Stocks on Bursa Malaysia rebounded to close higher yesterday after opening lower, driven by domestic buying for selected heavyweights, especially in the finance and telecommunication sectors. The benchmark FBM KLCI finished at 1,701.54, up 5.71 points, or 0.34%, after moving between 1,685.03 and 1,704.88 throughout the day. Gainers beat losers by 557 to 271, while 287 counters were unchanged. Total volume fell to 1.82 billion units valued at RM1.83 billion from 1.99 billion units valued at RM2.25 billion on Wednesday.
Taking cue from the hefty fall on Wall Street overnight, the FBM KLCI opened 8.57 points lower at 1,687.26 and slipped lower to hit the intra-day low of 1,685.03 thirty five minutes later, losing 10.8 points at its worst. The key index rebounded from the low and climbed higher for the rest of the day to touch the intra-day high of 1,704.88 twenty five minutes before closing, but late selling dragged the index to close off high above the 1,700-point psychological support level. Chart-wise, the FBM KLCI formed a bullish white piercing-line candlestick pattern, a bottom reversal candlestick formation, which indicates the fight back of the bulls after being beaten down heavily for three consecutive sessions. Hence, the FBM KLCI is likely to stage further rebound today on follow through buying momentum. Immediate overhead resistance zone is at 1,706 to 1,718, while the downside support zone is at 1,695 to 1,685.
MACD was down marginally and so is the histogram, indicating a slight increase in the bearish momentum. RSI (14) hooked upward to 38.3 from 35.3, indicating a mild technical rebound and the relative strength of the FBM KLCI is still bearish. Stochastic was lower at 31 from 39.7, indicating weak index strength and continuation of the short term down cycle. Readings from the indicators showed that the FBM KLCI is staging a mild technical or oversold rebound and is likely to further rebound.
The trend of the FBM KLCI is still down. However, the rebound yesterday indicated that the FBM KLCI is finding some buying support at levels below 1,690-points as the index also rebounded the last round after hitting the low of 1,688.44. Hence, the key index is likely to move higher today on follow through rebound. Nevertheless, in order to reverse the short term downtrend, the FBM KLCI must at least move above the recent pivot high of 1,738-point for a short term uptrend to form, otherwise, this may turn out to be just a short-lived technical rebound. And to reverse the longer term downtrend, the FBM KLCI will have to move above 1,867-point, which is still very far away.
Overnight, the Dow rose 33.20 points or 0.19% to close at 17,548.62. Today, the FBMKLCI is likely to trade within a range of 1,669 to 1,724.
This week's expected range: 1652 – 1788
Today’s expected range: 1669 – 1724
Resistance: 1709, 1717, 1724
Support: 1669, 1677, 1689
Stocks to watch: A&M, BIOHLDG, CAREPLS, CENBOND, COMCORP, CONNECT, DESTINI, DUFU, EDGENTA, ENGTEX, EVERGRN, FBMKLCI-C1, FBMKLCI-CS, FBMKLCI-CT, GKENT, HARBOUR, INARI, KNM, MIECO, MIKROMB, OLDTOWN, PENTA, SGB, SKPRES, 3A, VS, WCT
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