KLCI_20111031

Stocks on Bursa Malaysia ended higher yesterday with the appetite for risk remaining intact from last week amid the positive global sentiment. Buying interest from retails and local funds provided the impetus for the uptrend, with focus in heavyweights and low-liners such as rubber glove stocks. The FBM KLCI rose 10.07 points or 0.7% to 1,491.89 after opening 2.84 points higher at 1,484.66. Advancers led decliners by 426 to 318 while 282 counters were unchanged. Turnover was moderate with a volume of 1.33 billion shares valued at RM1.58 billion compared with 1.88 billion shares worth RM2.29 billion last Friday. 


The FBM KLCI opened 2.84 points higher at 1,484.66 but experienced profit-taking activity which pressed the key index lower throughout the morning session to the intra-day low of 1,475.71. The afternoon session saw strong buying interest in selected blue-chip stocks which pushed the barometer to the intra-day high of 1,493.28 before easing to close at 1,491.89. Chart-wise, the FBM KLCI formed a bullish white candlestick with long lower shadow which indicates the bears were initially in control but later the bulls fought back and took control, and hence, the key index is likely to continue its uptrend today. The FBM KLCI is likely to face strong resistance at the 1,500-point psychological level.


MACD continued to climb higher, indicating a continuation in the upward momentum. RSI (14) was higher at 66.5, indicating an increased in the short term bullishness. Stochastic was also higher at 96.7, indicating a strong market strength and the up cycle is in continuation. Readings from the indicators showed that the FBM KLCI is currently in a bullish state. However, the key index may face some strong profit-taking when RSI readings approach the 70 level. 


The short and medium term trend of the FBM KLCI remained up, while the key index has just broken above the 360-day long term moving average (MA), giving out a first signal that the long term trend is gradually turning bullish. However, the key index is still below the other long term 120, 200, 240 and the 300-day MAs, which together formed the resistance zone at 1,500 to 1,513-points level. If only the key index can break through this zone, it is considered fully bullish for the long term. 


Overnight, the Dow fell -276.10 points or -2.26% to close at 11,955.01. Today, the FBM KLCI is likely to trade within a range of 1,463 to 1,511.


This week's expected range: 1432 – 1529

Today’s expected range: 1463 – 1511


Resistance: 1499, 1505, 1511

Support: 1463, 1469, 1480


Stocks to watch: ZELAN, SALCON, MBSB