KLCI_20111011

Stocks on Bursa Malaysia staged a rebound yesterday to end firmer, after beginning the week in the red, and against a mixed global equity market. World stocks, which were on a rally yesterday, slipped into mixed trading with players cautious ahead of the European Union's bailout vote. The FBM KLCI rose 14.61 points or 1.05% to end at 1,411.65, after opening 9.95 points better at 1,406.99. Gainers thumped losers by 593 to 171 while 248 counters were unchanged. Turnover rose to 1.060 billion shares worth RM1.376 billion compared with 548 million shares worth RM632 million on Monday. 


Taking cue from the strong performance on Wall Street overnight, the FBM KLCI opened with an up gap of 9.95 points at 1,406.99 and surged to the morning session high of 1,412.18, it pulled back to moved sideways for the rest of the morning. The key index climbed to the intra-day high of 1,414.74 in the afternoon session but profit-taking activity pressed it to close off high. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control for the day. The key index closed just above the horizontal resistance level at 1,410, which is also the 23.6% Fibonacci retracement level measuring from the low of 801 to 1,597. It may continue the up move to test the next higher target level of 1,420. However, the 30-day moving average (MA) at 1,415 may continue to exert selling pressure.


MACD continued to move higher, indicating a continued increased in the short term upward momentum. RSI (14) was higher at 50.1, back to the neutral zone. If RSI is able to go above the 50 level, further upside in the FBM KLCI can be expected. Stochastic was higher at 84.5, indicating an improvement in the market strength, but it has also moved into the short term overbought zone, hence, some pullback is expected. Readings from the indicators showed that the FBM KLCI is gradually turning bullish for the short term; nonetheless more data is needed to confirm this.


The medium and long term trend of the FBM KLCI remained down. Nonetheless, the short term trend has turned up, as the key index is now closing above the 5, 10 and 20-day MAs, and it has also breakout from the downtrend channel. Immediate strong overhead resistance zone is at 1,415 to 1,423. If the FBM KLCI is able to breakthrough this zone, then there is a high likelihood that it may rally towards the next target at 1,450. Immediate downside support zone is at 1,406 to 1,400. Overnight, the Dow fell -16.88 points or -0.15% to close at 11,416.30. Today, the FBM KLCI is likely to trade within a range of 1,399 to 1,423.


This week's expected range: 1336 – 1452

Today’s expected range: 1399 – 1423


Resistance: 1415, 1419, 1423

Support: 1399, 1403, 1407