Stocks on Bursa Malaysia ended higher yesterday, extending gains from the day before, ahead of today's 2012 Budget announcement. Overall market sentiment remained positive, and almost all sectors regained strength after the recent losses with consumer and finance stocks leading the market recovery. The FBM KLCI ended 18.02 points steadier at 1,393.69 after opening 5.5 points higher at 1,381.17. Market breadth was positive with gainers led losers by 535 to 186 while 257 counters were unchanged. Turnover rose to 994.17 million shares, valued at RM1.39 billion, from Wednesday's 697.59 million shares worth RM1.09 billion.
The FBM KLCI opened with an up gap of 5.5 points at 1,381.17 and climb to the intra-day high of 1,395.28 within the first hour of trading. The key index pulled back on mild profit-taking activity and was hovering between 1,387.07 and 1,395.28 for the rest of the day. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control for the day, and the market continues the reversal of the previous day. It is likely that the upward momentum will be carried through today to move the key index higher. Immediate strong overhead resistance levels are at 1,400, 1,410 and 1,420.
MACD continued to climb higher after making a golden-cross yesterday, indicating an increase in the upward momentum. RSI (14) was higher at 44.4, indicating the key index’s relative strength was turning from bearish to mildly bearish. Stochastic has turned upward to 49.6, indicating a resumption of the short term up cycle. Readings from the indicators showed that the FBM KLCI is gradually turning positive, and the momentum is also picking up, which is likely to carry the key index higher.
The main trend of the FBM KLCI remained down. However, with the key index closing above the 10-day moving average (MA) decisively yesterday, the short term trend has turned up. Nonetheless, as the FBM KLCI is still staying below the 20 and 30-day MAs which are currently at 1,402 and 1,422, the current up swing may just be part of a technical rebound in a bear market. If only the FBM KLCI is able to move above the 30-day MA at 1,422, the short term trend would be considered reversed. Immediate overhead resistance zone is at 1,400 to 1,420, while the downside support zone is at 1,381 to 1,365.
Overnight, the Dow rose +183.38 points or +1.68% to close at 11,123.33. Today, the FBM KLCI is likely to trade within a range of 1,370 to 1,410.
This week's expected range: 1274 – 1460
Today’s expected range: 1370 – 1410
Resistance: 1399, 1405, 1410
Support: 1370, 1375, 1384