Stocks on Bursa Malaysia closed mixed on Tuesday with the benchmark index recouping its earlier losses as key index link counters staged a late rebound in line with the mixed trading on regional bourses. However, players are cautious ahead of Wednesday’s meeting by European policymakers to resolve the Euro-zone debt crisis. The FBM KLCI rose 7.78 points, or 0.54%, to close at 1,457.80, after opening 3.44 points better at 1,453.46. Decliners led gainers by 373 to 299 while 289 counters were unchanged. Turnover declined to 950.64 million worth RM1.075 billion from Monday’s 1.238 billion shares worth RM1.3 billion. Bursa Malaysia was closed yesterday for Deepavali celebration.
The FBM KLCI opened with an up gap of 3.44 points at 1,453.46 and surged to the morning session high of 1,455.65 within the first fifteen minutes. Profit-taking activities then pushed it to the intra-day low of 1,448.12 before late hour bargain hunting activity on selected blue-chips which pushed the key index to close at the highest point of the day. Chart-wise the FBM KLCI formed a hammer candlestick which indicates sellers were initially strong in pressing down the key index but later buyers surfaced to push it up. The FBM KLCI is likely to continue to climb higher today with immediate overhead resistance zone at 1,462 to 1,470. The resistance at 1,469 posted by the 360-day moving average (MA) is particularly important, as a close above this level would indicate the return of the long term bulls.
MACD continued to climb higher, but its histogram was slightly shorter, indicating a slow down in the upward momentum. RSI (14) was higher at 58.8, indicating the key index is gradually turning more bullish even though it is still in the mildly bullish zone. Stochastic has made a hooked up and crossed above its slow stochastic line, indicating a resumption in the up cycle after a brief consolidation. Readings from the indicators showed that the FBM KLCI is breaking out of it short term consolidation, and may continue to move higher.
With the up move on Tuesday, the FBM KLCI has resumed its short term uptrend as it is now above all the short term moving averages, and is likely to continue to move higher. The medium term trend has also turned up as the key index has closed above the 50 and 60-day MAs decisively. The long term trend remained down at the moment, however, the FBM KLCI is likely to challenge the 360-day MA soon, and if it is able to break above the resistance post by the 360-day MA at 1,469, the move may trigger a rally towards the 1,500-point level.
Overnight, the Dow rose +162.42 points or +1.39% to close at 11,869.04 after reports that China will buy European bonds. Today, the FBM KLCI is likely to trade within a range of 1,441 to 1,468.
This week's expected range: 1389 – 1503Today’s expected range: 1441 – 1468
Resistance: 1461, 1465, 1468Support: 1441, 1444, 1451
Stocks to watch: HIBISCS, HIBISCS-WA