Stocks on Bursa Malaysia ended on a firm note yesterday, with record volume for this year, boosted by active retail participation. The positive sentiment was driven by continuous fund inflow and stronger global manufacturing data. The FBM KLCI rose 14.41 points, or 0.94%, to close at 1,553.18 after opening 3.5 points higher at 1,542.27. Market breadth was positive with gainers led losers by 593 to 322 while 293 counters were unchanged. Turnover surged to 4.39 billion shares valued at RM3.3 billion from 2.84 billion shares valued at RM2.32 billion last Friday, and yesterday’s volume almost surpassed the all-time high of 4.78 billion registered on Feb 22, 2007. 

The FBM KLCI opened with an up gap of 3.5 points at the day’s low of 1,542.27 and surged to the intra-day high of 1,554.06 within the first fifteen minutes of trading. The key index pulled back on profit-taking activity and hovered between 1,554.06 and 1,548.00 throughout the day before ending the day at 1,553.18. Chart wise, the FBM KLCI formed a bullish white candlestick which indicates the bulls were in control for the day, and with the bullish up move yesterday the benchmark index is likely to continue its uptrend to test the next resistance level at 1,558 and 1,567.

MACD continued to climb higher and made a golden-cross yesterday, flashing a buy signal. This indicated the FBM KLCI’s momentum has again turned positive. RSI (14) climbed higher to 69.96, indicating the short term relative strength of the key index is turning very bullish. Stochastic was also higher at 93.4, indicating a continued improvement of the market strength and the up cycle. Readings from the indicators showed that the FBM KLCI is turning very bullish and the upward momentum is likely to carry the index to a higher level.

The trend of the FBM KLCI remained up and bullish. Immediate overhead resistance zone is anticipated at 1,558 to 1,567 while the downside support zone is at 1,542 to 1,530. Judging from the extremely high volume yesterday, the broad market is likely to continue to be dominated by active rotational trading in penny stocks and second liners, and the index-link heavyweights are likely to climb higher. Lock in some profit as the prices climb is always a good strategy especially on penny stocks that had made good gains.

Overnight, the Dow rose +5.75 points or +0.04% to close at 12,883.95. Today, the FBM KLCI is likely to trade within a range of 1,533 to 1,566

This week's expected range: 1498 – 1562

Today’s expected range: 1533 – 1566

Resistance: 1558, 1562, 1566

Support: 1533, 1538, 1545

Stocks to watch: NAIM, KIMLUN, MUDAJYA