Stocks on Bursa Malaysia ended mixed last Friday on renewed concerns about Greece’s debt talks. Although Greece's leaders clinched a deal on economic reforms in return for a loan bailout, the country faces fresh hurdles as EU partners ask for more cutbacks. The FBM KLCI fell 3.66 points or 0.23% to close at 1,561.66 after opening 2.6 points weaker at 1,562.72. Week-on-week, the benchmark index rose 22.89 points from previous Friday’s close of 1,538.77. Market breath was positive with gainers leading losers by 566 to 371, while 315 counters were unchanged. Volume increased to 3.35 billion shares worth RM2.81 billion from 3.31 billion shares worth RM2.97 billion on Thursday. Total weekly volume increased to 11.06 billion shares, worth RM9.08 billion, from previous week’s 9.52 billion shares, worth RM9.2 billion.
Share prices on Bursa Malaysia continued their uptrend after the two-day holidays on Monday and Tuesday last week. The FBM KLCI rose 14.41 points to close at 1,553.18 on Wednesday after opening 3.5 points higher at 1,542.27. On Thursday, the market extended its uptrend from Wednesday, despite the cautious trading on regional Asian markets, due to the uncertainty in the Greece debt talks and the key index rose another 12.14 points to 1,565.32. Profit-taking activity set in on Friday which saw the FBM KLCI easing 3.66 points to end the holiday-shortened week at 1,561.66.
On the weekly chart, the FBM KLCI formed a bullish white candlestick which gap away from previous Friday’s candlestick. It indicated a bullish up move of the benchmark index which continued to move higher to close near the high of the week. On the daily chart, the FBM KLCI formed a small black spinning-top candlestick which indicated a pulled back profit-taking correction on last Friday, and the key index may take a short breather before continuing its uptrend. With this bullish up move the FBM KLCI is likely to continue its uptrend to climb higher this week to test the next target level of 1,577 follows by the all time high level of 1,597.
Both weekly and daily MACD continued to climb higher and so is the histograms, indicating a strong upward momentum of the key index. Weekly RSI (14) was higher at 62.6 compared with previous week’s 59.1, indicating the key index’s weekly relative strength has turned bullish. Daily RSI (14) has hooked down to 70.8 from Thursday’s 73.5, reflecting the pulled back correction, but the daily relative strength is still in the very bullish zone. Weekly Stochastic was higher at 95.6 while the daily stochastic was marginally lower at 97.1, indicating very strong underlying market strength from both the weekly and daily perspective. Readings from both the weekly and daily indicators showed that the FBM KLCI is currently in a very bullish state. However, as the oscillators have entered the short term overbought zone, some pullback correction is inevitable.
The FBM KLCI is now on a bullish uptrend, as it is staying above the short, medium and long term moving averages. After a steep rise from 1,520-point level to the current level of 1,561 in just five trading sessions, the key index is likely to take a breather at the current level before continuing its uptrend. Immediate overhead resistance zone is at 1,565 to 1,577 while the downside support zone is at 1,553 to 1,545. With the overall volume remained high and above the 3 billion shares mark, the broad market is likely to continue with the rotational play on the second and third liners with penny stocks taking the centre stage while the index-linked heavyweights may take a short breather.
Last Friday, the Dow fell -89.23 points or -0.69% to close at 12,801.23. This week, the FBM KLCI is likely to trade within a range of 1,524 to 1,589, and for today, it is likely to trade within a range of 1,553 to 1,570.
This week's expected range: 1524 – 1589
Today’s expected range: 1553 – 1570
Resistance: 1565, 1568, 1570
Support: 1553, 1556, 1559
Stocks to watch: ALAM, ANNJOO, KINSTEL, PERWAJA, LIONIND