KLCI_20111027

Stocks on Bursa Malaysia finished on a firmer note yesterday on gains in selected blue chips on the back of positive market sentiments globally. Asian markets rose after players took new positions following the decision by European policymakers to contain the Euro-zone debt crisis and the private sector investors agreed to take a 50 per cent "haircut" in Greek bonds. The FBM KLCI rose 13.13 points or 0.9% to end at 1,470.93, after opening 3.75 points higher at 1,461.55. Gainers led losers by 689 to 165 while 195 counters were unchanged. Turnover advanced to 1.877 billion worth RM2.413 billion from 950.64 million worth RM1.075 billion Tuesday. 


The FBM KLCI opened with an up gap of 3.75 points at 1,461.55 and continued to move higher throughout the day with intermittent mild pullback. It touched the intra-day high of 1,474.47 before pulling back on profit-taking to close at 1,470.93. Chart-wise, the FBM KLCI formed a bullish white candlestick which indicates buyers were in control of the day, and the key index is likely to continue moving higher today. The FBM KLCI has for the first time in one and a half month closed above the 360-day moving average (MA) since it broke below this long term support on 12th September. The key index is likely to stage a rally to move higher towards the next target of 1,500-point.


MACD continued to climb higher and its histogram also turned green for the first time after staying in the red for six consecutive days, indicating a continuation of the upward momentum and flashing a buy signal. RSI (14) is higher at 61.9, indicating the short term relative strength of the key index has turned bullish. Stochastic has moved higher to 91.1 after crossing over its slow stochastic line, indicating a pick up in the market strength and continuation of the up cycle. Readings from the indicators showed that the FBM KLCI has turned bullish after recent consolidation, and the upward momentum is likely to carry the index higher. 


The short and medium term trend of the FBM KLCI is currently up, while the long term has just turned positive with the key index closing above the 360-day MA yesterday. The FBM KLCI is likely to continue with its upward move to challenge the 1,500-point target soon. Immediate overhead resistance zone is at 1,480 to 1,491 with 1,488, the 61.8% Fibonacci retracement level, being a key resistance level. Immediate downside support zone is at 1,459 to 1,448. With overall volume surging to 1.8 billion shares, the market is likely to show more bullishness in trading.


Overnight, the Dow rose +339.51 points or +2.86% to close at 12,208.55. Today, the FBM KLCI is likely to trade within a range of 1,448 to 1,489.


This week's expected range: 1389 – 1503

Today’s expected range: 1448 – 1489


Resistance: 1477, 1483, 1489

Support: 1448, 1454, 1462