Stocks on Bursa Malaysia closed higher yesterday on bargain hunting of discounted stocks ahead of the year-end, and the local bourse was further supported by selective window-dressing activities. The FBM KLCI rose 2.58 points or 0.17% to close at 1,506.69, after opening 4.06 points lower at 1,500.05. Market breadth was positive with gainers leading losers by 492 to 254 while 335 counters were unchanged. Volume increased to 1.59 billion shares, worth RM1.16 billion, from 1.27 billion shares, valued at RM904.21 million, registered on Wednesday.
Taking cue from the weak performance of Wall Street overnight, the FBM KLCI opened 4.06 points lower at 1,500.05 and slid to the intra-day low of 1,497.19, losing 6.92 points at its worst. The key index then rebounded and rose to the intra-day high of 1,511.19 before last minute profit-taking activity sent it to close off high. Chart wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control. However, the upper shadow showed that invertors choose to take profit instead of taking further risk when the key index approached the resistance level of 1,510. Nonetheless, the FBM KLCI has now stayed above the long term 240-day SMA which is at 1,505.58, which will now act as a support. If the FBM KLCI is able to stay firm above the current level, we might see a pre-Chinese New Year rally towards the 1,530-point level.
MACD continued to rise, indicating a continuation of the upward momentum. RSI (14) was higher at 64.8, indicating a further improvement of the relative strength into the bullish zone. Stochastic has hooked downward to 97.1 from 99.7 a day ago, indicating some profit-taking activity has occurred as the key index has moved deep into the short term overbought zone. Readings from the indicators showed that the FBM KLCI has turned bullish but may experience profit-taking correction as the key index was a little overbought after running up for 10 sessions from the recent low of 1,448.
The trend of the FBM KLCI has turned up and bullish as the key index has now closed above all the short, medium and long term moving averages. However, the key index might take a breather at current level before running up to higher levels. With the overall volume starting to pick up, the market is likely to remain active with rotational play in the second and third liners. As the year 2011 is coming to a close today, we would like to take this opportunity to wish all our readers a happy and prosperous new year 2012, and may you be blessed with good health and abundance of wealth.
Overnight, the Dow rose +135.63 points or +1.12% to close at 12,287.04, and today, the FBM KLCI is likely to trade within a range of 1,484 to 1,525
This week's expected range: 1441 – 1530
Today’s expected range: 1484 – 1525
Resistance: 1513, 1519, 1525
Support: 1484, 1491, 1498