Stocks on Bursa Malaysia ended higher yesterday, lifted by renewed buying support and gains in selected heavyweights, especially in the finance and trade and services sectors. This was in sync with most Asian bourses which were modestly higher after an encouraging US earnings report boosted sentiment. The FBM KLCI rose 12.06 points or 0.69% to close at 1,736.19, after fluctuating between 1,722.61 and 1,736.19 throughout the day. Gainers led losers by 556 to 261 with 287 counters unchanged. Total volume increased to 1.66 billion units valued at RM1.51 billion from 1.52 billion units valued at RM1.55 billion on Monday.
The FBM KLCI opened 1.3 points higher at 1,725.43 and moved higher but profit taking activity dragged the key index to the intra-day low of 1,722.61 about an hour after opening. Nonetheless, the FBM KLCI rebounded from the low and move higher gradually for the rest of the day, and, a last minute push of almost 6 points sent the key index to the highest point of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which reversed the downtrend on Monday, and hence the key index is likely to move higher today on follow through buying momentum. Immediate overhead resistance zone is at 1,738 to 1,744, while the immediate downside support zone is at 1,727 to 1,720.
MACD surged higher, and its histogram also extended higher, indicating an increased in momentum to the upside. RSI (14) swung upward to 54.5 from 48.7, indicating a change in the index’s relative strength from mildly bearish to mildly bullish. Stochastic was higher at 82 from 76.5, indicating further strengthening of the FBM KLCI and continuation of the short term up cycle. Readings from the indicators showed that the FBM KLCI is turning mildly bullish for the short term, and hence, is likely to climb higher on continuation of upward momentum.
The short term trend of the FBM KLCI is up as the key index continued to stay above the short term 5, 10, 20 and 30-day simple moving averages (SMA). However, from the short to medium term picture, the FBM KLCI is still currently trapped within the sideways range of 1,685 to 1,738, but showed bullish sign of moving higher and the likeliness to challenge the immediate overhead resistance of 1,738 today, and a breakthrough of this overhead resistance will see the FBM KLCI climbing higher to challenge the next higher resistance zone of 1,744 to 1,752. Nevertheless, the medium to longer term trend of the FBM KLCI is still down, and, in order for the FBM KLCI to reverse the current downtrend, it will have to at least close above the highest moving average resistance posted by the 360-day SMA at 1,818-point.
Overnight, the Dow fell 181.12 points or -1.00% to close at 17,919.29. Today, the FBMKLCI is likely to trade within a range of 1,713 to 1,749.
This week's expected range: 1692 – 1748
Today’s expected range: 1713 – 1749
Resistance: 1740, 1745, 1749
Support: 1713, 1718, 1727
Stocks to watch: AWC, BDB, BPPLAS, BRIGHT, BTM, CAELY, CENBOND, DNEX, EDUSPEC, EFFICEN, EG, EKSONS, ESCERAM, FITTERS, GHLSYS, GLBHD, GREENYB, HEVEA, HHGROUP, HOMERIZ, HOVID, ILB, JAYCORP, JCY, JIANKUN, KRONO, LEESK, MALTON, NOTION, OCNCASH, PMCORP, PENSONIC, PLABS, PWROOT, PWORTH, PRIVA, REACH, SASBADI, SEAL, STONE, SYSTECH, UNISEM
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