Stocks on Bursa Malaysia closed steadier yesterday despite the softer performance of other Asian markets following the weaker Japan trade data and China's inflation data. The market moved within a narrow trading range due to a dearth of fresh market leads, as investors are awaiting the outcome of the Spanish debt sales as well as the interest rates announcement by the European Central Bank and the Bank of England. The FBM KLCI ended 3.27 points or 0.21% firmer at 1,525.56. Losers led gainers by 418 to 351 while 339 counters were unchanged. Turnover dipped to 1.515 billion shares worth RM1.579 billion from 1.910 billion shares valued at RM1.941 billion on Wednesday.
The FBM KLCI opened 1.10 point lower at 1,521.19 and slipped marginally lower to 1,520.78. It then rebounded and moved upward gradually in a narrow trading range to close at the highest point of the day. Chart wise, the FBM KLCI formed a bullish small white candlestick which indicates the bulls were in control for the day. As it was mentioned in yesterday’s report, the FBM KLCI was in range-bound consolidation mode, an upside breakout of the overhead resistance at 1,525 is likely to see the key index moving higher. The immediate strong overhead resistance is now at 1,530-point level.
MACD continued to climb higher, but its histogram also continued to turn shorter, indicating a weak upward momentum and some inherent weakness is in the building. RSI (14) was higher at 64.8, indicating a continued improvement of the short term relative strength. Stochastic was marginally higher at 87.1 and showed sign of tapering off, indicating a continuation of the up cycle amid a slight increase in the market strength. Readings from the indicators showed that the upward momentum of the FBM KLCI is improving, but at a very slow pace.
The trend of the FBM KLCI remained up, and the key index is likely to continue its uptrend journey to test the immediate resistance zone of 1,530 to 1,539. If it can break through this zone successfully with conviction, then it is likely to retest the 1,550-point psychological level. Immediate downside support zone is at 1,520 to 1,515. Overnight, the Dow rose +21.57 points or +0.17% to close at 12,471.02. Today, the FBM KLCI is likely to trade within a range of 1,517 to 1,531.
This week's expected range: 1479 – 1549
Today’s expected range: 1517 – 1531
Resistance: 1527, 1529, 1531
Support: 1517, 1519, 1522
Stocks to watch: POS, CBIP, HSL, SEALINK, XOX