Stocks on Bursa Malaysia ended higher yesterday boosted by gains in selected heavyweights and improved risk appetite following the Prime Minister’s seventh update of the Economic Transformation Programme. The positive movement of share prices was also prompted by a positive set of export data recorded for July. However, investors were still cautious about the global outlook and awaited positive news to serve as catalyst. The benchmark FBM KLCI, which went through a see-saw movement in early trade, bounced back at midday and finished 5.22 points or 0.36% better at 1,469.83. Gainers thumped losers by 415 to 265 while 284 counters were unchanged. A total of 812.87 million shares worth RM1.143 billion changed hands compared with 650.39 million shares worth RM1.253 billion yesterday.

The FBM KLCI opened 1.45 points higher at 1,466.06, but profit-taking activity pressed the key index to hit the intra-day low of 1,463.12 and the index rebounded to gradually move higher, mild buying interest appeared in the afternoon and sent the key index to the intra-day high of 1,471.22 before easing slightly on closing. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates continuation of the previous day’s bottom reversal move, and the upward momentum is likely to carry the key index to move higher to test the immediate overhead resistance at 1,474-point level, which coincided with the 20-day moving average (MA). A successful breakthrough of the 1,474-point resistance level will likely see the FBM KLCI moving higher to test the next target at 1,490. 

MACD continued to move higher after making a golden-cross the day before, indicating a gradual pick up in the upward momentum. However, as MACD is still below the zero line, the present up move could well be just a technical rebound in a bear trend. RSI (14) was higher at 42.15, indicating an improvement of the relative strength from bearish to mildly bearish. Stochastic is at 30.9, and has cross above the slow stochastic line, indicating a possible beginning of a short term up cycle; however, more data is needed to confirm this. Readings from the indicators showed that the FBM KLCI has possibly bottom out for the time being, and may stage an up move soon. 

The main trend of the FBM KLCI remained down and bearish, but the short term trend has shown sign of reversal as the 5-day MA has just made a cross above the 10-day MA, giving out a first signal of a possible short term up trend is in the brewing. However, as there are still many moving average resistances in the overhead area, the short term trend reversal is expected to face with many challenges. Immediate overhead resistance zone lies at 1,471 to 1,490 while the downside support zone is at 1,463 to 1,453. 

Overnight, the Dow fell -119.05 points or -1.04% to close at 11,295.81. Today, the FBM KLCI is likely to trade within a range of 1,456 to 1,480. 

This week's expected range: 1414 – 1521 Today’s expected range: 1456 – 1480 

Resistance: 1473, 1477, 1480Support: 1456, 1460, 1464