Stocks on Bursa Malaysia closed marginally higher yesterday on gains in selected heavyweights. Cautious sentiments, however, still prevailed in Asian markets as investors awaited news of a concrete resolution to Europe's debt crisis, particularly in Greece. The FBM KLCI gained 7.35 points or 0.54% to close at 1,371.55. It opened 3.20 points higher at 1,367.40. Gainers outnumbered losers by 407 to 304 while 275 counters were unchanged. Turnover fell to 850.054 million shares worth RM1.517 billion from 908.813 million shares worth RM1.595 billion on Tuesday.
The FBM KLCI opened 3.20 points higher at 1,367.40 but profit-taking activity sent it to the intra-day low of 1,353.38 within the first twenty minutes. The key index then rebounded and gradually recovered the lost ground to touch the intra-day high of 1,373.64 before settling at 1,371.55. Chart-wise, the FBM KLCI formed a white hanging-man candlestick which is a top reversal pattern. The long lower shadow showed selling pressure by the short term players as the market is still very unstable. It also shows a loss in the upward momentum, and hence, the key index is likely to take a pause to consolidate its gain.
MACD has hooked up slightly and the histogram also turned shorter upward, indicating a reduction in the downward momentum, but is still too early to see any positive momentum gain yet. RSI (14) was higher at 33.4, reflecting a gain in the relative strength, but the key index is still in the bearish zone. Stochastic was higher at 26.7, indicating a continuation in the up swing. Readings from the indicators showed that the FBM KLCI is taking a pause from its recent down move, but is still too early to say whether the key index has bottom out.
The main trend of the FBM KLCI remained down. However, for the first time in two weeks, the key index has closed above the very short term 5-day moving average (MA), indicating a possible continuation in the short term up swing, but the upward move is likely to face with heavy overhead resistances. Immediate overhead resistance zone is at 1,373 to 1,400, while the immediate downside support zone is at 1,353 to 1,339. Overnight, the Dow fell -179.79 points or -1.61% to close at 11,010.90. Today, the FBM KLCI is likely to trade within a range of 1,338 to 1,394.
This week's expected range: 1263 – 1461
Today’s expected range: 1338 – 1394
Resistance: 1379, 1387, 1394
Support: 1338, 1345, 1358