86. Technically, the chart of ASDION formed a bullish white candlestick with mildly increasing volume indicating mild buying interest came into the stock yesterday. It breaks out from the consolidation range forming a Saucer pattern breakout. MACD swung upward and is about to make a Golden-cross over the signal-line and its histogram also contracted upward strongly, indicating an increased in momentum to the upside and a buy signal. RSI (14) rose to 60.8 from 53.3, indicating the stock is turning bullish from a mildly bullish state. Stochastic rose to 74.3 from 52.2 and is above the slow stochastic line, indicating the stock is turning strong and continuation of the up cycle. The medium and long term trend of ASDION is up, and the short term trend is turning up with the 5-day SMA crossing above the 10-day SMA but both are still below the 30-day SMA, and a confirmed breakout above RM0.86 will see an upside target of RM0.89, follow by RM0.93, RM0.96, RM0.98, RM1.00, RM1.05, RM1.10, RM1.15, RM1.20 and RM1.27.
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 (RM0.86). Those with lower risk appetite should wait at the side-line and buy on the dip.
Short Term – target price at (RM0.89, RM0.93, RM0.96, RM0.98, RM1.00), stop loss (RM0.805)
Mid Term – target price at (RM1.05, RM1.10, RM1.15, RM1.20, RM1.27), stop loss (RM0.72)
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