Stocks on Bursa Malaysia closed higher yesterday with the benchmark FBM KLCI holding firmly above the 1,490 points level. The positive close on Wall Street overnight coupled with the steadier sentiment on key regional markets spurred buying interest in the local market. The FBM KLCI finished 7.95 points or 0.53% better at 1496.49 after opening 4.67 points higher at 1493.21. Gainers thumped losers by 463 to 291 while 287 counters were unchanged. Turnover was slightly lower at 1.000 billion shares valued at RM1.424 billion compared with Wednesday’s 1.065 billion shares valued at RM1.812 billion.
The FBM KLCI opened with an up gap of 4.67 points at 1493.21, and dropped to the intra-day low of 1491.80, but recovered swiftly and moved upward gradually to hit the intra-day high of 1498.05. The key index was basically moving sideways in the afternoon session, but a last minute buying of selected heavyweights helped pushed the key index to close higher at 1496.49. Chart-wise, the FBM KLCI formed a small white candlestick which indicates a continuation of the reversal that happens on Wednesday, but the market was treading cautiously. Immediate overhead resistance is now at the 1500 psychological level, and is also where the 30-day moving average (MA) located now. If the key index is able to close above this level, it will bring the bullish sentiments back to the market.
MACD continued to slide lower, but at a reduced rate, as shown by the shorter histogram. Nonetheless, the momentum is still weak. RSI (14) at 49.7 has hooked up, but still below the 50 level or is mildly bearish. Stochastic at 20.4 has gently hooked up from a previous reading of 19.3, indicating a stabilization of the downtrend. Readings from the indicators shows that the correction of the FBM KLCI has stabilized but has not turned bullish yet.
The short term trend of the FBM KLCI remained down, as it still close below the 10 and 20-day MA. However, a first sign of recovery is there, as the key index is currently closing above the 5-day MA. The key index will need to close above 1505 level in order for it to turn bullish again. Nevertheless, the medium to longer term uptrend is still intact.
US market was closed yesterday for the Thanksgiving Day holiday. Today, the FBM KLCI is likely to trade within a range of 1486 to 1505.
This week's expected range: 1470 – 1525
Today’s expected range: 1486 – 1505
Resistance: 1499, 1502, 1505
Support: 1486, 1489, 1492