Stocks on Bursa Malaysia ended higher yesterday in line with regional bourses amid fresh buying on key heavyweights, but investors mostly remained cautious because of the lingering Euro-zone debt crisis. The FBM KLCI rose 27.38 points or 1.89% to close at 1,472.10 after opening 0.23 point lower at 1,444.49. Gainers led losers by 417 to 352 while 283 counters were unchanged. Turnover rose to 1.534 billion shares valued at RM2.024 billion from Tuesday’s 1.304 billion shares worth RM2.563.
The FBM KLCI opened 0.23 points lower at 1,444.49 and slipped to the intra-day low of 1,443.59 within the first five minutes after market opened, but buying support continued to push the key index higher throughout the day to end at the highest point of the day. Chart-wise, the FBM KLCI formed a bullish long white candlestick which showed that the bulls were fully in control for the day, and the strong upward momentum is likely to carry the key index higher today. After breaking through the resistance at 1,463, the FBM KLCI is likely to continue moving higher to test the next higher resistance zone at 1,477 to 1,493. .
MACD has turned upward, despite still slightly below the zero-line, and so is the histogram, indicating a change in the momentum from down to up. RSI (14) was higher at 55.9 from previous reading of 47.2, indicating a strong pick up in the relative strength and the FBM KLCI is turning mildly bullish from mildly bearish a day ago. Stochastic continued to climb higher to 38.6 from 25.9, indicating an improvement in the market strength and continuation of the up cycle. Readings from the indicators showed that the FBM KLCI is gradually turning bullish, and the improved momentum may carry it to higher level.
With the strong up move yesterday, the short term trend of the FBM KLCI has again turned up. The medium term trend is still sideways while the long term trend remained down. Immediate strong overhead resistance zone is at 1,480 to 1,493. If the FBM KLCI is able to breakthrough this resistance zone convincingly, then there is a strong likelihood that it may re-challenge the 1,500-point psychological resistance level. Overnight, the Dow rose +490.05 points or +4.24% to close at 12,045.68, and today, the FBM KLCI is likely to trade within a range of 1,424 to 1,501
This week's expected range: 1392 – 1480
Today’s expected range: 1424 – 1501
Resistance: 1482, 1492, 1501
Support: 1424, 1434, 1453