Stocks on Bursa Malaysia closed firmer yesterday on active buying activities as investors took stock of the better performance of Wall Street last Friday. The FBM KLCI rose 10.12 points or 0.69% to 1,478.87, with gains mostly seen in selected heavyweights like IOICORP, TENAGA, DiGi and GENM. The benchmark index, which opened 10.96 points higher at 1,479.71, moved between 1,478.13 and 1,484.88 throughout the day. Gainers thumped losers by 647 to 193 while 246 counters were unchanged. Total market volume rose to 2.849 billion shares worth RM1.885 billion from last Friday’s 2.068 billion units valued at RM1.23 billion.
The FBM KLCI opened with an up gap of 10.96 points at 1,479.71 and surged to the intra-day high of 1,484.88 within the first fifteen minutes, but heavy profit-taking activity sent the key index down to the intra-day low of 1,478.13. The key index was moving sideways between these two points throughout the day. Chart-wise, the FBM KLCI formed a bearish black inverted hammer candlestick which indicates sellers were dominant for the day, and the key index is likely to further consolidate itself today. The FBM KLCI is currently sideways range-bound within a triangle pattern, and a breakout on either side of the triangle would see the key index continue moving in that direction.
MACD continued to slide lower and is just slightly above the signal-line, indicating a continued loss in the upward momentum, and is in a short term consolidation mode. RSI (14) hooked up to 57.6, reflecting the rebound and the relative strength of the key index is still in the mildly bullish zone. Stochastic was lower at 79.4, indicating a loss in the momentum and market strength, a crossing below the 80 level indicates a probable beginning of a down cycle. Readings from the indicators showed that the FBM KLCI has gone into a short term consolidation mode. The consolidation may extend until a clear breakout sign is observed.
The immediate short term trend of the FBM KLCI has turned sideways, and so is the medium term trend. The long term trend is also turning sideways with a bearish bias. Immediate downside support zone is at 1,470 to 1,466 while the overhead resistance zone is at 1,485 to 1,490. With the FBM KLCI going into consolidation, the overall market is likely to remain active dominated by trading in penny stocks as can be seen from the high volume but low value trend over the last few days. Investors are advise to trade cautiously, and don’t be greedy.
Overnight, the Dow fell -74.70 points or -0.61% to close at 12,078.98. Today, the FBM KLCI is likely to trade within a range of 1,469 to 1,492.
This week's expected range: 1435 – 1516
Today’s expected range: 1469 – 1492
Resistance: 1484, 1488, 1492
Support: 1469, 1473, 1476