Stocks on Bursa Malaysia closed higher yesterday, lifted by gains in selected finance heavyweight counters, in line with other Southeast Asian stock markets, which mostly gained on Wednesday, as investors awaits the Federal Reserve’s (Fed) view on interest rate later of the day. The FBM KLCI rose 4.62 points or 0.27% to 1,726.86 after moving between 1,721.23 and 1,728.6 throughout the day. Gainers led losers 405 to 342, with 323 counters unchanged. Total volume declined to 1.48 billion units worth RM1.74 billion from Tuesday’s 1.53 billion units worth RM1.53 billion.
The FBM KLCI opened 0.47 of a point higher at 1,722.71 and moved in a narrow range. The key index hit an intra-day low of 1,721.23 at late morning before rebounding to move higher in the afternoon session to touch the intra-day high of 1,728.06 just before closing off high. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control for the day, and it also confirmed the reversal signal issued by the white spinning-top candlestick on the previous day. Hence, the FBM KLCI is likely to continue with its rebound to move higher today. Immediate overhead resistance zone is at 1,728 to 1,734, while the downside support zone is at 1,721 to 1,718.
MACD hooked upward and made a golden-cross over the signal-line, issuing a MACD buy signal, and indicated further reduction of the bearish downward momentum. RSI (14) was higher at 29.9 from 25.9, indicating a technical rebound. Stochastic hooked upward slightly to 10.6 from 8.8 and crossed over the slow stochastic line, issuing a buy signal and indicated an oversold rebound. Readings from the indicators showed that the FBM KLCI has staged an oversold technical rebound and is likely to rise further.
The trend of the FBM KLCI still remained down. However, the price action of the FBM KLCI over the last two days indicated that the key index have seen a temporary bottom at 1,718.44 and is staging a technical rebound. Nonetheless, for the FBM KLCI to reverse the current downtrend it will have to break above the overhead resistance line of the downtrend channel measuring from the pivot high of 1,867.53, which is currently at 1,735. However, to reverse the short term downtrend, the FBM KLI will have to at least close above the 30-day simple moving average which is currently at 1,767-point. On the broader market, buying interest was seen in the higher value shares as reflected in the unit value traded.
Overnight, the Dow rose 31.26 points or 0.17% to close at 17,935.74. Today, the FBMKLCI is likely to trade within a range of 1,715 to 1,735.
This week's expected range: 1708 – 1762
Today’s expected range: 1715 – 1735
Resistance: 1729, 1732, 1735
Support: 1715, 1718, 1722
Stocks to watch: ASIAPLY, BARAKAH, BPLANT, EATECH, ELSOFT, GESHEN, HARBOUR, INSTACO, JAKS, JHM, KPSCB, MAA, MHB, MYEG, PMHLDG, SCGM, SENDAI, SKPRES, SLP, SUNZEN, SUPER, TALIWRK, WPRTS, XDL
Stock pick highlight: JHM (0127)
Last Price: RM0.365 +0.055
Support Level: RM0.30, RM0.275
Resistance Level: RM0.375, RM0.40, RM0.44, RM0.465, RM0.48, RM0.50, RM0.52, RM0.55, RM0.57, RM0.59, RM0.63
Entry Level: RM0.36 – RM0.37
Technical Analysis
JHM (0127) rebounded from its intra-day low of 0.30 to close higher at 0.365 after hitting the intra-day high of 0.375. Technically, the chart of JHM formed a bullish white candlestick with increasing volume indicating strong buying interest came into the stock yesterday. It continued the reversal from the previous day forming a V-bottom pattern breakout. MACD hooked upward and is below the signal-line but above the zero-line, and its histogram also contracted upward, indicating an increased in momentum to the upside and a buy signal. RSI (14) rose to 59.6 from 51.6, indicating the stock is turning bullish. Stochastic swung upward to 21.7 from 6.9 and made a golden-cross over the slow stochastic line, issuing a stochastic buy signal and indicated that the stock is turning strong after recent consolidation. The medium and long term trend of JHM is up, and the short term trend is sideways with the 5-day SMA staying below the 10-day SMA but both are above the 30-day SMA, and a confirmed breakout above RM0.375 will see an upside target of RM0.40, follow by RM0.44, RM0.465, RM0.48, RM0.50, RM0.52, RM0.55, RM0.57, RM0.59 and RM0.63.
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 (RM0.375). Those with lower risk appetite should wait at the side-line and buy on the dip.
Price Objective
Short Term – target price at (RM0.40, RM0.44, RM0.465 RM0.48, RM0.50), stop loss (RM0.29)
Mid Term – target price at (RM0.52, RM0.55, RM0.57, RM0.59, RM0.63), stop loss (RM0.27)
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