Stocks on Bursa Malaysia closed higher yesterday buoyed by positive global sentiment which prompted investors to seek bargains among beaten-down stocks. The local bourse’s positive momentum was in tandem with major Asian markets amid hopes that Euro-zone leaders would unveil fresh measures to resolve the debt crisis. Sentiment was further lifted by a robust US Thanksgiving weekend retail sales, as well as, a firmer overnight close on Wall Street. The benchmark FBM KLCI ended 13.17 points or 0.92% higher at 1,444.72 supported by institutional buying of finance stocks, it opened 6.22 points higher at 1,437.77. Gainers beat losers by 471 to 273 while 272 counters were unchanged. Turnover reduced to 1.304 billion shares valued at RM1.563 from last Friday’s 1.577 billion shares worth RM1.098 billion.
Taking cue from the strong overnight performance on Wall Street, the FBM KLCI opened 6.22 points higher at 1,437.77 and moved higher throughout the whole morning session. It touched the intra-day high of 1,458.00 after the opening bell in the afternoon session, but heavy profit-taking activity sent the key index to close off high at 1,444.72. Chart-wise, the FBM KLCI formed a white inverted hammer candlestick which indicates the bulls were initially strong in pushing the key index higher but later the bears surfaced to press it down. As the key index managed to hit the intra-day high of 1,458, but pulled back to close at 1,444.72, it showed the resistance zone at 1,448 to 1,463 is strong. If it is able to break through this immediate resistance zone, then it is likely to resume its short term uptrend. Nonetheless, the FBM KLCI is currently still in consolidation mode but with an upward bias.
MACD continued to slide lower into the bearish zone, but its histogram turned shorter upward, indicating a reduction in the index’s downward momentum. RSI (14) has hooked up to 47.2, indicating the relative strength of the key index is currently mildly bearish. Stochastic has turned upward to 25.9, indicating a resumption of the short term up cycle and improvement of the market strength. Mixed signals from the indicators showed that the FBM KLCI is likely to continue with its current consolidation process but with an upward bias.
The short term trend of the FBM KLCI has turned sideways as the key index is now congested in a trading range. The medium term trend has also turned sideways while the long term trend remained bearish. Immediate overhead resistance zone is at 1,448 to 1,463 while the immediate downside support zone is at 1,430 to 1,423. A break in either zone will likely see the FBM KLCI continue moving in that direction. Overnight, the Dow rose +32.62 points or +0.28% to close at 11,555.63, and today, the FBM KLCI is likely to trade within a range of 1,414 to 1,479.
This week's expected range: 1392 – 1480
Today’s expected range: 1414 – 1479
Resistance: 1456, 1468, 1479
Support: 1414, 1425, 1435